The Phone Bill for a Company Consists of Both Fixed

question 62

Multiple Choice

The phone bill for a company consists of both fixed and variable costs.Refer to the four-month data below and apply the high-low method to answer the question.(Round any intermediate calculations to the nearest cent,and your final answer to the nearest dollar. ) $$\begin{array} { | l | r | r | } \hline & \text { Minutes } & \text { Total Bill } \\\hline \text { Tanuary } & 460 & \$ 3,000 \\\hline \text { February } & 200 & \$ 2,675 \\\hline \text { March } & 180 & \$ 2,630 \\\hline \text { April } & 320 & \$ 2,840 \\\hline\end{array}$$ What is the fixed portion of the total cost?

• A)$607
• B)$370
• C)$2,393
• D)$2,630

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Definitions:

Capital Investment

Funds invested in a business or enterprise with the intention of furthering its business objectives.

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

NPV

Short for Net Present Value, which is a financial metric used to evaluate the profitability of an investment or project, considering the time value of money.

IRR

Internal Rate of Return - a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.