Final answer:
The statement is false. As the contribution margin rises, the break-even point actually goes up rather than down.
Step-by-step explanation:
The statement that as the contribution margin rises, the break-even point goes down is False.
In business, the break-even point refers to the point at which a company's total revenue equals its total costs, resulting in neither profit nor loss. The contribution margin, on the other hand, is the difference between a company's total sales revenue and its total variable costs.
When the contribution margin increases, it indicates that the company's sales revenue is increasing while the variable costs associated with those sales remain constant. This means that the company is generating more revenue to cover its fixed costs and make a profit.
Therefore, as the contribution margin rises, the break-even point actually goes up rather than down, as the company needs to generate higher sales revenue to cover its fixed costs and reach the break-even point.