Which of the Following Statements Is Correct

question 13

Multiple Choice

Which of the following statements is correct?

• A) If the profit-maximizing rule is fulfilled,it necessarily follows that the cost-minimization rule is being fulfilled.
• B) The profit-maximizing and the cost-minimizing rules are such that the fulfilling of one has no bearing on the fulfilling of the other.
• C) If the profit-maximizing rule is fulfilled,the cost-minimization rule may or may not be fulfilled.
• D) If the cost-minimization rule is fulfilled,it necessarily follows that the profit-maximizing rule is being fulfilled.

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Definitions:

Corridor

A method used in pension accounting to amortize certain actuarial gains and losses over time.

Unrecognized Loss

A loss that has occurred but has not yet been reported in the financial statements because it has not been realized through a transaction.

Amortization

A process of spreading out a loan's cost over its lifespan, reducing the value of an intangible asset or debt over a specified period.

Projected Benefit Obligation

An estimate of the total amount of benefits to be paid out to employees in a defined benefit pension plan, based on current and future salary levels.