Which of the Following Events Best Exemplifies the Concept of Signaling

question 163

Multiple Choice

Which of the following events best exemplifies the concept of signaling?

• A)A college student's parents, having learned that their child is short of money, send her a check for $1,000.
• B)A new company making high quality bicycles at a reasonable price sends free bikes to reviewers working for bicycle magazines.
• C)A grocery store maintains a policy of examining the driver's license of everyone who writes a personal check to purchase his groceries.
• D)A university maintains a policy of considering for admission only those students who graduated among the top 10 percent of their high school class.

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Definitions:

Closing Costs

These are fees and expenses, aside from the price of the property, paid by buyers and sellers when transferring ownership of a property.

Freight-In

The cost of transporting goods into a warehouse or to the buyer, which is typically included in the cost of goods sold.

Component Depreciation

A method of depreciation where different components of a fixed asset, with different useful lives, are depreciated separately.

Land Improvements

Enhancements made to a parcel of land to increase its value or usability, such as landscaping, paving, or installation of utilities, which are typically considered depreciable assets.