Assume a fiRm Is Currently Operating at Full Capacity

question 35

Multiple Choice

Assume a firm is currently operating at full capacity. Sales are forecast to increase by 20% next year. Management could do each of the following EXCEPT:

• A) Attempt to restrain sales growth so that no new fixed assets are needed.
• B) Increase the firm's investment in fixed assets to meet the added demand.
• C) Subcontract with other manufacturers to increase production and meet the added demand.
• D) Lease additional equipment to meet the added demand.
• E) Acquire more current assets in order to meet the added demand.

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Definitions:

Architect

A professional who designs buildings and in many cases also supervises their construction.

Lactovegetarian

A person who follows a vegetarian diet while still consuming dairy products.

Lacto-ovovegetarian

A dietary choice that includes dairy products and eggs but excludes meat.

Vegan

Pertaining to a diet or lifestyle that excludes all animal products, including meat, dairy, and eggs, for ethical, health, or environmental reasons.