You have a colleague who swears by using breakeven analyses. He or she has not been on the job long enough to be able to understand the reasons why this tool isn't always reliable.

Which of the following reasons should you share with him or her?

a. The company's accounting system does not clearly distinguish between fixed and variable costs.
b. Breakeven analysis is outdated.
c. Not everyone in the company understands or uses breakeven analyses.
d. Breakeven analysis is hard to calculate; and it is difficult to explain how the results are derived.

University hero is considering expanding operations beyond its healthy sandwiches. jim axelrod, vice president of marketing, would like to add a line of smoothies with a similar health emphasis. each smoothie would include two free health supplements such as vitamins, antioxidants, and protein. jim believes smoothie sales should fill the slow mid-afternoon period. adding the line of smoothies would require purchasing additional freezer space, machinery, and equipment. jim provides the following projections of net sales, net income, and average total assets in support of his proposal. sandwichesonly sandwiches and smoothies net sales $ 750,000 $ 1,350,000 net income 120,000 210,000 average total assets 350,000 750,000 return on assetschoose numerator ÷ choose denominator = return on assets÷ = return on assets÷ = profit margin÷ = profit margin÷ = asset turnover÷ = asset turnover÷ = times