Exhibit 21-2 ​

question 195

Multiple Choice

Exhibit 21-2
​

-Refer to Exhibit 21-2. What is the average variable cost of producing 90 units of output?

• A)$1.00
• B)$1.17
• C)$1.59
• D)$1.44
• E)There is not enough information provided to answer the question.

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Definitions:

Simple Rate Of Return

The rate of return computed by dividing a project’s annual incremental net operating income by the initial investment required.

Salvage Value

The estimated residual value of an asset at the end of its useful life, representing what it could be sold for or scrapped.

Technologically Obsolete

Refers to products, services, or technology that have become outdated or no longer maintain a competitive advantage due to advancements in technology.

Simple Rate Of Return

A method to evaluate an investment's efficiency by dividing the annual incremental net operating income by the initial investment cost.