Refer to the Following:
Amount of Total Output Produced from Various

question 53

Multiple Choice

Refer to the following:
Amount of total output produced from various combinations of labor and capital.

$\begin{array}{cccc} &\text { Units of Capital }\\&& 1 & 2 & 3 \\\hline &1 & 80 & 100 & 120 \\\text {Units }&2 & 180 & 220 & 260 \\\text {of }&3 & 270 & 330 & 390 \\\text {Labor }&4 & 340 & 420 & 500 \\&5 & 390 & 490 & 590 \\&6 & 410 & 530 & 650\end{array}$
-If capital is fixed at two units, what is the marginal product of the fourth unit of labor?

• A) 60
• B) 80
• C) 100
• D) 420
• E) none of the above

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Definitions:

Common-Size Statement

A standardized financial statement presenting all items in percentage terms. Statement of financial position is shown as a percentage of assets and income statement as a percentage of sales.

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings, dividends, and sales without having to increase its equity or take on new debt.

External Financing

Funds raised from sources outside of the company, such as loans, investors, or grants, to support business activities.

Debt-Equity Ratio

The Debt-Equity Ratio is a measure of a company's financial leverage, indicating the proportion of equity and debt used to finance a company's assets.