Diego Owns and Operates a Small Business with Only Four

question 90

Multiple Choice

Diego owns and operates a small business with only four full-time employees and less than $700,000 in annual sales. He currently uses a manual accounting system and relies on a part-time bookkeeper to keep his records in order. In evaluating the possible adoption of a computerized accounting system, Diego will probably discover that

• A) the expense of setting up a computerized accounting system would not be affordable at this time.
• B) he would be better off hiring a full-time accountant.
• C) he could benefit from adopting such a system, but should also consult with an accountant for advice about what's best.
• D) a computerized system would be affordable, but that he would have little need for it unless his company became significantly larger.

---

Definitions:

Yld%

A financial metric typically used to refer to the yield percentage of a bond, indicating the return investors can expect to earn if they hold the bond until maturity.

EPS Growth Rate

The rate at which a company's earnings per share (EPS) are expected to grow over a certain period of time.

Rate of Return

The increase or decrease in the value of an investment during a specified time frame, shown as a percentage of the investment's original price.

Expected Dividend

The forecasted payment of dividends to shareholders based on the company's past dividends and future earnings projections.