A Profit-Maximizing Oriented Carrier Will Not Set a Price in the Long-Run

question 32

Multiple Choice

A profit-maximizing oriented carrier will not set a price in the long-run that would:

• A) reduce variable costs.
• B) increase fixed costs.
• C) increase customer satisfaction with services rendered.
• D) prohibit the movement of freight or passengers.

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Definitions:

Average Total Assets

The mean value of all assets owned by a company over a specific period, used in financial analysis to gauge the company's asset use efficiency.

Profitability Index

A calculation used to determine the relative profitability of a project by dividing the present value of future expected cash flows by the initial investment.

Present Value

The current worth of a future sum of money or cash flows, given a specified rate of return.

Internal Rate Of Return

The percentage rate that equalizes the net present value of a project's cash flows to zero.