Refer to the Following Figure

question 66

Multiple Choice

Refer to the following figure.The price of capital is $50 per unit: How many units of labor should the firm use to produce 1,200 units of output at least cost?

• A)120
• B)500
• C)240
• D)128
• E)175

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Definitions:

Net Operating Cash Flows

The amount of cash generated by a company's normal business operations after paying operating expenses and taxes.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return.

Net Present Value

A financial metric used to evaluate the profitability of an investment or project, calculated by subtracting the initial investment from the present value of future cash flows.

Internal Rate Of Return

The discount rate at which the net present value of an investment project is zero; the rate of return promised by a project over its useful life.