Cindy's Computer Corp

question 92

Multiple Choice

Cindy's Computer Corp. is considering a merger with Bobby's Computer, Inc. Cindy's total operating costs of producing services are $2.1 million for a sales volume (SC) of $13 million. Bobby's total operating costs of producing services are $2.5 million for a sales volume (SB) of $7 million. If the two firms merge, calculate the total average cost (TAC) for the merged firm assuming no synergies.

• A) 23 percent
• B) 17 percent
• C) 19 percent
• D) 21 percent

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Definitions:

Equality Of Opportunity

The principle that all individuals should have the same chances to pursue their goals without unfair barriers.

Intuitionism

A philosophical doctrine positing that basic moral truths are known instinctively or intuitively, beyond empirical observation or logical deduction.

Corporate Governance

The framework of rules, practices, and processes by which a corporation is directed and controlled.

Ethical Relativism

The theory that suggests morality is relative to the norms of one's culture, meaning that what is morally right for one society may be wrong for another.