Which One of the Following Statements About Capacity Cushion Is

question 118

Multiple Choice

Which one of the following statements about capacity cushion is best?

• A) A larger cushion increases manufacturing lead time.
• B) Businesses find large cushions appropriate when demand varies.
• C) A larger cushion increases equipment utilization when capital intensity is high.
• D) A larger cushion is required when a firm uses low cost as a competitive priority.

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Definitions:

Compounded Monthly

A method where interest is added to the principal every month, allowing the interest to earn interest in subsequent months.

Compounded Semi-Annually

The process of calculating interest where the interest is added to the principal sum of a loan or deposit twice a year.

Mutual Fund

A type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is managed by an investment company with the capital pooled from many investors.

Rate of Total Return

A measure of the gain or loss on an investment over a specified period, including interest, capital gains, dividends, and distributions realized over the period.