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:

Canadian Dollars

The official currency of Canada, symbolized as CAD, and used for all transactions within the country.

Hockey Jersey

A piece of athletic clothing specifically designed for ice hockey players, typically displaying the team's colors, logos, and the player's number.

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The currency of Poland, used as a medium of exchange within the country.

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A model of SUV produced by the Ford Motor Company, known for its durability, spacious interior, and capability as a family vehicle as well as off-road adventures.