The NPV for Galt Motors of Manufacturing the Armatures in House

question 7

Multiple Choice

The NPV for Galt Motors of manufacturing the armatures in house is closest to:

• A) 1,095,000
• B) 1,215,000
• C) 1,225,000
• D) 1,250,000

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Definitions:

Diminishing Marginal Product

Diminishing marginal product is an economic principle stating that adding an additional factor of production results in smaller increases in output after a certain point.

Variable Cost

A cost that varies with the level of output or production activity.

Marginal Product

The marginal product is the additional output gained by employing one more unit of input, such as labor, in the production process.

Bouquets

Arrangements of flowers, often decorative and used as gifts or for special occasions.