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Excel Products Is Planning a New Warehouse to Serve the Southeast

question 74

Multiple Choice

Excel Products is planning a new warehouse to serve the Southeast. Locations A, B, and C are under consideration. Fixed and variable costs follow:
$\begin{array} { | l | l | l | } \hline \text { Location } & \begin{array} { l } \text { Fixed Cost } \\\text { per Year }\end{array} & \begin{array} { l } \text { Variable Cost } \\\text { per Unit }\end{array} \\\hline \mathrm { A } & \$ 2,500,000 & \$ 19 \\\mathrm {~B} & 1,500,000 & 7 \\\mathrm { C } & 2,000,000 & 9 \\\hline\end{array}$
Plot the total cost curves in the chart provided below, and identify the range over which each location would be best. Then use break- even analysis as necessary to calculate exactly the break- even quantity that defines each range. $Excel Products is planning a new warehouse to serve the Southeast. Locations A, B, and C are under consideration. Fixed and variable costs follow: \begin{array} { | l | l | l | } \hline \text { Location } & \begin{array} { l } \text { Fixed Cost } \\ \text { per Year } \end{array} & \begin{array} { l } \text { Variable Cost } \\ \text { per Unit } \end{array} \\ \hline \mathrm { A } & \$ 2,500,000 & \$ 19 \\ \mathrm {~B} & 1,500,000 & 7 \\ \mathrm { C } & 2,000,000 & 9 \\ \hline \end{array} Plot the total cost curves in the chart provided below, and identify the range over which each location would be best. Then use break- even analysis as necessary to calculate exactly the break- even quantity that defines each range. Which of the following statements is correct? A) Location B is best over all volume levels. B) The total cost of location A, if the volume is 250,000 units, is over $7,000,000. C) Location A is the best one if volumes are quite high. D) The break- even quantity between A and B is more than 75,000 units but less than 200,000 units.$
Which of the following statements is correct?

Definitions:

Liquidity

The ease with which an asset or security can be converted into cash without significantly affecting its market price.

Limited Liability Partnerships

A business structure that allows partners to have limited liabilities, which means they are not personally liable for the debts of the business.

Portfolio Composition

The breakdown of assets within an investment portfolio, classified by type, sector, risk, or other criteria.

Temporary Misalignments

Short-term discrepancies between the prices or values of related financial instruments or market sectors that are expected to correct over time.