Reference no: EM132894048

Problem 1: Given the following information, what is the PV ratio?

Contribution margin $ 250
Fixed costs $200
Operating profit $ 50
Revenue $ 1,000
Variable cost $ 750

a) 0.75
b) 0.05
c) 0.25
d) 25

Problem 2:  A performance ________________ is a benchmark against which results are measured.

Problem 3: Which of the following is an example of fixed costs?

a) Freight in
b) Salaries (selling)
c) Sales commission
d) Purchases

Problem 4: By offering 2/ 10, N/ 30 credit terms it means that the price of an invoice is increased.

a) True
b) False

Problem 5: Accelerating the payment of bills to suppliers can improve the cash cycle.

a) False
b) True

Problem 6: To calculate the cash break- even point, one should divide all fixed costs less depreciation by the PV ratio.

a) True
b) False