When Considering a Project That Will Require Production Using Otherwise

question 142

Multiple Choice

When considering a project that will require production using otherwise idle resources, which of the following are true?

• A) Avoidable fixed costs are irrelevant.
• B) Only the variable costs of the project are relevant.
• C) Only financial factors should be considered.
• D) The project should not be undertaken if total revenue from the project is less than the total costs of production.
• E) In the short run, even if revenue is less than the total costs of production, the project could help the company's overall operating income.

Understand the analogy between business strategy and strategy in a game of poker as outlined by Carr.

Differentiate between various categories of marginally ethical negotiating tactics.

Comprehend the purpose behind using marginally ethical ambiguous negotiating tactics.

Identify the risks associated with frequent use of the self-serving process in negotiations.

---

Definitions:

Continuous

A term describing processes or functions that proceed without interruption or cessation.

Dividends in Arrears

Unpaid dividends on cumulative preferred stock that must be paid out before any dividends can be distributed to common stockholders.

Cumulative Preferred Stock

A type of preferred stock that entitles the holder to receive dividends in arrears before common stockholders can receive any dividends.

Liability

Any financial obligation or debt that an entity is responsible for paying to another party.