Large-Scale Investment Projects That Lead to Excess Capacity and Integration

question 23

Multiple Choice

Large-scale investment projects that lead to excess capacity and integration problems that create cost overruns and control problems are examples of

• A)diseconomies of scale.
• B)economies of scale.
• C)economies of scope.
• D)diseconomies of scope.
• E)constant returns to scale.

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Definitions:

Assets

Resources owned or controlled by a company or individual with the expectation that they will provide future benefit.

Accounting Equation

A fundamental financial principle representing the relationship between a company's assets, liabilities, and shareholder's equity: Assets = Liabilities + Equity.

Increase Assets

An augmentation in the total value or amount of economic resources owned or controlled by an entity.

Increase Liabilities

An action that results in a rise in the obligations or debts of a company, affecting the company's financial position.