Which of the Following Firms Should Concentrate Its Production in a Centralized

question 76

Multiple Choice

Which of the following firms should concentrate its production in a centralized location?

• A)Jupiter Inc.operates in an industry where the fixed costs are high and services of supporting industries are of prime importance.
• B)Star Goal Inc.manufactures consumer products like processed food,apparel,and cosmetics for which national differences in consumer taste and preference are wide.
• C)Uranious Inc.operates in an economy where volatile fluctuations in exchange rates are frequently expected.
• D)Earth Ventures Inc.is a mining company that exports iron ore-a product with low value-to-weight ratio-to various countries.
• E)Silver Times Inc.customizes heavy machines without the use of flexible manufacturing technologies.

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Definitions:

Cash Flow Recovery

The process of regaining the cash that was used in investments or incurring costs, often evaluated in terms of investment payback period or returns.

Net Working Capital

A comparison of a company's short-term assets versus its short-term obligations, indicating its fiscal health in the immediate future.

Capital Cost Allowance (CCA)

A taxable expense in Canadian tax law that represents a yearly deduction for the depreciation of property used in a business or profession.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be converted to cash in the near-term.