The Figure Shows the Graphs of the Cost and Revenue

question 211

Multiple Choice

The figure shows the graphs of the cost and revenue functions for a company that manufactures and sells
binoculars. Use the information in the figure to answer the question.

-Is there a profit when 947 binoculars are produced?

• A)Yes
• B)No

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.

Financial Asset

Assets that derive value from a contractual claim, such as stocks, bonds, bank deposits, and other investments.

Future Cash Flows

Future cash flows refer to the estimated amount of money that is expected to be received or paid out by a company in future periods.

Sinking Fund

Facilitates the orderly retirement of a bond issue. This can be achieved in one of two ways: the company can call in for redemption (at par value) a certain percentage of bonds each year or the company may buy the required amount of bonds on the open market.