Use the Figure for the Question(s) Below

question 61

Multiple Choice

Use the figure for the question(s) below.
-A company planning to market a new model of motor scooter analyzes the effect of changes in the selling price of the motor scooter, the number of units that will be sold, the cost of making the motor scooter, the effect on Net Working Capital, and the cost of capital for the project. They predict that the break-even point for sales price for the motor scooter is $2,480. What does this mean?

• A) If the motor scooter is sold for $2,480, then the project will make a profit.
• B) If the motor scooter is sold for $2,480, then the net present value (NP
• V) for the product will be zero.
• C) The predicted selling price of the motor scooter is $2,480.
• D) The maximum that the motor scooter can sell for and still make the project have a positive net present value (NP
• V) is $2,480.

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Definitions:

Management

The process of dealing with or controlling things or people, including planning, organizing, leading, and controlling resources to achieve organizational goals.

Buyer

An individual or entity that acquires goods or services in exchange for payment.

Public

Relating to or involving people in general, rather than being limited to a private group or individuals.

Successful Deals

Agreements or transactions that meet or exceed the objectives and expectations of all parties involved.