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mars1129 [50]
3 years ago
15

When a firm is experiencing economies of scale, long-run a. average total cost is minimized. b. average total cost is greater th

an long-run marginal cost. c. average total cost is less than long-run marginal cost. d. marginal cost is minimized.
Business
1 answer:
USPshnik [31]3 years ago
7 0

Answer:

A. Average total cost is minimized

Explanation:

Economies of scale refers to the cost advantages a firm enjoys when production becomes efficient. Economies of scale can be achieved by increasing production and and lowering cost of production.This is because cost are spread over a larger number of goods, thereby, making per unit cost cheaper.

There are two types of cost

1. Fixed cost: They are cost that doesn't change during the production process. Such as buildings, furnitures and fittings, machineries.

2. Variable cost: They are cost that changes with production process such as cost of raw materials.

When a firm is experiencing economies of scale, long-run, average total cost is minimized.

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McCann Co. has identified an investment project with the following cash flows.
Ugo [173]

Answer:

The present value at 11% is $3,902.13,$3,479.85  at 16% and $2,615.57  at 30%

Explanation:

The present value formula is given as :

PV=FV/(1+r)^n

Where FV is the future value of cash flows such as the ones given in the question

r is the rate of return at 11%,16% and 30%

n is the applicable time horizon relevant to each of the cash flow.

Find attached spreadsheet for detailed calculations.

Download xlsx
7 0
3 years ago
Read 2 more answers
How do you solve for an owner's equity​
olganol [36]

Answer:

add up all of the business assets and deducting all of its liabilities.

5 0
2 years ago
Speedy Delivery Company purchases a delivery van for $32,000. Speedy estimates that at the end of its four-year service life, th
RSB [31]

Answer:

(1) Straight-line.

Year 1 depreciation expense = $6,500

Year 2 depreciation expense = $6,500

(2) Double-declining-balance.

Year 1 depreciation expense = $16,000

Year 2 depreciation expense = $8,000

(3) Activity-based.

Year 1 depreciation expense = $7,000

Year 1 depreciation expense = $7,600

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

Speedy Delivery Company purchases a delivery van for $32,000. Speedy estimates that at the end of its four-year service life, the van will be worth $6,000. During the four-year period, the company expects to drive the van 130,000 miles. Actual miles driven each year were 35,000 miles in year 1 and 38,000 miles in year 2.

Required:

Calculate annual depreciation for the first two years of the van using each of the following methods.

(1) Straight-line.

(2) Double-declining-balance.

(3) Activity-based.

The explanation of the answers is now given as follows:

(1) Straight-line.

Depreciable amount = Cost of the delivery van – Salvage value = $32,000 - $6,000 = $26,000

Annual depreciation rate = 1 / Number of useful years = 1 / 4 = 0.25, or 25%

Year 1 depreciation expense = Depreciable amount * Annual depreciation rate = $26,000 * 25% = $6,500

Year 2 depreciation expense = Depreciable amount * Annual depreciation rate = $26,000 * 25% = $6,500

(2) Double-declining-balance.

Note: The salvage value is taken care of in the computation of the depreciation expense for the last useful year under the double-declining-balance method.

Therefore, we have:

Cost of the delivery van = $32,000

Annual depreciation rate = Straight line annual depreciation rate * 2 = 25% * 2 = 50%

Year 1 depreciation expense = Cost of the delivery van * Annual depreciation rate = $32,000 * 50% = $16,000

Book value at the end of year 1 = Cost of the delivery van - Year 1 depreciation expense = $36,000 - $16,000 = $16,000

Year 2 depreciation expense = Book value at the end of year 1 * Annual depreciation rate = $16,000 * 50% = $8,000

(3) Activity-based.

Depreciable amount = Cost of the delivery van – Salvage value = $32,000 - $6,000 = $26,000

Depreciation rate = Actual miles driven each year / Expected driven miles for four years ……….. (1)

Depreciation expense for each year = Depreciable amount * Depreciation rate …………… (2)

Using equations (2), we have:

Year 1 depreciation expense = $26,000 * (35,000 / 130,000) = $7,000

Year 1 depreciation expense = $26,000 * (38,000 / 130,000) = $7,600

5 0
3 years ago
individuals in different segments should have ______ within the segment and ______ across the segments.
pochemuha

Answer:

similarities; differences Is correct answer

Explanation:

individuals in different segments should have similarities within the segment and differences across the segments.

(Hope this helps can I pls have brainlist (crown)☺️)

5 0
3 years ago
Turnover Pulse hypothesis states that ____ eaters faced high rates of extinction during the ice ages
Alisiya [41]

The turnover Pulse hypothesis states that generalist eaters confronted excessive charges of extinction during the ice a long time.

The pulsed climate variability framework indicates there are durations of extreme weather variability every 400 or 800 kyr pushed via the eccentricity maxima while lakes rapidly develop and fill tons of the Rift Valley and then unexpectedly disappear.

Phylogenetic turnover quantifies the evolutionary distance among species assemblages and is principal to expertise the main drivers shaping biodiversity. its miles affected each by means of the geographic and environmental distance between websites.

The theory is that the savannah became increasing because of increasingly more arid situations, which then drove the hominin version.

Learn more about Pulse hypothesis here: brainly.com/question/23086833

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5 0
2 years ago
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