A One-Time-Only Special Order Decision

question 120

Multiple Choice

A one-time-only special order decision

• A)should consider only long-term costs and benefits.
• B)must still consider short-term and long-term costs and benefits.
• C)allows a company to sell products at prices which only cover fixed costs.
• D)should consider only short-term costs and benefits.
• E)should only be undertaken if there is idle capacity.

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Definitions:

Insurance

Insurance is a financial product that provides protection against potential future losses or damages in exchange for a premium payment.

Tax-Oriented Lease

A lease structured in such a way that the lessor can claim tax benefits, such as depreciation and tax credits.

Financial Lease

A type of lease where the lessee pays for an asset over a period of time, and at the end of the lease term the asset typically becomes the lessee's property.

Lessor

The entity in a lease agreement that possesses the asset and allows the lessee to utilize the asset in return for payments of rent.