What Is the Most Important Duty of a Firm's Financial

question 39

Multiple Choice

What is the most important duty of a firm's financial officer?

• A) to ensure that the firm has enough cash on hand to meet its commitments at any given time
• B) to decide how to pay for investments
• C) to manage working capital
• D) to make investment decisions

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Definitions:

Variable Manufacturing Overhead

The portion of manufacturing overhead costs that varies with production volume.

Opportunity Cost

The value of the best alternative foregone as a result of making a decision, representing the benefit that could have been gained from the next best choice.

Fixed Manufacturing Cost

This refers to the consistent expenses incurred by a company for its manufacturing operations, excluding variable costs; it includes costs like rent, salaries of permanent staff, and depreciation of factory equipment.

Variable Manufacturing Cost

Costs that vary directly with the level of production output, such as raw materials and direct labor.