The East Coast University Uses a Printing Machine, the FL200

question 6

Multiple Choice

The East Coast University uses a printing machine, the FL200, to print exam papers. According to the operation manual, FL200 can prints 2000 sets of exam papers per hour when it is operating at peak efficiency. However, Edgo Liew, the head printer, notes that in normal (but still efficient) operations, the machine can produce only 1800 sets of exam papers in an hour. Further, Edgo also notes that given the small number of students enrolled in the East Coast University, the machine is never required to print more than 1500 sets of exam papers per hour.
The theoretical capacity of the FL200 is:

• A) 2000 sets of exam papers per hour.
• B) 1800 sets of exam papers per hour.
• C) 1500 sets of exam papers per hour.
• D) 500 sets of exam papers per hour.

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Definitions:

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the compilation of financial statements in the U.S.

Lessee

The party in a lease agreement who rents or leases property from the lessor.

Lease as Asset

An agreement where a lessee gains the right to use an asset for a specified period in exchange for payment, recognized as an asset on the lessee's balance sheet under certain conditions.

Purchase Option

A clause in a contract that allows one party to purchase goods or assets from the other party at a predetermined price within a specified timeframe.