Which One of the Following Statements About Capacity Expansion Is

question 113

Multiple Choice

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

• A) The follow- the- leader strategy can help a firm gain a competitive advantage.
• B) The expansionist strategy minimizes risk.
• C) The wait- and- see strategy involves small jumps in capacity compared to the expansionist strategy.
• D) The expansionist strategy involves frequent jumps in capacity compared to the wait- and- see strategy.

---

Definitions:

LIFO

"Last In, First Out," an inventory valuation method where the last items added to inventory are considered sold first.

Retail Inventory Method

An accounting method used by retailers to estimate their ending inventory balances by applying a cost-to-retail price ratio to the retail value of the inventory.

Cost-to-retail Ratio

A method used to estimate the value of ending inventory based on the ratio of the cost of goods available for sale to the retail price of those goods.

Ending Inventory

The worth of products ready for sale at the close of an accounting cycle, determined by adding the initial inventory and purchases, then subtracting the cost of goods sold.