2

Total fixed costs in year 1 would be $_____.

1. $250
2. $1,025
3. $500
4. None of the above

Answer:

3

Assuming a variable cost per unit of $6.99, your lemonade stands break-even demand in year 1 would be _____ cups and your year 1 break-even sales would be $_____.

1. 100 cups, approximately $699 in sales
2. 83 cups, approximately $830 in sales
3. 1,000 cups, approximately $9,999 in sales
4. None of the above

Answer:

4

Assuming an internal rate of return of 10%, and a WACC of 7%, by how much would interest rates have to rise for your lemonade stand to be unprofitable?

1. 17.00%
2. 3.00%
3. 7.00%
4. 15.00%