Bruce Company Recently Reduced Its Advertising Budget $\begin{array}{llcc}&\text {Break-even Point}&\text {Margin of Safety}\\\end{array}$

question 112

Multiple Choice

Bruce Company recently reduced its advertising budget.All other costs and revenues were unchanged.Select the response that indicates the impact of the advertising cuts on the company's break-even point and margin of safety. $\begin{array}{llcc}&\text {Break-even Point}&\text {Margin of Safety}\\\end{array}$
A. $\begin{array}{lrr}& \text { Increase } &&&& \text { Increase} \\\end{array}$
B. $\begin{array}{lrr}& \text { Decrease } &&&& \text { Decrease} \\\end{array}$
C. $\begin{array}{lrr}& \text { Increase } & &&&\text { Decrease} \\\end{array}$
D. $\begin{array}{lrr}& \text { Decrease } &&&& \text {Increase} \\\end{array}$

• A) A
• B) B
• C) C
• D) D

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Definitions:

Natural Logarithm

The logarithm to the base e (where e is approximately equal to 2.718281828), often used in mathematics and engineering.

Logistic Regression

A statistical method used for predicting a binary outcome from one or more predictor variables, modeling the probability of occurrence of an event by fitting data to a logistic curve.

Indicator Variable

An indicator variable is a numerical variable used in statistics that adopts a value of 1 if a certain condition is met and 0 if it is not.

Binomial Probability

The probability of obtaining a fixed number of successful outcomes in a fixed number of trials in a binomial experiment.