Use the Following to Answer Question

question 217

Multiple Choice

Use the following to answer question:
-(Table: The Production Possibilities for Tractors and Crude Oil) Use Table: The Production Possibilities for Tractors and Crude Oil.Which statement is TRUE?

• A)The opportunity cost of crude oil is lower in the United States than in Mexico.
• B)The opportunity cost of crude oil is higher in the United States than in Mexico.
• C)Crude oil costs are the same in the United States and in Mexico.
• D)Tractor costs are the same in the United States and in Mexico.

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Definitions:

Inventory Period

The time it takes to acquire and sell inventory.

Operating Cycle

The duration between the acquisition of inventory by a company and the receipt of cash from accounts receivable, indicating how quickly a company turns over inventory and collects debts.

Incremental Cash Flow

The additional cash flow an organization receives from taking on a new project.

Credit Policy

Guidelines that a company follows to determine credit terms for customers, including who is offered credit and on what terms.