Which of the Following Actions-All Else Equal-Will Increase a Firm's

question 50

Multiple Choice

Which of the following actions-all else equal-will increase a firm's EVA?

• A)The firm raises its prices but ships the same amount of product.
• B)The firm increases its inventory.
• C)The firm increases its borrowing to repurchase some of its shares.
• D)The firm increases its accounts receivable.

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Definitions:

Government Surplus

The situation where a government's revenue exceeds its expenditures during a given timeframe, indicating a positive fiscal balance.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulation of financial institutions, and stability of the financial system.

Excessive Investment

When the level of investment in an economy exceeds what is considered sustainable or optimal, potentially leading to economic imbalances.

Inflationary Recessions

Uncommon scenarios where an economy experiences both inflation—rising prices—and recession, which is a significant decline in economic activity, simultaneously.