Contribution Margin Information Is Not Relevant for

question 62

Multiple Choice

Contribution margin information is not relevant for

• A)the elimination of unprofitable segment decisions.
• B)pricing decisions for special orders.
• C)sales mix with resource constraint decisions.
• D)estimating the sales revenue for next period.

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Definitions:

Expected Return

The average return an investor anticipates receiving on an investment if it is held for a specific period of time.

Risk Premium

The excess return that an investment is expected to generate above the risk-free rate, compensating investors for taking on a higher level of risk.

Arbitrage

The practice of buying an asset in one market and simultaneously selling it in another market at a higher price, thereby profiting from the temporary difference in prices.

Risk-Free Economic Profits

Refers to theoretical profits that an investor can make without taking any market risk, which in reality is very hard to achieve due to market efficiencies.