Answered: When Sarah was asked to complete a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Please answer 18,19, 20. Thank you!.

18. When Sarah was asked to complete a financial analysis to determine next year’s price of Product X in view of mounting competition, she understood that she did not need to consider fixed costs. She had the correct understanding that fixed costs _____________.

Group of answer choices

a. Changed at a slower rate than direct production costs depending on product production

b. Changed whenever next year’s sales reached the level of sales of the previous year

c. Remained constant in the short term regardless of the amount of the product that the company produced

d. Remained constant over the useful life of the product regardless of the amount of the product that the company produced

19. Rachel, the chief financial officer of Sunrise Fruit Snacks, needed to determine the company’s projected cost of capital for next year. To do so, she needed to know the following information except

Group of answer choices

a. The projected debt level for next year

b. The projected cash balance for next year

c. The projected interest rate on next year’s debt

d. The projected equity level for next year

20. The next year revenue budget for Josiah’s department calls for an increase of 20%. After a great deal of research, he has determined that the price elasticity for his best-selling products is 1.25. In this situation, Josiah should take which following action in order to increase revenue from these products?

Group of answer choices

a. Keep the prices the same

b. Offer a buy one/get one sale

c. Decrease prices

d. Raise prices

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"Since you have asked multiple questions, we will solve first question for you .. If you want any specific question to be solved, Please repost only that question"

18. Here, it is given that Sarah made a correct understanding about the fixed cost due to which she did not considered fixed cost in her situation.

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