A Significant Determining Factor on Whether a Firm Conducts an Activity

question 52

Multiple Choice

A significant determining factor on whether a firm conducts an activity internally is

• A)whether the transaction costs of buying in the activity in the market exceed the administrative cost of doing it themselves.
• B)whether transaction costs in the market of buying in the activity exceed the administrative cost buying it in.
• C)how reliable their workforce is, compared with an external supplier's reliability.
• D)none of the above.

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Definitions:

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing the owners' claim on the business.

Balance Sheet Valuations

The process of determining the value of assets, liabilities, and equity as they are presented on a company's balance sheet at a specific point in time.

U.S.GAAP

United States Generally Accepted Accounting Principles, a set of accounting standards used in the U.S. for financial reporting.

Actuarial Adjustment Losses

Losses recognized when there are changes to actuarial assumptions used in calculating pension obligations or other post-retirement benefits.