Which of the Following Statements Is CORRECT

question 21

Multiple Choice

Which of the following statements is CORRECT?

• A) When fixed assets are added in large, discrete units as a company grows, the assumption of constant ratios is more appropriate than if assets are relatively small and can be added in small increments as sales grow.
• B) Firms whose fixed assets are "lumpy" frequently have excess capacity, and this should be accounted for in the financial forecasting process.
• C) For a firm that uses lumpy assets, it is impossible to have small increases in sales without expanding fixed assets.
• D) There are economies of scale in the use of many kinds of assets.When economies occur the ratios are likely to remain constant over time as the size of the firm increases.The Economic Ordering Quantity model for establishing inventory levels demonstrates this relationship.
• E) When we use the AFN equation, we assume that the ratios of assets and liabilities to sales (A₀*/S₀ and L₀*/S₀) vary from year to year in a stable, predictable manner.

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Definitions:

White National Pride

A controversial ideology focusing on national identity and pride within the context of White heritage, which is often associated with racial exclusivity.

Valid Argument

An argument whose conclusion logically follows from its premises, where if the premises are true, the conclusion must also be true.

Affirming the Antecedent

A logical fallacy where it's assumed if the first condition is true, the second must also be true, given the first implies the second.

False Dilemma

A logical fallacy involving a situation in which only limited alternatives are considered, when in fact there is at least one additional option.