1. If a firm's sale price per unit decreases, the firm's ________.

variable costs per unit will decrease

operating breakeven point will increase

variable costs per unit will increase

operating breakeven point will decrease

2. Given the following information and ignoring taxes, what is the annual cash revenue that will make the net present value equal to zero (i.e., the annual cash revenue that will cause us to break-even in the financial sense)?

Annual cash costs = $14,000

Life of project = 8 years

Initial cost of project = $30,000

Salvage value at end of project = $2,000

Required rate of return = 15%