Which One of the Following Actions by a Financial Manager

question 245

Multiple Choice

Which one of the following actions by a financial manager is most aligned with the goal of financial management?

• A) Increasing the size of a firm by acquiring a non-profitable competitor.
• B) Increasing the sales of the firm by expanding the company's sales force.
• C) Issuing additional shares of stock to repay all of the firm's long-term debt.
• D) Improving the efficiency of the company such that the value of the stock increases.
• E) Increasing the bonuses paid to the top executives as the size of the firm increases.

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Definitions:

Discretionary Cost

A cost that is not essential for the operation of a business and can be adjusted or eliminated without directly impacting the immediate viability of the business.

Furniture Manufacturing

The industrial process of producing furniture items, combining various materials such as wood, metal, and textiles.

Advertising

The activity or profession of producing advertisements for commercial products or services, aimed at influencing the buying behavior of consumers.

Cost Driver

A factor that causes the cost of an activity or process to change, such as labor hours or machine hours.