Computing the future value of some amount of money invested today is called compounding, while computing the present value of some amount of money that will be received in the future is called discounting. 

Costs and revenues remain constant within a specified production level, which is usually called as the relevant range.Therefore, the statement in option E is not one of the assumptions that CVP analysis is based upon. The corrext answer is E. 

Hakan DOL = 20% 10% = 2

Hasan DOL = ($2,500,000 -$1,250,000)/($2,500,000 -$1,250,000 -$500,000) = 1.67

An annuity is a series of equal cash flows that occur for a given period at regular intervals. Examples of annuities include loan repayments in installments of equal amounts, interest payments on bonds, mortgage payments, insurance payments, rent payments, etc. 

FV= 4000*(1+0.08)=4320

Price per unit = $400,000 / 20,000 = $20

Contribution margin per unit=Price - VC /Price

= $20 - $10 / $20 = 0.5

CVP is Cost-Volume-Profit Analysis. In the business world, managers evaluate firm performance by conducting detailed financial analyses and cost-volume-profit analysis is one of the major tools of financial performance measurement. The correct answer is E.

The CVP analysis is based upon the following assumptions:
1. The sales price per unit is constant,
2. Variable costs per unit and fixed costs are constant,
3. The firm sells all units produced,
4. The cost structure is constant meaning that costs change only by the level of activity,
5. If there is more than one product produced and sold, the sales mix of these products is constant.
6. Costs and revenues remain constant within a specified production level, which is usually called as the relevant range.

We can find profit information at the bottom line of income statement of a company, as “net income”. In accounting terms, net income is the net increase in the owners’ equity that results from a company’s operations.

First we need to calculate margin of safety in dollars as:

Net income can be found at the bottome of an income statement. That tells how much is period’s earnings after tax and interest expenses. That cannot be observed in a balance sheet.

$10,000= P*(1,12^10) = $3,220

Here FV is the cash flow at the end of the first period and r is the interest rate. Correct formula: PV = FV / (1 + r)

Production value tells how much effort is required in order to produce goods and services. For example, if a company spends 100TL for raw materials and spends extra 80TL for labor in order to produce a product, then the production value is 180TL.

DFL= 6.000.000/(6.000.000-300.000)=1.052

2000 = C * {1 - [1 / (1.01)10]} / 0.01

2000 = C * [(1 - 0,90529) / 0,01]

2000 = C * 9,471 › C = 2000 / 9.471 = 211,17

Unit contribution margin = Price -Variable cost per unit ; UCM = 50-20 = 30

Contibution Margin Ratio = Unit contribution margin / Price = 30 / 50 = 0.6

Companies are not isolated entities.

Income statement is a performance statement for a given period with a bottom line figure of profit or loss. Hence, Income Statement provides profitability of the firm over a period of time such as a year.