Which of the Following Is True of Outsourcing

question 34

Multiple Choice

Which of the following is true of outsourcing?

• A) It involves significantly less transaction costs.
• B) It is a way to meet market demand with a long-term capital commitment.
• C) It is a great way for a company to develop in-house manufacturing capabilities.
• D) It carries a risk of proprietary technology being expropriated by the contract manufacturer.

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Definitions:

External Users

Individuals or entities outside a company, such as investors, creditors, regulators, and customers, who use the company's financial information to make decisions.

Accounting

The systematic process of recording, measuring, and communicating financial information about economic entities.

Recording

The act of documenting financial transactions in the books of accounts as part of the accounting process.