The Cost Formula That Expresses the Behavior of Yang's Total

question 65

Multiple Choice

The cost formula that expresses the behavior of Yang's total cost is:

• A)Y = $0 + $17X.
• B)Y = $20,000 + $13X.
• C)Y = $40,000 + $9X.
• D)Y = $45,000 + $4X.
• E)Y = $60,000 + $5X.

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Definitions:

Discount Rate

A specific rate used in the method of discounted cash flow analysis for calculating the present value of money flows anticipated in the future.

Net Present Value

The gap between what cash inflows and cash outflows are worth now, calculated over a specified period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity.

Incremental Cost Approach

A decision-making process focusing on the additional costs and benefits associated with a particular business decision.