A Survey of a National Market Provided the Following Average

question 29

Multiple Choice

A survey of a national market provided the following average cost data: Jackson County Construction (JCC) has assets of $2 million and an average cost of 30 percent; Arkansas Architects (AA) has assets of $1.5 million and an average cost of 20 percent; Colorado Home Builders (CHB) has assets of $500,000 and an average cost of 10 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. If JCC plans to reduce operating costs by $200,000 after the merger, what will the average cost be for the new firm?

• A) 18.75 percent
• B) 19.74 percent
• C) 20.00 percent
• D) 16.67 percent

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Definitions:

Synesthesia

A condition in which one sense is simultaneously perceived as if by one or more additional senses, such as when seeing sound as colors.

Distal Stimulation

The occurrence of stimuli in the external environment that interact with our sensory organs, leading to perception.

Sensation

How our sensory receptors and nervous system take in and depict energies coming from stimuli in our surroundings.

Absolute Threshold

The minimum intensity of a stimulus that one can detect at least 50% of the time.