Table 305 Assume That in Table 30

question 115

Multiple Choice

Table 30.5 $$\begin{array} { | r | c | c | c | } \hline \text { Output (urits) } & \text { Labor (urits) } & \text { Output (urits) } & \text { Capital (urits) } \\\hline 10 & 1 & 20 & 1 \\\hline 26 & 2 & 56 & 2 \\\hline 38 & 3 & 86 & 3 \\\hline\end{array}$$ Assume that in Table 30.5 the cost of labor is $4 per unit and the cost of capital is $6 per unit.In Table 30.5,what is the cost efficiency of the second unit of capital?

• A)6 units per $1 of cost.
• B)36 units per $1 of cost.
• C)56 units per $1 of cost.
• D)9.33 units per $1 of cost.

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Definitions:

Required Rate

The minimum expected rate of return on an investment, determined by assessing risk levels and market conditions.

Credit Policy

A set of guidelines that a company follows to determine credit terms for customers, which influences decisions such as payment periods and credit limits.

Net Present Value

A method used in capital budgeting to evaluate the profitability of an investment or project, calculated as the difference between the present value of cash inflows and outflows over a period.

Monthly Interest Rate

The fraction of the annual interest rate divided by twelve, representing the interest for a single month.