Once a Business Is Operating Beyond the Break-Even Point, Why

question 70

Essay

Once a business is operating beyond the break-even point, why doesn't each additional dollar of revenue add a dollar to net income?

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Definitions:

Interest Payments

Payments made periodically, often annually or semi-annually, as compensation for borrowing money, calculated as a percentage of the total amount borrowed.

Bond Price

The market price for which a bond is bought or sold, influenced by interest rates, credit quality, and maturity.

Interest-Bearing Note

A debt instrument that pays interest to the holder at a fixed or variable rate until its maturity.

Bond

A fixed-income investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period at a variable or fixed interest rate.