Which of the Following Statements Is Correct

question 232

Multiple Choice

Which of the following statements is correct?

• A) A firm does not need to take into account its sunk cost when making current decisions.
• B) Long-run decisions are easily reversed.
• C) Short-run decisions are not easily reversed.
• D) In the long run, a firm can change its plant but not the quantity of its labor.

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholders, typically from profits, in the form of cash.

Retained Earnings

The portion of a company's profits that is kept or retained within the company, rather than being paid out as dividends to shareholders.

Shareholders Equity

The residual interest in the assets of a company after liabilities are deducted, effectively the net worth attributable to shareholders.

Treasury Stock

Represents shares that were issued but have been bought back by the issuing company, reducing the amount of outstanding stock on the market.