Which of the Following Statements About Capacity Strategies Is NOT

question 36

Multiple Choice

Which of the following statements about capacity strategies is NOT correct?

• A)Lead capacity strategy can be used to preempt competitors who might be planning to expand their own capacity.
• B)A lag capacity strategy tends to have greater productivity due to higher utilization levels.
• C)A match capacity strategy tends to avoid periods of high under- or overutilization.
• D)A lag capacity strategy would be well-suited for a period of high growth.

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Definitions:

Finance Lease Agreement

A lease in which the lessee has control over the asset being leased and substantially all risks and rewards incidental to ownership, even though legal title may not be transferred.

Residual Value

The estimated amount that an entity would currently obtain from disposal of the asset, after deducting the estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Implicit Interest Rate

An interest rate inferred from the cost of borrowing, or the return on investment, that is not explicitly stated.

AASB 16

The Australian Accounting Standards Board standard on leases, which outlines the principles for recognition, measurement, presentation, and disclosure of leases.