In Making a Short- Term Decision, Which of the Following

question 83

Multiple Choice

In making a short- term decision, which of the following is MOST important?

• A)Focus on the bottom line profit
• B)Focus on total costs
• C)Separate variable costs from fixed costs
• D)Use a conventional absorption costing approach

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Definitions:

Total Assets

The sum of all current and non-current assets owned by an entity as reported on the balance sheet.

EBIT

Earnings Before Interest and Taxes; a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Debt/Assets Ratio

A financial ratio that indicates the proportion of a company's assets that are financed by debt.

Common Equity

The amount of ownership interest that is common stockholders have in a company, reflecting their equity stake.