As Production Increases, the Fixed Cost Per Unit

question 70

Multiple Choice

As production increases, the fixed cost per unit

• A) increases
• B) decreases
• C) remains the same
• D) either increases or decreases, depending on the variable costs

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Definitions:

Payback Periods

The length of time required to recoup the initial investment in a project or investment, measured in years or months.

Higher Risk

Refers to the increased likelihood of experiencing a loss or encountering a negative outcome in an investment or other business activity.

Hurdle Rate

The minimum acceptable rate of return on an investment that a manager or company would consider in order to pursue the project.

Accounting Rate of Return

A financial ratio that measures the expected profit from an investment compared to its initial cost.