In a Make or Buy Decision,the Reliability of a Potential

question 101

Multiple Choice

In a make or buy decision,the reliability of a potential supplier is

• A)an irrelevant decision factor.
• B)relevant information if it can be quantified.
• C)an opportunity cost of continued production.
• D)a qualitative decision factor.

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Definitions:

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets financed by its shareholders' equity.

Stockholders' Equity

Represents the residual interest in the assets of a corporation after deducting liabilities, essentially the net worth attributable to shareholders.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period of time, indicating efficiency in inventory management.

Projected Level

An estimate of future levels of a variable, such as sales or income, based on current trends and assumptions.