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:

Organ Donors

Individuals who offer their organs or tissues for transplantation to another person in need, either during their lifetime or after death.

Driver's Licenses

Official documents permitting an individual to operate one or more types of motorized vehicles on public roads.

Presumed Consent

A policy where individuals are assumed to have agreed to organ donation upon their death unless they have explicitly opted out.

Organ Shortage

The critical lack of available organs compared to the number of patients in need of organ transplants, posing a significant challenge to healthcare systems worldwide.