Cost-Volume-Profit (CVP)analysis Is a Simple but Powerful Tool to Assist

question 43

Multiple Choice

Cost-volume-profit (CVP) analysis is a simple but powerful tool to assist management make operating decisions.Which of the following does not represent a potential use of CVP analysis?

• A)Ability to compute the break-even point.
• B)Ability to determine optimal sales volumes.
• C)Aids in evaluating tax planning alternatives.
• D)Aids in determining optimal pricing policies.

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Definitions:

Discriminant Validity

The extent to which a measurement does not correlate with measurements from different constructs, ensuring distinctiveness among variables.

Predictive Validity

The extent to which a score on a scale or test predicts scores on some criterion measure.

Convergent Validity

A measure of validity based on the degree to which a test correlates with other tests that it is theoretically supposed to correlate with.

Emotional Quotient

A measure of a person's ability to recognize, understand, and manage their own emotions and the emotions of others.