Refer to the Following Figure for the Questions That Follow

question 26

Multiple Choice

Refer to the following figure for the questions that follow.

-The opportunity cost of increasing production of apple pies from 14 to 16 pies is:

• A) 2 blueberry pies.
• B) 14 apple pies.
• C) 7 blueberry pies.
• D) 4 blueberry pies.
• E) 16 blueberry pies.

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Definitions:

Cash Increase

An uptick in the amount of liquid assets (cash and cash equivalents) that a company or individual has on hand.

Current Ratio

Current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing current assets to current liabilities.

Net Working Capital

Net working capital is the difference between a company's current assets and current liabilities, indicating short-term financial health and the ability to cover its short-term obligations.

Factoring Receivable

The process of selling accounts receivable to a third party at a discount to quickly generate cash.