Make-Versus-Buy Analysis Involves Which of the Following

question 31

Multiple Choice

Make-versus-buy analysis involves which of the following?

• A) Setting total cost of make option versus total cost of buy option and solving for break-even point
• B) Setting total cost of make option versus total revenue of buy option and solving for break-even point
• C) Setting total revenue of make option versus total revenue of buy option and solving for break-even point
• D) Setting total profit from make option versus total profit from buy option and solving for break-even point

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Definitions:

Net Cash

The amount of cash that remains after deducting all operational, financial, and investment activities over a period.

Cash Basis

An accounting method where revenues and expenses are recorded when they are actually received or paid, not when they are incurred.

Operating Activities

The day-to-day functions of a business related to producing and selling its products or services, which are reflected in the cash flow statement.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments, reflected in the cash flows of a business.