It Is Important to Be Able to Assess the Return

question 30

Multiple Choice

It is important to be able to assess the return on a company's investment in products or services:

• A)so that salespeople can push the products that are not selling well
• B)so the company does not end up being audited
• C)so management's pet projects do not cost the company money
• D)so the company can direct salespeople to sell more of the products or services that have the highest return
• E)so the salespeople do not focus exclusively on products that have a high return on investment

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Definitions:

Average Costs

The total cost of production divided by the number of goods produced, a measure of cost efficiency.

Shutting-Down

A short-term decision by a firm to cease operations while it still has the option to resume in the future, often due to unfavorable market conditions.

Average Costs

The cost per unit is determined by dividing the total production cost by the number of units manufactured.

Long Run

A period sufficient for all inputs to production, including physical capital, to be adjusted.