For Which of the Following Reasons Would a Business Prefer

question 32

Multiple Choice

For which of the following reasons would a business prefer to own space rather than lease it?

• A)The business demands specialized or unique facilities
• B)Owning allows the business to develop skills in operating,maintaining,and repairing real estate and the associated facilities
• C)Owning reduces operating flexibility
• D)The capital commitments with owning are lower than the capital commitments associated with leasing

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Definitions:

Factory Machinery

Refers to the set of equipment and mechanical devices used in a manufacturing plant to produce goods.

Electricity

A form of energy resulting from the existence of charged particles such as electrons or protons, often used as a power source.

Factory Overhead

All indirect costs associated with manufacturing, apart from direct materials and direct labor costs.

Product Cost

The total cost associated with producing goods, including direct materials, direct labor, and manufacturing overhead.