A Firm That Provides Tax Services to the Public Intends

question 72

Multiple Choice

A firm that provides tax services to the public intends to offer a premium tax-return service at a higher price than their current services. The managers of the company ask experts in marketing to determine how much an effective ad campaign for such a service would cost, and by how much sales would be increased. They consult experts in economics to calculate the increases in revenue from the success of the campaign, experts in operations to determine the cost of offering the service, and experts in strategy to anticipate possible countermoves by competitors. This example illustrates which of the following points about the role of financial managers?

• A) Determining the costs associated with making a decision is easier than determining the potential benefits of the decision.
• B) Real-world decisions are complex and require information from many sources if the decisions are to be valid.
• C) All of the costs and benefits associated with a decision can never be fully identified.
• D) Ultimately the decision whether to take a certain course of action rests with the financial managers of a company.

---

Definitions:

Modernization Theory

A perspective that suggests societies progress linearly from traditional to modern states, focusing on economic and technological development.

Technological Change

The innovation or development in technology, significantly altering the way society functions or individuals interact.

Plastic Water Bottles

Containers made from plastic materials used for holding and carrying water; often criticized for their environmental impact.

Environmental Problem

An issue arising from human activities or natural processes that negatively impacts the natural environment, leading to ecological imbalance or degradation.