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Question -
a) "The Break-Even Point"
Q1. Describe how to calculate contribution margin and explain the term "contribution margin".
Q2. Discuss the main point of Contribution margin
b) "Break-Even Pros & Cons"
Q1. Discuss the benefits and limitations of break-even analysis.
Q2. Describe how margin of safety is determined and what does margin of safety means?
c) Break Even Analysis Explained
Q1. Explain why BE analysis is used solely for short-term analysis?
d) CVP Analysis Assumptions
Q1. Discuss the reason for supporting the assumptions when using CVP analysis.
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The tax rate is 22 percent and the discount rate is 11 percent. At what sales quantity per year will the investment break even on a financial basis?
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