How is break-even analysis useful in the study of the capacity decision? What limitations does this analytical tool have in this application?
What will be an ideal response?
Breakeven is defined as the volume for which costs equal revenue. It is useful to know the break-even point for each capacity alternative under consideration. In reality, costs may not be as linear as they are assumed to be in this model.
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Risk that cannot be eliminated by diversification is
A. unsystematic risk. B. systematic risk. C. default risk. D. interest-rate risk.
Which of the following statements is true?
A. Companies that have a larger budget should choose a presentation method over a hands-on method. B. Group-building methods focus solely on team learning and not on individual learning. C. There is considerable overlap between learning outcomes across the training methods. D. Presentation methods lead to better transfer than hands-on methods.
Which of the following statements is false?
a. There is a relationship between time and relevance. b. An opportunity cost represents the benefits foregone because one course of action is chosen over another. c. Incremental revenue and differential revenue are not the same thing. d. If machine A has an annual operating cost of $30,000 and machine B has an annual operating cost of 26,000 the incremental cost of the 2 machines is $4,000.
The offer must be communicated to the offeree for the offer to be effective
Indicate whether the statement is true or false