Which of the Following Statements Is CORRECT

question 18

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:

General Mills

An American multinational manufacturer and marketer of branded consumer foods sold through retail stores.

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A methodical approach to developing marketing strategies that align with business goals, involving analysis, implementation, and monitoring.

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A procedure for evaluating and choosing among alternatives in a thoughtful manner based on values and ethical principles.

AMA Code of Ethics

is a guideline set by the American Marketing Association outlining professional ethical norms and behaviors for marketers, promoting integrity and fairness.