A Business Will Usually Choose to Produce a New Product

question 77

Multiple Choice

A business will usually choose to produce a new product in an existing facility if the cost is less than the cost of building a new one and the

• A) type of technology needed for the new product is the same as the technology used by the existing products.
• B) new product is an extension of an existing product line already produced in the factory.
• C) human resources requirement for the new product and existing products can be satisfied with the facility's current employees.
• D) product design is already completed.
• E) existing factory has enough capacity to handle demand for the new product as well as the existing products.

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Definitions:

Accounts Receivable

Represents amounts due from customers for credit sales, expected to be received in the near future.

Managing

The process of planning, organizing, leading, and controlling resources to achieve organizational objectives efficiently and effectively.

Calendar-year

A one-year period starting on January 1 and ending on December 31, used as the fiscal year by many companies.

Interest Income

Income earned on various forms of investments like savings accounts, certificates of deposit, bonds, and loans.