Basic Break-Even Analysis Typically Assumes That

question 17

Multiple Choice

Basic break-even analysis typically assumes that:

• A)revenues increase in direct proportion to the volume of production,while costs increase at a decreasing rate as production volume increases.
• B)variable costs and revenues increase in direct proportion to the volume of production.
• C)both costs and revenues are made up of fixed and variable portions.
• D)costs increase in direct proportion to the volume of production,while revenues increase at a decreasing rate as production volume increases because of the need to give quantity discounts.
• E)All of the above are assumptions in the basic break-even model.

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Definitions:

Unconscionably High Rates

Charges or fees that are excessively high and considered unreasonable or unethical, often in the context of lending or service provision.

Usury

The practice of charging exorbitantly high or illegal interest rates on loans.

Usury Law

Legislation that sets maximum interest rates that can be charged on loans, designed to protect consumers from excessively high rates.

Interest Rate

The Interest Rate is the percentage at which interest is paid by borrowers for the use of money they borrow from a lender, commonly expressed as an annual percentage.