Given the Following Information, the Break-Even Point in Sales Dollars

question 50

Multiple Choice

Given the following information, the break-even point in sales dollars is:
Unit sales price $100
Variable production costs per unit $65
Fixed production costs $18 000
Selling and Administrative costs $3 000 + 5% of sales

• A) $25 714
• B) $21 000
• C) $51 429
• D) $60 000

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Definitions:

Required Rate

Often used in reference to the minimum acceptable return on investment or the minimum discount rate used in net present value calculations.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Initial Investment

The amount of money used to start a project, purchase an asset, or initiate operations.

Cash Inflows

Money or funds entering a business from various sources like sales, investments, or financing.