A manufacturing company had been under pressure to increase profits, so it began to produce additional goods. The company was encouraged by the initial increases in revenue, even though profits per item produced were lower than average. Still, total profits increased, so the company decided to make another significant increase in production. This time, however, the profit per item had decreased so much that the company made almost no extra profit from the increase in production. This situation illustrates what concept? A. Law of diminishing returns B. Productivity analysis C. Cross-training D. Comparative advantage

Grey company holds an overdue note receivable of $800,000 plus recorded accrued interest of $64,000. the effective interest rate is 8%. as the result of a court-imposed settlement on december 31, year 3, grey agreed to the following restructuring arrangement: reduced the principal obligation to $600,000.forgave the $64,000 accrued interest.extended the maturity date to december 31, year 5.annual interest of $40,000 is to be paid to grey on december 31, year 4 and year 5. the present value of the interest and principal payments to be received by grey company discounted for two years at 8% is $585,734. grey does not elect the fair value option for reporting the debt modification. on december 31, year 3, grey would recognize a valuation allowance for impaired loans of