Which of the Following Is a Method Firms Can Use

question 19

Multiple Choice

Which of the following is a method firms can use to counteract price fluctuations and eliminate income risk?

• A) Manufacture all needed inputs internally
• B) Acquire upsteam firms in the vertical chain
• C) Enter into futures contracts to hedge the price of raw materials
• D) Eliminate competitors by under-cutting their price
• E) None of the above

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Definitions:

Manage Resources

The process of efficiently and effectively deploying and allocating organizational resources, such as human, financial, and physical assets.

Management Accounting

A field of accounting focused on providing financial data and analysis to managers within the organization for decision-making.

Information Needs

The data and information requirements of users, including managers and stakeholders, to make informed decisions.

CPA Qualification

A certification for accounting professionals that demonstrates expertise in financial accounting and reporting, auditing, taxation, and business law, obtained by passing the CPA exam.