Which of the Following Outcomes of a Risk / Payoff

question 37

Multiple Choice

Which of the following outcomes of a risk / payoff matrix,used for evaluating a new product process,is most likely to be the costliest for a firm?

• A)Stopping a product that would fail
• B)Continuing a product that would fail
• C)Stopping a product that would succeed
• D)Continuing a product that would succeed

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Definitions:

Unit Price

The cost of a single unit of product or measure, which enables comparison of costs among different sizes or types of packages.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which includes materials, labor, and other variable costs.

Break-even Chart

A graphical representation showing the point at which total costs and total revenue are equal, thus indicating no profit or loss.

Fixed Costs

Business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance premiums.