Steve, Chevy and Martin Agree to Share Profits in the Ratio

question 44

Multiple Choice

Steve, Chevy and Martin agree to share profits in the ratio 3: 5: 2. This means:

• A) Steve is entitled to 3/5 of the profits.
• B) Chevy is entitled to 1/2 of the profits.
• C) Martin is entitled to 2/8 of the profits.
• D) Steve is entitled to 1/3 of the profits.

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Definitions:

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.

Forecasted Cost

An estimate of the expenses that will be incurred on a project or by a company in a future period.

Average Cost

The total cost of goods available for sale divided by the total number of units available for sale, determining an inventory valuation.

Sensitivity

The degree to which the value of an investment or financial metric responds to changes in market conditions or other variables.