Indeterminant effect on a firms breakeven point


Question 1) Would each of the following increase, decrease, or have an indeterminant effect on a firm's breakeven point (unit sales)?

a. An increase in the sales price with no changes in unit cost?
b. An increase in fixed costs accompanied by a decrease in variable cost?
c. A new firm deices to use MACRS depreciation for both book and tax purposes rather than the straight-line depreciation method.

Question 2) Why do public utilities generally use different capital structures than drug companies?

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Finance Basics: Indeterminant effect on a firms breakeven point
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