Which Statement Is True

question 40

Multiple Choice

Which statement is true?

• A)Our capacity utilization rate is rarely over 75 percent.
• B)Gross investment is generally negative.
• C)The most important determinant of the level of investment is the expected profit rate.
• D)None is true.

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Definitions:

Incremental Costs

Incremental costs are the additional costs incurred when a business increases its level of operations or production.

Make or Buy

A decision-making process used by companies to determine whether to produce goods in-house or purchase them from an external supplier.

Incremental Costs

Costs that change depending on the level of production or an alternative course of action.

Additional Revenues

Extra income generated from sources outside of the company's main business operations.