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Norma-Jean [14]
2 years ago
14

Which one of the following is an example of a "flexibility" option? Group of answer choicesA company has an option to close down

an operation if it turns out to be unprofitable. A company agrees to pay more to build a plant in order to be able to change the plant's inputs and/or outputs at a later date if conditions change. A company invests in a project today to gain knowledge that may enable it to expand into different markets at a later date. A company invests in a jet aircraft so that its CEO, who must travel frequently, can arrive for distant meetings feeling less tired than if he had to fly commercial. A company has an option to invest in a project today or to wait a year. Next
Business
1 answer:
mixas84 [53]2 years ago
3 0

Answer:

A company agrees to pay more to build a plant in order to be able to change the plant's inputs and/or outputs at a later date if conditions change.

Explanation:

Real option analysis

This is simply described as a form of an analysis of capital budgeting projects. It is often used by managers so as to influence the size and riskiness of a project's cash flows. And this can be done only by taking different actions or at the end of the project's life.

It uses the usual NPV capital budgeting analysis along with an analysis of opportunities as a result of manager's responses to changing circumstances that can change a project's outcome.

Examples of Real Options

1. Investment timing

2. Abandonment/shutdown

3. Flexibility

4. Growth/expansion

Flexibility Option

This type of re option simply allows operations to be changed based on how conditions change during a project's life. It is said to exists when it is useful spending money today, which therefore helps one to maintain flexibility down the line. That is, either inputs or outputs (or both) can be altered.

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MCZ, Inc. is a corporation that was incorporated under the laws of the State of New Jersey. MCZ, Inc. has only one office which
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True maybee not sure
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3 years ago
The optimal level of difficulty of a goal Question 18 options: occurs only when employees set their own goals. occurs when the g
Dennis_Churaev [7]

Answer:

occurs when the goal is challenging but not impossible.

Explanation:

A goal can be defined as the desire to meet specific targets over a period of time.

Generally, there are different types of goals and these includes;

1. Short-term goal: this type of goal are usually actualized (achieved) in a week, months or within a year.

2. Intrapersonal goal: a goal that is personal and fixed. This type of goal is peculiar to an individual and might include an action plan or desire to stop a behavior, start a task, improve on an aspect of your life, etc.

3. Normative goal: it's dependent on the achievement of others. It is typically based on an evaluative standard.

4. Long-term goal: it's to be achieved in the distant future. This type of goal are usually in a long period of time such as five (years) and more.

The optimal level of difficulty of a goal occurs when the goal is challenging but not impossible.

4 0
3 years ago
Which of the following accounting strategies (for financial reporting purposes) is the least likely for a firm that is currently
jeyben [28]

Using straight-line depreciation.

Changing to FIFO

Using the weighted average method for capitalizing interest during times of reduced interest rates, rather than the specific method.

Changing to the successful efforts method of accounting for natural resource exploration costs.

Changing to the successful efforts method of accounting for natural resource exploration costs.

<u>Explanation:</u>

The particular technique initially underwrites the enthusiasm on explicit obligation. With financing costs on the decay, enthusiasm on lower rate obligation is promoted and more is expensed, comparative with the weighted normal technique, which underwrites at the normal rate over all obligation.

The weighted normal strategy would underwrite more enthusiasm on more established (higher loan cost) obligation, in this way diminishing the present measure of premium cost and expanding income. Expanding profit lessens the danger of rebelliousness for this firm.

4 0
3 years ago
FAB Corporation will need 200,000 Canadian dollars (C$) in 90 days to cover a payable position. Currently, a 90-day call option
fgiga [73]

Answer:

$144,000

Explanation:

Calculation to determine net amount paid, assuming FAB wishes to minimize its cost

Net amount: ($.71 + $.01) x 200,000

Net amount = $144,000.

Therefore net amount paid, assuming FAB wishes to minimize its cost is $144000

7 0
3 years ago
Match the following statements to the appropriate terms.
steposvetlana [31]

Answer:

Production Cost Report;Cost Reconciliation schedule,Equivalent units of Production;Unit Production Costs;Physical Units

Explanation:

Production Cost Report:A summary of both production quantity and cost data for a production department.

Cost Reconciliation schedule:Shows that the total costs accounted for equal the total costs to be accounted for.

Equivalent units of Production:Work done during a period expressed in fully completed units.

Unit Production Costs: Costs expressed in terms of equivalent units of production.

Physical Units:Actual units to be accounted for during a period, irrespective of any work performed.

Total Units Accounted for:Units transferred out during the period plus units in ending work in process.

Total manufacturing cost per unit:Unit materials costs plus unit conversion costs.

Units Transferred out:Total units accounted for minus units in ending work in process.

7 0
3 years ago
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