A firm has Total Costs (TC) of $12,000 over the next three m
Not what you're looking for?
A firm has Total Costs (TC) of $12,000 over the next three months (TOTAL for the 3 months - not per month), of which $8,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $6,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning.
Purchase this Solution
Solution Summary
A firm has Total Costs (TC) of $12,000 over the next three months (TOTAL for the 3 months - not per month), of which $8,000 are fixed costs (TFC) for rent on its lease that cannot be broken. If it stays in business over those months, then the firm will collect only $6,000 in revenues (TR). So, considering only this information, should they stay in business for those three months or should they close down right now? Provide your reasoning.
Solution Preview
Total costs are $12,000 for a three month period. $8,000 is attributed to a fixed cost. If they remain open, the firm will collect $6,000 in revenues. (6,000 - ...
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Income Streams
In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking