How do we know if expansion is a good idea for the firm?
What will be an ideal response?
Answer: We compare a firm's value with expansion to its value without expansion to find whether expansion is a good idea or not.
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Hamilton Laundry purchased $7,000 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $1,000 on hand. The adjusting entry that should be made by the company on June 30 is
A. debit supplies Expense and credit Supplies for $6,000 B. debit Supplies Expense and credit Supplies for $1,000 C. debit Supplies and credit Supplies Expense for $1,000 D. debit Supplies and credit Supplies Expense for $6,000
If a business wants to maintain growth in a maturing industry, which of the following should be considered?
a. Moving operations offshore b. Reducing the workforce c. Product diversification d. Purchasing new equipment