AECN 201 Lecture Notes - Lecture 8: Opportunity Cost, Income Statement, Marginal Cost
Document Summary
Adding more layers of management cause cost structure to go up. Physical inefficiencies cause cost structure to go up. 2: no one level of production is the best place to produce. Profitability drives liquidity and solvency: not tied in short-run. If the debt/equity ratio is . 4 and total equity is ,000,000, what are total assets. Industry: adjustments, size, other profitability ratios, doesn"t account for opportunity costs. Assuming field is fixed and you are adding all inputs not just one input. Average fixed cost of an asset --> how much on average would it cost to own an asset and not us it. An asset with purchase price of ,000,000 and sv of ,000 and ul of 10yrs. Borrow money at 7% --> know it is 7% Borrow half at 7% and used own capital at 4% Only taking into account how much the piece of equipment is worth at each year. Producing beef with pasture that we have.
