The Following Data Pertains to the Retail Division of Motor

question 121

Multiple Choice

The following data pertains to the Retail Division of Motor Express: $\begin{array}{lr}\text { Sales } & \$ 700,000 \\\text { Invested capital } & 200,000 \\\text { Net operating profit after taxes } & 49,000 \\\text { Noninterest-bearing current liabilities } 20,000\end{array}$ The minimum rate of return specified by Motor Express is 12 percent and the cost of capital is 8 percent.How much is residual income?

• A)$33,000
• B)$25,000
• C)$27,400
• D)$34,600

Distinguish between economic profit, normal profit, and loss scenarios for competitive firms.

Understand the concept of optimal allocation of scarce resources in a purely competitive industry.

Describe conditions for long-run equilibrium in a purely competitive firm.

Identify the features indicating productive efficiency and allocative efficiency in pure competition.

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Definitions:

Helping

Helping involves providing support or assistance to others, often to improve a situation or solve a problem, fostering a collaborative and supportive environment.

Supporting

The act of providing assistance or backing to individuals or groups, contributing to their success or wellbeing.

Staff Managers

Managers who use special technical expertise to advise and support line workers.

Human Behaviour

The range of actions and mannerisms exhibited by humans, which are influenced by culture, attitudes, emotions, values, ethics, and authority.