A Firm Is Deciding Whether or Not to Close Down

question 26

Multiple Choice

A firm is deciding whether or not to close down its plant and modernize by installing new technology.Which of the following should management ignore when making the decision?

• A)How much the present plant cost
• B)Cost of lost sales while the plant is closed
• C)Added cost of the labor needed for the new plant
• D)All of the above

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Definitions:

Resources

Assets or inputs needed by an organization or individual to produce goods or services.

Knowledge

Information, understanding, and skills that individuals acquire through experience or education; the theoretical or practical understanding of a subject.

Legal Entities

Organizations that have legal rights and responsibilities, recognized as such by law, such as corporations, partnerships, and sole proprietorships.

Cooperative Agreements

Legal arrangements where two or more entities collaborate towards a common objective, sharing responsibilities and benefits.