1. If a firm has a price of $4.00, variable cost per unit of $2.50 and a breakeven point of 20,000 units, fixed cost are equal to:

a. $13,333

b. $10,000

c. $30,000

d. $50,000


2. A firm has profit of $10,000on units sales of 5,000 units. Fixed cost are $30,000. what is the firm’s break-even sales level?

a. less than 4000 units.

b. 4000 units. 

c. more than 4000 units. 

d. there is not enough information to determine the unit the break-even point.


3. Tinbergen cans expect sales next year to be $30,000,000, inventory and accounts receivable (Combined) will increase $4,000,0000 to accommodate this sales level. The company has a profit  margin of 10percent and a 30 percent dividend payout. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing.

a. No external financing will be needed.

b. less than $1,000,00 of external financing is needed.

c. between $1,000,000 and $2,000,000 of external financing is needed.

d.  more than $2,000,000 of external financing is needed.


4. Under normal condition (70% probability) financing plan A will product $24,000 higher return than plan B. under tight money condition (30% probability) Plan A will produce $40,000 less than Plan B. what is the expected value of return plan A over Plan B?

a. $28,800

b. $4,000

c. $48,00

d. $35,200

    • 8 years ago
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