Cindy's Computer Corp

question 17

Multiple Choice

Cindy's Computer Corp.is considering a merger with Bobby's Hard Drive,Inc.Cindy's total operating costs of producing services are $2.1 million for a sales volume (S_C) of $13 million.Bobby's total operating costs of producing services are $2.5 million for a sales volume (S_B) of $7 million.If the two firms merge,calculate the total average cost (TAC) for the merged firm assuming no synergies.

• A)23 percent
• B)17 percent
• C)19 percent
• D)21 percent

---

Definitions:

Maturity Value

The amount payable to an investor at the end of a debt instrument's life, including principal and interest.

Note Receivable

A financial asset representing a written promise for future amounts to be received, typically including interest by another party.

Promissory Note

A financial document in which one party promises in writing to pay a determinate sum of money to another party under specified terms.

Interest Calculation

The process of determining the amount of interest owed or earned over a specific period, based on the principal amount and the rate of interest.