It Has Been Suggested That Learning Effects Are Important Only

question 85

Multiple Choice

It has been suggested that learning effects are important only during the start-up period of a new process and that they cease after two or three years. Any decline in the experience curve after such a point is due to

• A) reduction in fixed costs.
• B) higher depreciation costs.
• C) economies of scale.
• D) obsolescence.

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Definitions:

Corporate Bond

A debt security issued by a corporation to raise capital, obligating the issuer to pay interest and repay the principal at a specified date.

Investment Strategy

An investor's plan of distributing assets among various investments aimed at achieving a specific financial goal.

Dividends

Payments made by a corporation to its shareholder members from the company's earnings.

Equity

The value of an owner's interest in a property or business, after all debts associated with that property or business are paid off.