Which of the Following Correctly Completes This Sentence: All Else

question 221

Multiple Choice

Which of the following correctly completes this sentence: All else the same, _____________.

• A) The business risk of a firm increases when it takes on a risky project.
• B) The business risk of a firm increases when it takes on more debt.
• C) The financial risk of a firm decreases when it takes on a risky project.
• D) The financial risk of a firm increases when it takes on more equity.
• E) The higher the business risk for a firm, the higher the financial risk as well.

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Definitions:

Governmental Fund Types

Types of funds used by governmental entities to account for their financial resources, including general, special revenue, debt service, capital projects, and permanent funds.

Modified Approach

Modified Approach is a method in governmental accounting allowing certain assets to be reported at historical cost, exempt from the regular depreciation accounting if they are maintained at predefined condition levels.

Infrastructure Assets

Long-term physical assets that are critical for providing public services, including roads, bridges, and water supply systems.

Maintenance Costs

Expenses incurred to keep an asset in working order or restore it to proper condition; does not improve upon the original asset.