Why Is It Dangerous to Justify Capacity Expansion Using Economies

question 10

Multiple Choice

Why is it dangerous to justify capacity expansion using economies of scale?

• A)It is far too specific to use as a basis for capacity decisions
• B)Because volume,capacity,and process considerations are looked at individually
• C)Because the common notion that unit costs decline for larger facilities due to size is not always accurate
• D)It requires consideration of quality,dependability,and flexibility

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Definitions:

U.S. Tax Liability

The total amount of tax owed to the United States government, including federal, state, and local taxes.

Foreign Tax Credit

A tax credit that reduces the tax liability of an individual or entity for certain taxes paid to foreign governments.

Form 1116

A tax document used to claim foreign tax credit that reduces double taxation by the United States on income earned abroad.

Passive Income

Income earned from rental property, limited partnerships, or other enterprises in which a person is not actively involved.