Diseconomies of Scope Refers to The

question 39

Multiple Choice

Diseconomies of scope refers to the:

• A)fall in an FI's average costs of production as its output increases
• B)increase in an FI's average costs of production as its output increases
• C)situation in which the costs of joint production of FI services are higher than they would be if they were produced independently
• D)ability of an FI to generate synergistic cost savings through joint use of inputs in producing multiple outputs

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Definitions:

Times Interest Earned

A ratio assessing a firm's capability to fulfill its debt responsibilities through the comparison of its earnings before interest and taxes against its interest expenditures.

Company's Risk

Refers to the inherent uncertainties and potential financial losses a company faces in the course of its operations.

Employer Payroll Taxes

Taxes that employers are required to pay on behalf of their employees, including Social Security and Medicare taxes, federal and state unemployment insurance.

Note Payable

A documented commitment to repay a certain sum of money, typically including interest, at a predetermined time in the future.