Marginal Cost Is Equal to The

question 54

Multiple Choice

Marginal cost is equal to the:

• A) change in total variable cost divided by the change in output.
• B) total variable cost divided by the level of output.
• C) price of the input divided by the average product of the variable input.
• D) price of the input divided by the total product of the variable input.
• E) total variable cost divided by the change in output levels.

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Definitions:

Price/Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings, used to evaluate if a stock is over or under-valued.

Market Value Added

A calculation that shows the difference between the market value of a company and its capitalized value on the balance sheet.

EBITDA Coverage Ratio

A financial ratio that measures a company's ability to pay off its incurred debt, calculated by dividing EBITDA by total debt service costs.

Debt Ratio

A financial ratio that measures the proportion of a company's total debt to its total assets, indicating the degree of leverage and financial risk.