Use the figure for the question(s)below.
-The graph above shows the break-even analysis for the cost of making a certain good.Based on this chart,which of the following is true?
A)The net present value (NP
V)of the project increases with increased cost of goods sold.
B)The project should not be undertaken if the predicted cost of goods sold is less than $110.
C)The net present value (NP
V)of the project will be positive if the cost of good sold is greater than $110.
D)If the good costs $110 to make,the net present value (NP
V)of the project will be zero.

Question

Use the figure for the question(s)below. 
-The graph above shows the break-even analysis for the cost of making a certain good.Based on this chart,which of the following is true?
A)The net present value (NP
V)of the project increases with increased cost of goods sold. 
B)The project should not be undertaken if the predicted cost of goods sold is less than $110. 
C)The net present value (NP
V)of the project will be positive if the cost of good sold is greater than $110. 
D)If the good costs $110 to make,the net present value (NP
V)of the project will be zero.

Quizplus · Accepted Answer

The break-even point is where the cost of making the good equals the revenue, resulting in an NPV of zero. If the good costs $110 to make, it is likely the break-even point, making the NPV zero.

Use the Figure for the Question(s)below