A Recent Income Statement of Yang Corporation Reported the Following $\begin{array}{lr}\text { Sales revenue } & \$ 2,500,000 \\\text { Variable costs } & 1,500,000 \\\text { Fixed costs } & 800,000\end{array}$

question 33

Multiple Choice

A recent income statement of Yang Corporation reported the following data: $\begin{array}{lr}\text { Sales revenue } & \$ 2,500,000 \\\text { Variable costs } & 1,500,000 \\\text { Fixed costs } & 800,000\end{array}$ If these data are based on the sale of 5,000 units, the break-even sales would be:

• A) $2,000,000.
• B) $2,206,000.
• C) $2,500,000.
• D) $10,000,000.
• E) None of the other answers is correct.

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Definitions:

Unlevered Firm

A company that operates without using borrowed money, relying solely on its own equity for financing.

After-Tax Net

The remaining income of a business or investment after all taxes have been deducted.

Unlevered Cost

Refers to the cost a company would incur without the benefit or cost of debt financing.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity and preferred equity, which is used to finance its overall operations and growth.