Use the Following Statements to Answer This Question

question 24

Multiple Choice

Use the following statements to answer this question:
I. The scale economies index is positive if the cost-output elasticity that is greater than one.
II. A negative scale economies index indicates the presence of diseconomies of scale.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false
• D) I and II are true

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Definitions:

Relevant Cash Flows

Cash flows that will only occur as a result of undertaking a project or investment.

Financial Perspective

An viewpoint emphasizing the importance of managing a company's financial resources wisely to ensure its long-term success and stability.

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of a company in managing its expenses and profits.

Required Accounting Return

The minimum return that a company needs to achieve on its investments based on accounting principles, to satisfy stakeholders or internal benchmarks.