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Peter's TV Supplies is considering a merger with Jan's Radio Supply Stores. Peter's total operating costs of producing services are $270,000 for a sales volume
Peter's TV Supplies is considering a merger with Jan's Radio Supply Stores. Peter's total operating costs of producing services are $270,000 for a sales volume (Sp) of $4.7 million. Jan's total operating costs of producing services are $52,000 for a sales volume (Sj of $570,000. a. Calculate the average cost of production for the two firms. (Round your answers to 2 decimal places.) b. If the two firms merge, calculate the total average cost (TAC) for the merged firm assuming no synergies. (Round your answer to 2 decimal places.) c. Suppose, instead, that synergies in the production process result in a cost of production for the merged firms totaling $290,000 for a sales volume of $5,270,000. Calculate the total average cost (TAC) for the merged firm. (Round your answer to 2 decimal places.)
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