Which of the following statements are true: I. The experience curve represents a linear relationship between output and cost/unit II. Diseconomies of scale are caused by lower operating and capital costs III. There is no relationship between the experience curve and economies of scale IV. Assuming an experience curve, the cost per unit from the 10th to the 11th unit will be higher than the cost from the 25th to the 26th unit Group of answer choices I, II and III are correct statements I, III and IV are correct statements Only I and IV are correct statements Only IV is a correct statement All statements are correct International Paper is trying to find the best paper rolling machine to maximize sales volume. There are three machine options: Machine A, Machine B, and Machine C. Annual revenue is expected to be at one of three possible levels, High, $6 million; Medium, $3 million; or Low, $2 million; but is impacted by machine selection as the probabilities show in the table below: High Revenue Medium Revenue Low Revenue Machine A .1 .3 .6 Machine B .4 .4 .2 Machine C .5 .4 .1 Which machine should International Paper purchase to maximize the expected revenue, and what is the expected revenue? Group of answer choices Machine A, $2.7 million Machine B, $4.0 million Machine B, $4.6 million Machine C, $4.4 million none of the answers provided are correct
Which of the following statements are true:
I. The experience curve represents a linear relationship between output and cost/unit
II. Diseconomies of scale are caused by lower operating and capital costs
III. There is no relationship between the experience curve and economies of scale
IV. Assuming an experience curve, the cost per unit from the 10th to the 11th unit will be higher than the cost from the 25th to the 26th unit
International Paper is trying to find the best paper rolling machine to maximize sales volume. There are three machine options: Machine A, Machine B, and Machine C. Annual revenue is expected to be at one of three possible levels, High, $6 million; Medium, $3 million; or Low, $2 million; but is impacted by machine selection as the probabilities show in the table below:
| High Revenue | Medium Revenue | Low Revenue | |
| Machine A | .1 | .3 | .6 |
| Machine B | .4 | .4 | .2 |
| Machine C | .5 | .4 | .1 |
Which machine should International Paper purchase to maximize the expected revenue, and what is the expected revenue?
Group of answer choices
Machine A, $2.7 million
Machine B, $4.0 million
Machine B, $4.6 million
Machine C, $4.4 million
none of the answers provided are correct
The experience curve is the curve that shows the relationship between cost per unit and cumulative volume (output). This curve was developed by BCG (Boston Consulting Group).
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