All else equal, an increase in fixed costs
I.increases the break-even point based on NPV;
II.increases the accounting break-even point;
III.decreases the break-even point based on NPV;
IV.decreases the accounting break-even point
A)I and IV only
B)III and IV only
C)II and III only
D)I and II only

Question

Quizplus · Accepted Answer

An increase in fixed costs increases both the break-even point based on NPV and the accounting break-even point because it raises the total amount of revenue needed to cover all costs.

All Else Equal, an Increase in Fixed Costs