GM Decides to Build a New Plant Using Retained Earnings

question 57

Multiple Choice

GM decides to build a new plant using retained earnings. All of the following are true except

• A) GM's tangible capital will increase as a result.
• B) GM is engaging in saving on behalf of its shareholders.
• C) GM stock appreciates in value.
• D) GM is avoiding experiencing opportunity costs.

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Definitions:

Working Papers

Working Papers refer to documents, notes, and other materials created or used by auditors, accountants, or lawyers during the course of their professional activities.

Performing an Audit

The process of examining an organization's financial records to ensure accuracy and compliance with accounting standards and regulations.

Public Company Accounting Oversight Board

A nonprofit corporation established by Congress to oversee the audits of public companies to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.

SEC

The U.S. Securities and Exchange Commission, a federal agency responsible for enforcing federal securities laws and regulating the nation's securities industry.