You would like to know the minimum level of sales that is needed for a project to be accepted based on its net present value

When the operating cash flow of a project is equal to zero, the project is operating at the:    A.  maximum possible level of production. B.  minimum possible level of production. C.  financial break-even point. D.  accounting break-even point. E.  cash break-even point. Refer to section 11.4

48.	Which one of the following represents the level of output where a project produces a rate of return just equal to its requirement?    A.  capital break-even B.  cash break-even C.  accounting break-even D.  financial break-even E.  internal break-even Refer to section 11.4

49.

Which of the following statements are identified with financial break-even point? I. The present value of the cash inflows exactly offsets the initial cash outflow. II. The payback period is equal to the life of the project. III. The NPV is zero. IV. The discounted payback period equals the life of the project.    A.  I and II only B.  I and III only C.  II and IV only D.  I, II, and III only E.  I, III, and IV only Refer to section 11.4

50.

You would like to know the minimum level of sales that is needed for a project to be accepted based on its net present value. To determine that sales level you should compute the:    A.  contribution margin per unit and set that margin equal to the fixed costs per unit. B.  contribution margin per unit. C.  accounting break-even point. D.  cash break-even point. E.  financial break-even point. Refer to section 11.4

51.

Theresa is analyzing a project that currently has a projected NPV of zero. Which of the following changes that she is considering will help that project produce a positive NPV instead? Consider each change independently. I. increase the quantity sold II. decrease the fixed leasing cost for equipment III. decrease the labor hours needed to produce one unit IV. increase the sales price    A.  I and II only B.  I and IV only C.  II, III, and IV only D.  I, II, and IV only E.  I, II, III, and IV Refer to section 11.4

The change in variable costs that occurs when production is increased by one unit is referred to as the:

Fixed costs:    A.  change as a small quantity of output produced changes. B.  are constant over the short-run regardless of the quantity of output produced. C.  are defined as the change in total costs when one more unit of output is produced. D.  are subtracted from sales to compute the contribution margin. E.  can be ignored in scenario analysis since they are constant over the life of a project. Refer to section 11.3

7.	The change in revenue that occurs when one more unit of output is sold is referred to as:    A.  marginal revenue. B.  average revenue. C.  total revenue. D.  erosion. E.  scenario revenue. Refer to section 11.3

8.	The change in variable costs that occurs when production is increased by one unit is referred to as the:    A.  marginal cost. B.  average cost. C.  total cost. D.  scenario cost. E.  net cost. Refer to section 11.3

9.	By definition, which one of the following must equal zero at the accounting break-even point?    A.  net present value B.  internal rate of return C.  contribution margin D.  net income E.  operating cash flow Refer to section 11.3

10.	By definition, which one of the following must equal zero at the cash break-even point?    A.  net present value B.  internal rate of return C.  contribution margin D.  net income E.  operating cash flow Refer to section 11.4