A Local Playground Equipment Company Plans to Operate Out of Its

question 238

Multiple Choice

A local playground equipment company plans to operate out of its current factory, which is estimated to last 30 years. All cost decisions it makes during the 30-year period

• A)are long-run decisions.
• B)are short-run decisions.
• C)involve only maintenance of the factory.
• D)are zero because the cost decisions were made at the beginning of the business.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and efficiency in managing its operational needs.

Capital Commitment

The amount of capital a company is obligated to spend over a period, typically for investment in long-term assets or projects.

Operating Activities

Business activities directly related to the production and delivery of goods and services, which generate revenue for a company.

Inventory Policies

Guidelines or strategies used by a company to maintain optimal inventory levels and manage its inventory costs.