A Financial Goal of the Firm Is to

question 15

Multiple Choice

A financial goal of the firm is to

• A) accept projects that have negative NPVs.
• B) accept all projects that can be funded internally.
• C) accept projects that have a cost of capital greater than the IRR.
• D) none of the above

---

Definitions:

Diseconomies of Scale

Increases in cost per unit when output increases, often due to inefficiencies that arise with too large an operation.

Monopolistic Competition

A market structure characterized by many firms selling differentiated products with no perfect substitutes, allowing for some degree of market power.

Product Variety

Refers to the assortment of different goods and services that a company offers to meet consumer demands.

Underallocation of Resources

A situation where resources are not being used efficiently or optimally, resulting in missed opportunities for economic or social benefits.