Which of the Following Will Cause the EBIT Break-Even for Sales

question 101

Multiple Choice

Which of the following will cause the EBIT Break-Even for sales to increase?

• A) a decrease in the sales price
• B) a decrease in depreciation expense
• C) a decrease in selling, general, and administrative expenses
• D) a decrease in the number of units sold

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Definitions:

Working Capital Financing

Short-term financing used to finance the day-to-day operations of a business, specifically its current assets and liabilities.

Summary Balance Sheet

A concise report detailing a company's financial position at a specific time, including assets, liabilities, and equity.

Net Operating Working Capital

The difference between operating current assets and operating current liabilities, indicating the liquidity available for a company's day-to-day operations.

Short-Term Debt

Short-term debt comprises borrowings that are due to be repaid within one year, commonly used to fund daily operations or immediate financial needs.