XYZ Corp Expects to Have $350,000 in Sales in a Poor

question 28

Multiple Choice

XYZ Corp expects to have $350,000 in sales in a poor economy,$500,000 in a moderate economy,and $900,000 in a booming economy.If the chances of a booming economy and poor economy are 10% each,what is the expected return?

• A) 525,000
• B) 512,500
• C) 500,000
• D) 805,000
• E) 621,000

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Definitions:

Wage Rate

The amount of compensation workers receive in exchange for their labor, typically expressed per hour or per unit of work.

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts as well as the physical factors of production.

Expansion Path

A curve that shows how the input combinations of a firm change as it increases output, keeping the input ratios constant.

Least-Cost Combination

A production point where the mix of inputs results in the lowest possible cost for a given output level.