TABLE 8-1 -Refer to Table 8-1.If the Price of Labour Is $5

question 10

Multiple Choice

TABLE 8-1

-Refer to Table 8-1.If the price of labour is $5 and the price of capital is $10,which production technique minimizes the costs of producing 1000 units of output?

• A)A
• B)B
• C)C
• D)D
• E)Any of the techniques have the same cost.

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Definitions:

Incremental Pre-tax Profits

Additional earnings before taxes that result from specific actions or decisions, used in investment appraisal.

Variable Costs

Variable costs are expenses that change in proportion to the activity of a business, such as sales volume or production levels.

Credit Terms

The conditions, including payment deadlines and interest rates, under which credit is extended to a borrower.

Aging Schedules

Timetables in accounting that categorize a company's accounts receivable according to the length of time an invoice has been outstanding.