In 2008, Precision Pattern Interiors, Which Makes High-End Aircraft Interiors

question 372

Multiple Choice

In 2008, Precision Pattern Interiors, which makes high-end aircraft interiors, began a $1 million renovation of a building at the Hutchinson Air Base Industrial Tract south of Yoder, Kansas. The company will also add some $400,000 in new equipment and triple its Yoder work force. Which of Precision Pattern Interiors' decisions is a long run decision?

• A) $1 million renovation of a building at the Hutchinson Air Base Industrial Tract and $400,000 in new equipment purchases
• B) $1 million renovation of a building at the Hutchinson Air Base Industrial Tract
• C) $400,000 in new equipment purchases
• D) triple its Yoder work force

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Definitions:

Economic Profit

The contrast between earnings from outputs sold and the opportunity cost of using specific inputs.

Interest Rate

The proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the outstanding loan.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of assets, expressed as an annual percentage of the principal.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.