Which Three of the Following Are Major Flaws in Earnings-

question 16

Multiple Choice

Which three of the following are major flaws in earnings- based management?

• A) It ignores the riskiness of earnings.
• B) It assumes that shareholder value can only be determined in terms of earnings.
• C) It ignores the time value of money.
• D) Profit figures are subjective, and thus open to manipulation and distortion.

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Definitions:

Sesamoid Bone

A small, round bone embedded within a tendon; its primary function is to protect tendons and increase their mechanical advantage.

Shoulder

The region where the arm joins the torso, consisting of several joints and an ensemble of muscles and tendons that provide motion and stability.

Articulations

Joints or the points where two bones meet, allowing for a variety of movements.

Increase in Angle

Increase in angle refers to the widening or opening of the angle between two intersecting lines or surfaces.