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CHAPTER 3-2 - 9 If a company is growing by opening new...

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9. If a company is growing by opening new stores, then presumably total revenues would be rising. Comparing total sales at two different points in time might be misleading. Same-store sales control for this by only looking at revenues of stores open within a specific period. 10. a. For an electric utility such as Con Ed, expressing costs on a per kilowatt hour basis would be a way to compare costs with other utilities of different sizes. b. For a retailer such as Sears, expressing sales on a per square foot basis would be useful in comparing revenue production against other retailers. c. For an airline such as Southwest, expressing costs on a per passenger mile basis allows for comparisons with other airlines by examining how much it costs to fly one passenger one mile. d. For an on-line service provider such as AOL, using a per call basis for costs would allow for comparisons with smaller services. A per subscriber basis would also make sense.
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