Solve the Problem. -A Firm Is Considering a New Product. the Accounting Department

question 52

Multiple Choice

Solve the problem.
-A firm is considering a new product. The accounting department estimates that the total cost, C(x) , of produx units will beC(x) = 60x + 3,680.The sales department estimates that the revenue, R(x) , from selling x units will beR(x) = 70x,but that no more than 485 units can be sold at that price. Find and interpret (R -C) (485) .

• A)$1,170 profit, income exceeds cost It is worth it to develop product.
• B)-$1,170 loss, cost exceeds income It is not worth it to develop product.
• C)$66,730 profit, income exceeds cost It is worth it to develop product.
• D)$853 profit, income exceeds cost It is worth it to develop product.

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Definitions:

Rationale for Merger

The strategic reasons behind why two companies decide to combine forces, often to achieve synergies, grow market share, or reduce competition.

Firms Combined

Firms Combined typically refers to the merger or consolidation of two or more businesses to form a single combined entity, often aiming for operational efficiencies and expanded market share.

Separate Values

Separate Values pertains to distinctly evaluating different assets, liabilities, or components for financial, analytical, or assessment purposes.

Synergies

The additional value created by combining two or more companies or assets, expected to lead to greater efficiency or profitability.