The Point at Which the Total Cost Line Intersects with the Total

question 33

True/False

The point at which the total cost line intersects with the total revenue line provides information on the number of units that must be sold to break even.

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Definitions:

Stand-Alone Project

In capital budgeting, a project with no competition either for the task it is to accomplish or for resources.

Cost of Capital

The rate of return a company must pay to its investors for the use of their capital, essentially the cost of financing and investing in the company's assets.

NPV

Net present value. A capital budgeting technique that rates projects according to the total present value of all their associated cash flows. The higher the total or net present value, the better.

Capital Budgeting Decision

The process by which a business determines whether projects such as investments in equipment or new products are worth pursuing.