When Buyers Become Too Aggressive by Borrowing Funds for Future

question 4

Multiple Choice

When buyers become too aggressive by borrowing funds for future investment in the expectation of a good return, this is called ______________.

• A) arbitrage
• B) leveraging
• C) day trading
• D) buying short

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Definitions:

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, contributing to covering fixed costs and generating profit.

Production Constraint

A limitation or bottleneck in a manufacturing process that affects the overall output.

Contribution Margin Ratios

The proportion of sales revenue that remains after variable costs are subtracted, indicating how well a company can cover fixed costs and generate profits.

Constrained Resource

A factor within a production or operation process that limits the overall output, such as limited machinery, labor, or materials.