Which One of the Following Statements About Capacity Is Best

question 99

Multiple Choice

Which one of the following statements about capacity is best?

• A) Companies with flexible flow processes tend to have small-capacity cushions.
• B) Companies with high capital costs tend to have large-capacity cushions.
• C) Companies that have considerable customization tend to have larger-capacity cushions.
• D) Constant demand rates require larger-capacity cushions.

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Definitions:

Market/Book Ratio

A financial metric comparing a company's market value to its book value, indicating how much investors are willing to pay above the net asset value.

Stock Price

The current price at which a particular stock is trading on the stock market.

Book Value

Book value is the value of a company or asset as recorded on the balance sheet, calculated by subtracting liabilities from assets.

Net Income

The total revenue minus total expenses of a company, representing the profit or loss over a specified period.