Choosing the Appropriate Level of Capacity

question 163

Multiple Choice

Choosing the appropriate level of capacity:

• A)may lead to idle capacity if underestimated.
• B)is a key strategic decision.
• C)may lead to loss of sales if overestimated.
• D)All of these answers are correct.

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Definitions:

Deficit

The amount by which expenses exceed income or liabilities exceed assets.

Dividend Yield Ratio

An indicator of the yearly dividends paid by a corporation as a proportion of its stock price.

Dividends Per Share

The total dividends declared by a corporation for each outstanding share of common stock, reflecting the distribution of earnings to shareholders.

Market Price

The current price at which an asset or service can be bought or sold on the open market.