Suppose a Company Unexpectedly Receives a Huge Order for Its

question 233

Multiple Choice

Suppose a company unexpectedly receives a huge order for its main product. To cope with this, the owner borrows money to rent an additional facility to fill the orders and to pay the temporary workers who will produce the large order. The owner does this hoping that the additional costs will be more than covered by the revenue from selling the additional units of the product. Which ratio will be most affected by these decisions?

• A) The short-term solvency ratio
• B) The long-term solvency ratio
• C) The profitability ratio
• D) The activity ratio
• E) The equity ratio

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Definitions:

Roles and Power

The functions, responsibilities, and influence individuals or groups have within a particular context or organization.

Program Evaluation

The systematic method for collecting, analyzing, and using information to answer questions about projects, policies, or programs, particularly about their effectiveness and efficiency.

Stakeholder Buy-In

Stakeholder buy-in refers to the process of getting approval, support, and commitment from stakeholders for a project, initiative, or idea. It involves engaging stakeholders in a manner that they understand and endorse the benefits and objectives of the project.

Internal Evaluation

The process of assessing an organization's or project's performance using the internal staff and resources, rather than external evaluators.