In a Make-Or-Buy Decision, If Facilities Are and Will Remain

question 37

True/False

In a make-or-buy decision, if facilities are and will remain idle when the decision is made to not make a part internally, then the opportunity cost is zero.

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Definitions:

Security Interest

A security interest is a legal claim or lien on collateral, granted to a lender or creditor to secure repayment of a debt or loan.

Perfected

In legal terms, it refers to the completion of all required steps to enforce a security interest or lien against third parties, particularly after default.

Priority

The established order of importance or urgency given to claims, debts, rights, or actions in legal, financial, or other operational contexts.

Floating Lien

A lien on a debtor's assets that changes over time with the inventory levels or changes in collateral included under the lien.