Which of the Following Statements About the Dynamics of World

question 120

Multiple Choice

Which of the following statements about the dynamics of world trade is most accurate?

• A) Manufactured goods and commodities account for only 10 percent of world trade.
• B) Three-fourths of world trade includes services such as telecommunications, transportation, and banking.
• C) World trade will likely exceed $25 trillion by 2015.
• D) All nations participate equally in world trade.
• E) There is still greater growth potential in developed countries than emerging ones.

Learn how real options influence capital budgeting decisions and project valuation.

Comprehend sensitivity, scenario, and simulation analyses as tools for assessing project risks.

Identify various methods for incorporating risk into capital budgeting, including Monte Carlo simulation.

Understand the implications of project risk on a firm's financial health and risk profile.

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Definitions:

High-low Method

A technique in cost accounting used to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and their respective costs.

Variable Cost Per Unit

The cost that varies with the level of output or production, calculated on a per-unit basis.

Fixed Costs

Expenses that remain constant for a business regardless of the level of production or sales volume.

Break-even Sales

The amount of revenue needed to cover a business's total fixed and variable costs, marking the point at which a business neither makes a profit nor a loss.