[The Following Information Applies to the Questions Displayed Below

question 26

Multiple Choice

[The following information applies to the questions displayed below.]
Creative Star Corporation produces three lines of desks from wood: Classic,Royal,and Standard.Cost and revenue data pertaining to each product are shown below:
Classic desks require five square yards of wood,Royal requires ten square yards,and Standard requires three square yards.High demand for each product line far exceeds the company's production capacity.
-If Creative Star Corporation has an unlimited supply of wood available,which products should it produce?

• A)Royal only.
• B)Classic and Royal.
• C)Royal and Standard.
• D)Classic only.

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Definitions:

Equity Securities

Financial instruments like stocks that represent ownership interest in a company or rights to acquire such an interest.

Insignificant Influence

A situation where an investor does not have enough impact on a business to affect its decisions or policies.

Dividend Revenue

Income received from owning shares in a company which distributes a portion of its earnings to its shareholders.

Insignificant Influence

A term describing an investor's lack of power to affect the operating and financial policies of the investee company.