If the Unit Sales Price Is $7 and Variable Costs

question 135

Multiple Choice

If the unit sales price is $7 and variable costs are $3, how many units have to be sold to earn a profit of $3,600 if fixed costs equal $5,000?

• A) 900.
• B) 1,250.
• C) 1,500.
• D) 2,150.

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Definitions:

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the corporation's assets and earnings.

CAPM

The Capital Asset Pricing Model is a framework that explains the connection between the expected return on assets, especially stocks, and their systematic risk.

Characteristic Line

A line in finance that shows a security's expected returns as a function of the overall market's returns.

Market Return

The total return on investment, including capital gains and dividends, from investing in the stock market over a specific period.