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

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Definitions:

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