A Valuable Asset Pledged to Assure Loan Payments and Subject

question 64

Multiple Choice

A valuable asset pledged to assure loan payments and subject to seizure upon default is called:

• A) capacity.
• B) character.
• C) capital.
• D) collateral.
• E) conditions.

Analyze the effect of dividend payout policies on retained earnings and need for external financing.

Calculate the normal time for given operations based on observed times and performance ratings.

Determine the standard time for operations when factoring in constant and variable allowances.

Recompute standard times with adjusted allowances to understand the impact of changing allowance values.

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Definitions:

Economies of Scale

The price benefits that firms enjoy from the magnitude of their operations, where the cost of each output unit generally lessens as the scale of operations increases.

Unit Costs

The financial outlay for a company to manufacture, warehouse, and dispose of one unit of a specific item or service.

Output

Represents the total amount of goods or services produced by a firm or economy in a specific period.

Minimum Efficient Scale

The smallest level of production a firm can achieve while still taking full advantage of economies of scale in terms of cost per unit.