FastForward Has Net Income of $18,955 and Assets at the Beginning

question 95

Multiple Choice

FastForward has net income of $18,955 and assets at the beginning of the year of $200,000.Its assets at the end of the year total $246,000.Compute its return on assets.

• A)7.7%
• B)8.5%
• C)9.5%
• D)11.8%
• E)13.0%

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Definitions:

Shut-down Point

The level of operation at which a firm's total revenue is equal to its total variable costs, below which it is more beneficial for a firm to cease production.

Average Variable Cost

The variable cost (cost that changes with production volume) divided by the quantity of output produced.

Profit-maximizing

Refers to the process by which a company determines the price and output level that returns the greatest profit.

MR = MC

An economic principle stating that optimal production level is reached when marginal revenue equals marginal cost.