Q1- When the revenue per unit increases but the variable cost per unit stills th

Question

Q1- When the revenue per unit increases but the variable cost per unit stills the same, then:

a. The breakeven point moves to the left.
b. The number of units to break even units increases.
c. The breakeven point moves to the right.
d. The breakeven point stays in the same place.

Q2- To convert inflated dollars into constant-value dollars, it is necessary to take inflated dollars and:

a.Divide by (1 + if)n
b.Divide by (1 + f )n
c.Divide by (1 + i)n
d.Multiply by (1 + f)n

PLEASE EXPLAIN WHY YOU PICKED YOUR ANSWER.

Explanation / Answer

1.The breakeven point moves to right as there is incrrase in revenue per unit and revenue curve shift to right. Point of interestion of total cost curve and revenue curve gives the break even point. So, when revenue curve shifts to right breakeven point also shift to right.

2.B option is correct because there is a formula for calculating this which is as follows:-

Today's dollar = future dollar/ (1+f)^n

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