In 2008, Precision Pattern Interiors, which makes high-end aircraft interiors, began a $1 million renovation of a building at the Hutchinson Air Base Industrial Tract south of Yoder, Kansas. The company will also add some $400,000 in new equipment and triple its Yoder work force. Why would the long run decisions be riskier than the short run decisions?
A) Because the firm has to live with the long run decisions for a long time
B) Because it is easier to sell the equipment than it is to lay off employees
C) Because the firm has to raise prices to purchase equipment
D) Because employees will be upset

Question

Quizplus · Accepted Answer

Long run decisions have a greater impact and are more difficult to reverse or change, so they require more careful consideration and analysis. The firm has to live with the consequences of its decisions for a longer period of time, making them riskier than short run decisions.

In 2008, Precision Pattern Interiors, Which Makes High-End Aircraft Interiors