When Management Selects Production Technologies That Include a High Proportion

question 80

Multiple Choice

When management selects production technologies that include a high proportion of fixed costs,it:

• A) decreases the DOL.
• B) increases the DOL.
• C) decreases the NPV-breakeven level of sales.
• D) reduces the NPV of the cash flows.

---

Definitions:

Recoverable Amount

The estimated amount that can be recovered from an asset's sale or use, typically higher than its net book value.

Canadian GAAP

Generally Accepted Accounting Principles in Canada, a set of standards for financial reporting and accounting.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for preparing financial statements.

Fair Value Accounting

An accounting approach where companies measure and report the value of certain assets and liabilities on a fair value basis.