Which of the Following Expenses Involves the Working Capital a Company

question 19

Multiple Choice

Which of the following expenses involves the working capital a company needs for operation?

• A) The money required to purchase land in order to set up a plant
• B) The money required to purchase equipment necessary to begin operations
• C) The money required to pay the salary of employees
• D) The money required to acquire a competing firm
• E) The money required to set up the power grid for a new manufacturing plant

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Definitions:

Decreasing Returns

A situation in which the addition of more units of input results in the less-than-proportional increase in output.

High Levels

Refers to quantities or amounts that are considerably above the average or typical range.

Output

The amount of products or services generated by a company, sector, or economic system within a specific timeframe.

Constant Returns

Refers to a situation in production where increasing the inputs by a certain factor results in output increasing by the same factor.