7. By definition, a firm\'s operating breakeven point represents the level of pr

Question

7. By definition, a firm's operating breakeven point represents the level of production and sales at which a. additional funds needed equal zero b. variable costs equal operating revenue c. fixed variable costs equal operating revenue d. net operating income equals zero e. the cost of equity equals the cost of debt. 8. A firm offers credit terms of 3/15, net 20 to its customers, which means the firm allows its customers to: a. take a 15 percent discount on the invoice price if payment is made on or before Day b. take a 20 percent discount on the invoice price if payment is made on or before Day c. take a 3 percent discount on the invoice price if payment is made on or before Day 15 d. take a 15 percent discount on the invoice price if payment is made on or before Day 3 e. take a 20 percent discount on the invoice price if payment is made on or before Day3 20 of the billing cycle; after that, only a 3 percent discount will be available 15 of the billing cycle; after that, only a 3 percent discount will be available of the billing cycle; otherwise, the entire bill is due by Day 20 of the billing cycle; otherwise, the entire bill is due by Day 20 of the billing cycle; otherwise, the entire bill is due by Day 15

Explanation / Answer

7)

Operating break even point determines the level o fproduction and sales at which the fixed and variable costs equal the operating revenue

Answer : C)

8)

Answer : C)

It means 3 % discount on invoice payment if payment is made on or before Day 15 of billing cycle otherwise entire bill is due by Day 20.

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