When a New Generation of Computers That Are Faster and More

question 69

Multiple Choice

When a new generation of computers that are faster and more powerful than the previous generation are introduced into the resource market:

• A)many firms do not change their demand for capital.
• B)many firms increase their demand for capital.
• C)many firms decrease their demand for capital.
• D)the quantity demanded of capital declines.
• E)the quantity demanded of capital increases.

Comprehend the use and significance of residual income and return on investment (ROI) in evaluating investment centers.

Recognize the factors that affect ROI and how changes in sales, expenses, and assets influence it.

Appreciate the importance of non-value-added time in process efficiency and how it affects manufacturing time.

Grasp how land and assets held for expansion are accounted for in financial analysis.

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Definitions:

Industry Price

The general cost at which goods or services are sold within a particular industry, influenced by supply, demand, and competition.

Marginal Cost

The added expense required to produce one more unit of a product or service.

Fixed Cost

An expense that remains constant regardless of the volume of products or services manufactured or distributed.

Monopoly Profits

The excess profits earned by a monopoly as a result of its ability to set price above marginal costs due to lack of competition.