Refer to the Figure Below

question 23

Multiple Choice

Refer to the figure below. A charge for electricity that is based on a flat rate plus a variable cost after a certain number of kilowatt-hours are used follows which of the following cost behavior patterns?

• A) Graph A
• B) Graph B
• C) Graph C
• D) Graph D

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Definitions:

WACC

In calculating a firm’s capital costs, the Weighted Average Cost of Capital method considers the proportionate weights of different capital categories.

WACC

Weighted Average Cost of Capital; the average rate of return a company is expected to pay its shareholders for using their capital.

NPV

Net Present Value, a calculation that compares the value of all cash inflows and outflows of a project or investment using a discount rate.

Cash Inflows

The movement of money into a business or project, typically from operations, financing, or investing activities.