Which of the following may be responsible for a fair share of the perennial \"pr
ID: 2653873 • Letter: W
Question
Which of the following may be responsible for a fair share of the perennial "project cost overruns"?
Rapidly rising inflation
Delays in obtaining contracts and permits
Lack of raw materials
Forecasting bias by the sponsoring manager
A firm with 50% of sales going to variable costs, $1.6 million fixed costs, and $510,000 depreciation would show what accounting profit with sales of $4 million? Ignore taxes.
rev: 07_27_2012
$800,000 loss
Zero loss
$110,000 loss
$400,000 loss
3.86
2.93
3.93
2.86
When the level of fixed costs is decreased, the break-even level of revenues:
will automatically decrease.
will automatically increase.
may or may not be changed, depending on variable costs.
will remain unchanged, because fixed costs cannot be altered.
If a decision tree indicates an expected NPV of $1 million, then:
at least one of the outcomes had a negative NPV.
all of the outcomes had a positive NPV.
$1 million is the firm's minimum guaranteed profit.
the project still contains uncertainty.
If forecasted sales exceed the break-even level but are less than the economic break-even level, the project has a:
positive NPV but earns less than the discount rate.
negative NPV but earns more than the discount rate.
net loss on the income statement.
net profit on the income statement.
What is the accounting break-even level of revenues for a firm with $9 million in sales, variable costs of $5.4 million, fixed costs of $1.4 million, and depreciation of $1 million? (Do not round intermediate calculations.)
$7,500,000
$6,000,000
$7,800,000
$3,500,000
NPV decreases by $210.00.
NPV decreases by $189.19.
NPV decreases by $350.00.
NPV decreases by $315.32.
60%
41%
40%
59%
A firm with 50% of sales going to variable costs, $1.6 million fixed costs, and $510,000 depreciation would show what accounting profit with sales of $4 million? Ignore taxes.
Explanation / Answer
Solution:
What is the accounting break-even level of revenues for a firm with $9 million in sales, variable costs of $5.4 million, fixed costs of $1.4 million, and depreciation of $1 million?
$7,500,000
$6,000,000
$7,800,000
$3,500,000
Answer to the above question is -
Accounting break-even level of revenues -
Note: If depreciation is assumed to be on equipment, the Break-even Level would be $ 3,500,000
Accounting break-even level of revenues Sales 9,00,000 Variable cost 5,400,000 Contribution 3,600,000 Contribution Ratio 0.4 Fixed Cost 1,400,000 Depreciation 1,000,000 Break-even = (Fixed cost + Depreciation)/ Contribution Ratio (1,400,000+1,000,000)/0.4 6,000,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.