The Contingency Plan Factor That Affects the Control System Most

question 4

Multiple Choice

The contingency plan factor that affects the control system most is the

• A) technology
• B) flexibility
• C) experience of the management
• D) size of the organization
• E) financial support

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Definitions:

Interest Tax Shield

The decrease in income tax liabilities due to permitted interest expense deductions.

Levered Firm

A corporation that has debt in its capital structure, indicating it uses borrowing (leverage) to finance its operations or expansions.

M&M Proposition I

A principle of financial theory stating that under perfect market conditions, the value of a firm is unaffected by how it is financed.

Liquidation

The process of converting assets into cash or cash equivalents by selling them in the market.