A Manufacturing Firm Is Planning on Expanding Its Existing Operations

question 15

Multiple Choice

A manufacturing firm is planning on expanding its existing operations. The expansion project is significant and will require the firm to house the expansion in a different location. The firm is considering building on a lot they own across town. The lot is currently vacant and it was paid for nearly 20 years ago. Given this information, which of the following statements is correct?

• A) The lot is not an incremental cash flow because it is not being utilized at this time.
• B) The lot is an incremental cash flow because it represents an opportunity cost.
• C) The lot is an incremental cash flow because it represents a sunk cost.
• D) The lot is not an incremental cash flow because it has already been paid for.

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Definitions:

Lateral Meristems

A type of plant tissue found in the stems and roots of plants, responsible for growth in diameter or thickness.

Sclerenchyma Tissue

A type of plant tissue characterized by thick, tough cell walls that provide structural support and protection.

Apical Meristems

Regions of rapidly dividing cells at the tips of roots and shoots, where most plant growth occurs.

Vascular Cambium

A layer of growth tissue in plants that produces new phloem and xylem cells, contributing to stem and root thickness.