Financial Account If a technological advance reduces the amount of variableresources needed to produce any level of output, thenthe:a. the AVC curve to shift downward,b. the MC curve to shift downward,c. the ATC curve to shift downward,d. All of the answers given.

Answered: If a technological advance reduces the…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter11: Cash Flow Estimation And Risk Analysis

Section11.9: Replacement Analysis

Problem 3ST

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When output volume increases, do fixed costs per unit increase, decrease, or stay the same within the relevant range of activity? Explain.
When the level of activity increases, total fixed costs a. decrease. b. remain the same. c. increase. d. change, but the direction depends on the specific situation.
Which of the following cost behavior assumptions is true? (You may select morethan one answer.)a. Variable costs are constant if expressed on a per unit basis.b. Total variable costs increase as the level of activity increases.c. The average fixed cost per unit increases as the level of activity increases.d. Total fixed costs decrease as the level of activity decreases
Y = a + bx which option describe this function? a. a- variable cost; b- level of activity , x- fixed cost b. None of the answers given c. a- variable cost; b- fixed cost, x- level of activity d. a- level of activity; b- variable cost , x- fixed cost
What is an opportunity cost? How is this concept used in TVM analysis, and where is itshown on a time line? Is a single number used in all situations? Explain.
7. Which of the following charts best represent total variable costs? For each chart, the line represents the cost behavior pattern, the vertical axis represents costs, and the horizontal axis represents total volume, (A) Your answer is (B) (C) (D) Explain your answer: 8. Which of the following is NOT a cost estimation method? A) High-low cost estimation B) Scatter diagrams C) Least-square regressions D) CVP analysis Your answer is Explain your answer: 9. Assume a local Cost Cutters provides cuts, perms, and hairstyling services. Annual fixed costs are $120,000, and variable costs are 40 percent of sales revenue. Determine its break-even point in sales dollars. A) $250,000 B) $200,000 c) $240,000 D) $360,000 Your answer is Explain your answer:
14 Within the relevant range of activity, how will variable cost per unit behave? Select one: a. Its behaviour cannot be determined without additional information. b. It will vary inversely with the level of activity. c. It will increase in proportion with the level of activity. d. It will remain constant.
If the ordering cost triples in an EOQ model, while the remaining values stay constant, how will the EOQ change? How sensitive is the EOQ to variations in demand or costs?
Explain what is meant by the long wave and the short wave of value creation.
What is the role that the required rate of return plays in the NPV model? In the IRR model?
CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent with these assumptions, as volume decreases total Group of answer choices fixed costs decrease. variable costs remain constant. costs decrease. costs remain constant.
Variable costs are costs that: A.vary inversely proportional with changes in activity B.Remain constant as activity changes C.Decrease on a per unit basis as activity increases D.Remain constant on a per unit basis as activity changes

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If a technological advance reduces the amount of variable resources needed to produce any level of output, then the: a. the AVC curve to shift downward, b. the MC curve to shift downward, c. the ATC curve to shift downward, d. All of the answers given.