When Company Tech Decides to Produce a New Product Line

question 114

Multiple Choice

When Company Tech decides to produce a new product line and determines the desired capacity, the next step is to

• A) decide how big to build the new factory.
• B) hire new workers for the facility.
• C) decide whether to build a new plant or refurbish an existing plant.
• D) determine which of the company's existing plants is best suited to produce the new product.
• E) determine what the magnitude of the conversion process will be.

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Definitions:

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Dividends

Disbursements from a corporation to individuals holding its stock, serving as their share of the earnings.

Ending Equity

The value of an owner's interest in a property or a business at the end of an accounting period after all debts have been subtracted.

Retained Earnings

A portion of company profits not paid out as dividends but reinvested in the business, used for debt payment, or saved as cash reserves.