If Fixed Costs Are $850,000 and Variable Costs Are 70

question 75

Multiple Choice

If fixed costs are $850,000 and variable costs are 70% of sales,what is the break-even point (in dollars) ?

• A)$1,214,286
• B)$1,983,333
• C)$2,833,333
• D)$2,550,000

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Definitions:

Characteristic Line

A line used in finance to illustrate the rate of return of an asset as a function of the return of the market as a whole.

Systematic Risk

The risk inherent to the entire market or market segment, not diversifiable through portfolio diversification.

Total Risk

The overall risk associated with an investment, encompassing both systematic and unsystematic risks.

Beta

A gauge for assessing the volatility or inherent risk in a security or portfolio against the broader market index.