Which of the Following Statements Concerning Lumpy Assets Is Correct

question 12

Multiple Choice

Which of the following statements concerning lumpy assets is correct?

• A)Purchasing lumpy assets generally does not have a significant effect on the amount of fixed assets a firm holds.
• B)Lumpy assets normally are extremely liquid.
• C)If it can only purchase lumpy assets, it is possible that a firm will be required to invest a substantial amount in plant and equipment to attain a small projected increase in sales.
• D)Lumpy assets can be acquired in small increments.
• E)Lumpy assets generally have lives that are less than 12 months.

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Definitions:

Total Cost

The sum of fixed and variable costs incurred by a firm in producing a certain level of output.

Pollution Reduction

Efforts or strategies aimed at decreasing the amount of pollutants released into the environment.

Government Caps

Limits set by the government on the amount of a commodity or service that can be produced, sold, or used.

Pollution Permits

Licenses issued by governments that allow the holder to emit a certain amount of pollutants over a given time period.