The Mere Fact That a Firm Is Earning High Rates

question 65

Multiple Choice

The mere fact that a firm is earning high rates of return on its asset indicates that

• A) the firm is worth more as a going concern than as a dead one.
• B) downsizing is likely to be an economically sound option for the business.
• C) it is time to start growing the business again.
• D) it might be wise to further limit the cash flows returned to investors.

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