An Internal Economies of Scale Is Defined as

question 34

Multiple Choice

An internal economies of scale is defined as

• A)one whose size or scale effects are not located in the firm,but in the industry.
• B)one with falling costs over a specific level of output.
• C)one with falling costs over a relatively large range of output.
• D)one with falling costs over a relatively large range of output,but definite declining profits.

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Definitions:

Residual Income

A measure of performance that calculates the income an investment generates above the minimum required return.

Net Operating Income

A measure of a company's profitability, calculated by subtracting operating expenses from operating income.

Average Operating Assets

The average value of the assets used in the normal operations of a business over a specific period, typically used in return on investment calculations.

Balanced Scorecard

An integrated set of performance measures that are derived from and support the organization’s strategy.