The Long Run Is a Time Period in Which

question 210

Multiple Choice

The long run is a time period in which

• A) some of the firm's resources are fixed.
• B) all of the firm's resources are fixed.
• C) all of the firm's resources are variable.
• D) the firm cannot increase its output.
• E) all costs become explicit costs.

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Definitions:

Repair

The action of fixing or restoring something that is broken or damaged back to its original condition.

Equivalent Annual Cost

A financial analysis tool used to compare the cost effectiveness of two or more alternative investments, taking into account both the initial investment and the annual operating costs.

Discounted Payback

A capital budgeting method that calculates the time required to break even on an investment based on the discounted cash flows.

Profitability Index

A financial tool used to assess the desirability of an investment by dividing the present value of future cash flows by the initial investment cost.