Which of the Following Is True of Contract Manufacturing

question 1

Multiple Choice

Which of the following is true of contract manufacturing?

• A) It enhances a firm's in-house capabilities.
• B) It allows firms to meet the scale of market demand by committing to long-term capital investments.
• C) It enables a firm to tap the greater economies of scale.
• D) It decreases organizational responsiveness to the environment.

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Definitions:

Degree-Of-Risk Tolerance

The level of variability in investment returns that an investor is willing to withstand in their investment portfolio.

Risk Aversion

The preference to avoid uncertainty in investment decisions, showing a tendency to prefer safer investments over riskier ones.

Capital Gains Tax

The tax on the profit made from the sale of a non-inventory asset when the sale price exceeds the purchase price.

Tax Shelter

An investment vehicle that allows individuals or businesses to reduce or avoid taxes, legally through various deductions and credits.