1) BVM sold 25,000 units and was able to breakeven last year. Variable costs will increase
30% next year. What information is needed to calculate their new breakeven point?
a) Costs per unit
b) Sales price per unit and costs per unit
c) Total fixed costs, sales price per unit, and costs per unit
d) No additional data is needed.
2) The probability distributions for NPW for two mutually exclusive alternatives are shown in the table. Assume the NPW random variables are independent.
X P(NPW1 = x)
Y P(NPW2 = y)
a) Project 2 is preferred because E[NPW2] < E[NPW1] and Var[NPW2] > Var[NPW1]. b) Project 2 is preferred because P(NPW2 > NPW1) > 0.5.
c) Both A and B are true.
d) Neither A nor B is true.
3) Process A has fixed costs of $10,000 and unit costs of $4.50 each, process B has fixed costs of $25,000 and unit costs of $1.50 each. At what production would the two processes have the same total costs?
a) 50 units
b) 500 units
c) 5,000 units
d) 50,000 units
4) Which of the following statements about scenario analysis is true?
a) Only two cases, the best and the worst, are analyzed
b) Only one variable is adjusted at a time
c) Usually at least three cases are analyzed, worst, most likely, and best
d) Selling price is not adjusted in any scenario because it is market driven