If There Is No Idle Capacity Then Opportunity Costs Should

question 29

True/False

If there is no idle capacity then opportunity costs should be considered.

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Definitions:

Profit Margin

Profit Margin is a financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating how much profit a company retains from its sales.

Sales Increase

An upward movement in the volume or value of products or services sold by a company over a given period.

External Financing Needed

This is the amount of money a company needs to seek from external sources to finance its operations, growth, or expansions that cannot be funded through internal cash flow alone.

Fixed Assets

Long-term tangible assets held for business use and not expected to be converted to cash in the upcoming year, such as buildings, machinery, and equipment.