Roberts Electronics Calculates That If It Produces 15 Radar Detectors

question 135

Multiple Choice

Roberts Electronics calculates that if it produces 15 radar detectors, its costs are $1,500, and if it produces 16 radar detectors, its costs are $1,590. In this instance, $90 is the firm's ____ cost.

• A)average
• B)fixed
• C)variable
• D)marginal
• E)average variable

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Definitions:

Weighted Average

A method of calculating an average whereby each component of the dataset contributes to the total average in proportion to its assigned weight.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and satisfy its investors.

Leveraged Value

Utilizing a range of financial tools or leveraging debt to amplify the possible gains from an investment.

Capital Structures

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity, constituting how a firm finances its overall operations and growth.