A Factory That Relies on Highly Technical Machinery May Choose

question 8

Multiple Choice

A factory that relies on highly technical machinery may choose to reduce its overall leverage position by

• A) selling its machinery.
• B) increasing its accounts receivable.
• C) utilizing a higher level of equity.
• D) decreasing their variable costs per unit.

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Definitions:

Odds

The ratio that reflects the likelihood of a particular event happening versus it not happening, often used in gambling and statistics.

Annual Return

The percentage change in an investment's value over a one-year period, including dividends, interests, and capital gains.

Investment

The allocation of resources, usually financial, in something to earn a return or gain profit.

Equal Alternatives

A situation or choice where the options available have the same value or likelihood.