Refer to the Graph Shown

question 80

Multiple Choice

Refer to the graph shown. The most economically efficient way to produce 1,000 units of output is to use:

• A) 5 units of machines and 7.5 units of labor.
• B) 6 and 2/3 units of machines and 5 units of labor.
• C) 10 units of machines and 15 units of labor.
• D) 5 units of machines and 25 units of labor.

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Definitions:

Initial Investment

Refers to the initial capital outlay or amount of money invested to start a project or investment.

IRR

Internal Rate of Return; a financial metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Financial Break-Even

The point at which revenues equal expenses and neither profit nor loss is realized.

Required Rate

Also known as the Required Rate of Return, it is the minimum annual percentage return an investor expects to achieve from an investment.