Which of the Following Would Not Cause the Break-Even Point

question 29

Multiple Choice

Which of the following would not cause the break-even point to change?

• A) Sales price increases.
• B) Fixed cost decreases.
• C) Sales volume decreases.
• D) Variable costs per unit increases.

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Definitions:

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the valuation of investments or projects.

NPV

Net Present Value, a calculation used to assess the profitability of an investment or project, considering the time value of money.

Target Company

A firm that another company seeks to acquire.

Cost of Equity

The return that shareholders require for investing in a company's equity, representing the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.