Sharp Has Current Assets of $15,000 and Current Liabilities of $9,500

question 103

True/False

Sharp has current assets of $15,000 and current liabilities of $9,500. Its current ratio is 1.6 to 1.

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Definitions:

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in average costs with increased output.

Total Fixed Cost

Total Fixed Cost is the sum of all costs that remain constant regardless of the level of production or business activity.

Economies of Scale

Businesses gain cost benefits from increasing their scale of operations, leading to a decline in the cost per unit of output as the production size enlarges.