Samantha and Josephine Were Preparing to Start Their Own Clothing

question 51

Multiple Choice

Samantha and Josephine were preparing to start their own clothing business; they contacted their friend David, a recent graduate from Big State University's accounting program, to learn about setting up their accounting information system. Which of the following questions should David ask them as part of Step 1 of Steps for Better Thinking?

• A)What is your budget for developing the AIS?
• B)Which is more important to you: cost or quality?
• C)Either A or B
• D)Neither A nor B

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Definitions:

Market

An area or arena in which commercial dealings are conducted, often defined by the exchange of goods, services, or information between buyers and sellers.

Required Rate of Return

The minimum expected yield by investors to compensate for the risk of holding a particular investment.

Beta

An indicator of how much the risk of a security or a portfolio, known as systematic risk, fluctuates in relation to the overall market.

Expected Rate of Return

This refers to the anticipated gain or loss of an investment, expressed as a percentage of the investment's initial cost.