The Shadow Price

question 91

Multiple Choice

The shadow price

• A) indicates the amount by which throughput will increase for one unit of unconstrained resource.
• B) is the price paid on the black market for one unit of scarce resource.
• C) is the price paid at night for a scarce resource.
• D) indicates the amount by which contribution margin will increase for one unit of scarce resource.

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Definitions:

Financial Planning Models

Tools or software used for projecting future financial results and for strategic financial planning, often in the form of spreadsheets or specialized software.

Financial Relationships

Financial relationships refer to the connections between different financial variables, metrics, and performance indicators that help in analyzing and evaluating the financial health of an entity.

Accounting Relationships

The connections and correlations between different financial statements and accounts within a business's accounting system.

Capital Intensity Ratio

A measure of the amount of capital needed per dollar of revenue, indicating the level of investment required to sustain operations.