The Following Three Projects Would Seem to Compete with One

question 41

True/False

The following three projects would seem to compete with one another form the firm's resources and therefore would be examples of mutually exclusive projects.
(1) installing air conditioning in the plant
(2) acquiring a small supplier
(3) purchasing a new computer system

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Definitions:

Fixed Cost

Expenses that do not change in the short term, irrespective of the level of production or sales volume.

Average Total Cost

The total cost of production divided by the number of units produced, calculating the per-unit cost to produce goods or services.

Variable Cost

Costs that change in proportion to the good or service that a business produces, such as raw materials and labor.

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, and insurance payments.