A Survey of a Local Market Provided the Following Average

question 67

Multiple Choice

A survey of a local market provided the following average cost data: Johnson Construction Corp. (JCC) has assets of $4 million and an average cost of 10 percent; Anderson Architects (AA) has assets of $5 million and an average cost of 20 percent; Cole Home Builders (CHB) has assets of $5 million and an average cost of 15 percent. For each firm, average costs are measured as a proportion of assets. JCC is planning to acquire AA and CHB with the expectation of reducing overall average costs by eliminating the duplication of services. What should be the average cost after the acquisition for JCC to justify this merger?

• A) 15.357 percent or lower
• B) 15.357 percent or higher
• C) 15.000 percent or lower
• D) 10.000 percent or lower

---

Definitions:

Illegal Wildlife Smuggling

The unlawful trade and transport of wild animals or plants, often threatening biodiversity and endangered species.

Black-Market Commerce

The illegal trade of goods and services, circumventing authorized channels, taxation, and regulatory oversight.

LDCs

Least Developed Countries, nations with the lowest indicators of socioeconomic development, according to the United Nations.

Poachers

Individuals who illegally hunt, catch, or harvest wildlife or plants from land where they do not have the rights to do so, often leading to conservation issues.