A manager invests $400,00 . in a technology to reduce overall costs of production. The company managed to reduce their cost per unit from $2 to $1.85 . After a year, the manager has an opportunity to outsource production to another company at a cost per unity of $1.75 . If you are the manager, you
a. should consider the $400,00 . as sunk cost and therefore it should not be relevant to the decision.
b. should base your decision upon economic profit and not accounting profit
c. should avoid the fixed-cost fallacy
d. all the above
d
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When the percentage change in the quantity demanded exceeds the percentage change in price, then demand is
A) inelastic. B) unit elastic. C) elastic. D) irrelevant. E) undefined.
If the interest is 5%, should the firm undertake the investment?
a. Yes, since NPV=0 b. Yes, since NPV<0 c. Yes, since NPV>0 d. No, since NPV=0
Purchasing a profitable supplier increases profit only if
a. You pay equal to the value of the company's inventory b. You pay higher than the value of the company's future profits c. You pay lower than the value of the company's discounted future profits d. You pay lower than the value of the company's undiscounted future profits
The centering of explanatory variables about their sample averages before creating quadratics or interactions forces the coefficient on the levels to be average partial effects.?
Answer the following statement true (T) or false (F)