A Manager Has Determined That a Potential New Product Can

question 42

Multiple Choice

A manager has determined that a potential new product can be sold at a price of $10.00 each. The cost to produce the product is $5.00, but the equipment necessary for production must be leased for $25,000 per year. What is the break-even point?

• A) 2,500 units.
• B) 5,000 units.
• C) 7,500 units.
• D) 10,000 units.
• E) 25,000 units.

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Definitions:

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the shares remains the same.

Stockholders' Equity

The residual interest in the assets of the entity after deducting liabilities, representing ownership equity spread among shareholders.

Donated Land

Land that has been given to an organization as a gift, usually recognized at its fair market value on the date of donation.