6) If the volume of activity of a company is higher than the break-even point, then the company: a) Makes a profit b) Makes a loss c) Makes neither a loss nor a profit d) Must reduce the number of products 7) Historic cost is: a) The cost in the last financial year b) The best estimated cost in the market c) A cost already incurred d) The lowest cost in the last years 8) Use the following information to calculate the break- even point: Total fixed costs Selling price Variable cost 9,000 5 per unit 2 per unit b) 2,000 units 3,353 units 200 units 3,000 units d) 9) Actual profit is equal to: a) Budgeted profit + all favourable variances b) Budgeted profit + all favourable variances - all adverse variances c) Budgeted profit + all adverse variances + all favourable variances a) Budgeted profit - profit in the last year 10) Which investment appraisal technique might ignore some parts of cash flows? a) Payback period b) Net present value c) Accounting rate of return d) Break-even point analysis 11) In the net present value technique, If the cost of capital increases from 8% to 9% then the: a) Net present value will decrease b) Present value will increase c) Present value will not change d) Net present value will not change 12) When a company make neither a profit nor a loss: a) The volume of activity is low b) The volume of the activity is equal to the break- even point c) The size of the company is small d) The volume of activity is too high 13) Which one of the following is a problem with Internal Rate of Return (IRR)? a) It does not consider the time value of money b) It ignores the total value of the project c) It is not related to the wealth maximisation objective d) It ignores cash flows after a specific date