Effective Capacity Is The

question 232

Multiple Choice

Effective capacity is the:

• A) maximum output of a system in a given period.
• B) capacity a firm expects to achieve given the current operating constraints.
• C) average output that can be achieved under ideal conditions.
• D) minimum usable capacity of a particular facility.
• E) sum of all of the organization's inputs.

---

Definitions:

Current Liabilities

Debts or obligations that are due to be paid within one year or within the normal operating cycle of the business, whichever is longer.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Rate of Return on Investment

A measure of the profitability and efficiency of an investment, calculated by dividing the investment's gain by its cost.

Owners' Equity

refers to the owner's interest in the assets of a business after all liabilities have been deducted.