Consider a Water Well That Can Be Drilled in Either

question 45

Multiple Choice

Consider a water well that can be drilled in either a shallow, unconfined aquifer or a deep, confined aquifer. Drilling deeper will cost more money; however, the choice is made to drill into the confined aquifer. This is because the confined aquifer will

• A)most likely have a higher water quality.
• B)most likely have a higher permeability.
• C)not be subject to overpumping.
• D)contain more water.

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Definitions:

Contribution Margin Ratio

A ratio that measures the proportion of each sales dollar remaining after variable costs have been deducted.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit of a product, indicating how much each unit sold contributes to covering fixed costs and generating profit.

Break-even

The situation in which complete costs equate to total revenues, achieving a break-even point with no gains or losses.

Unit Sales

The number of individual units sold by a company during a specific period.