Which of These Assumptions Is Often Realistic for a Firm

question 261

Multiple Choice

Which of these assumptions is often realistic for a firm in the short run?

• A)The firm can vary both the size of its factory and the number of workers it employs.
• B)The firm can vary the size of its factory but not the number of workers it employs.
• C)The firm can vary the number of workers it employs but not the size of its factory.
• D)The firm can vary neither the size of its factory nor the number of workers it employs.

---

Definitions:

Total Assets

The sum of all assets owned by an entity, including both current and non-current assets, representing what the entity owns outright.

Creditor's Point Of View

The perspective of a lender or anyone to whom money is owed, focusing on the borrower's ability to repay the debt and interest.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year’s time or within the operating cycle of the business, whichever is longer.