To be profitable, a firm has to recover its costs. These costs include both its xed and its variable costs. One way that a firm evaluates at what stage It would recover the invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to cam a profit. Petrox Oil Company is considering a project that will have fixed costs of $15,000,000. The product will be sold for $37.50 per unit, and will incur a variable cost of $10.75 per unit. Given the cost structure of Petrox, it will have to sell units to break even on this project (Qan) Marketing and sales director of Petrox Oil Company doesn't think that the firm's market is big enough for the firm to break even. In fact, she believes that the firm will be able to sell only about 175,000 units. However, she also thinks that the demand for Petrox's product is relatively inelastic (so the firm can increase the sales price without significantly decreasing the volume of product sold). Assuming that Petrox can sell 175,000 units, what price must it set to break even? O $115.75 per unit O $91.64 per unit $106.11 per unit $96.46 per unit Several factors affect a firm's operating break-even point. Based on the scenarios described in the following table, indicate whether these factors would increase, decrease, or leave unchanged a firm's break-even quantity--assuming that only the listed factor changes and all other relevant factors remain constant. Increase Decrease No Change The firm's fixed costs increase. O The product's sales price increases. The firm's tax rate increases OOO O O When other things are held constant, the higher a firm's operating leverage, the will be its business risk