Answer: A firm should not continue production when its MR is lower than its AVC.
Explanation:
The goal of every firm is to minimize cost and also maximize profits and therefore the firm will operate at the output level where the marginal revenue and the marginal cost equates.
A firm should not continue production when its MR is lower than its AVC. Here, the firm will incur a higher loss during production as producing will not offset the variable cost. Therefore, it's better to shut down.
Answer:
9%
Explanation:
According to the given situation, the solution of return on investment is shown below:-
Return on investment = (Net operating income ÷ Average operating assets) × 100
now, we will put the values into the above formula
= ($45,360 ÷ $504,000) × 100
= 0.09 × 100
= 9%
Therefore for computing the return on investment we simply applied the above formula.
Budgeting period is an allocation of time to plan for your money and how or where it's gonna be used. There are two types of budgeting period: Short term and Long term.
Short-term Budgeting period
This budgeting period covers from 6 months to a year, depending on the nature of the business. For seasonal businesses, it should cover at least one seasonal cycle. For wholesale and retail businesses, 6 month is enough.
Long-term Budgeting Period
This covers more than a year of operating. It focuses on the futuristic performance of a business or company. Factors used are market trends, economic growth, inflation rates and industrial production. These factors help foresee profit or problems that may arise. Consequently, this will also help you in your present decisions.
An entrepreneur is a person who starts a business and is willing to risk loss in order to make money” or “one who organizes, manages, and assumes the risks of a business or enterprise.”
A = Pe^(rt)
<span>A = 5e^(0.02)(8) = 5.87 billion </span>
