Narchie Sells a Single Product for $50

question 10

Multiple Choice

Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.
Narchie:

• A) will break-even by selling 8,000 units.
• B) will break-even by selling 13,333 units.
• C) will break-even by selling 20,000 units.
• D) will break-even by selling 1,000,000 units.
• E) cannot break-even because it loses money on every unit sold.

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Definitions:

Merger Activity

Refers to the process of combining two or more companies into a single entity, typically to achieve synergies, increase market share, or improve efficiency.

Interest Rates

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid over a specific period of time.

Interest Expense

The cost incurred by an entity for borrowed funds, including the cost of servicing debt.

Merger Incremental Cash Flow Analysis

The process of evaluating the additional cash flows a company expects to receive from a merger or acquisition.