Reference: Ref 20-2 (Table: Rawls's Maximin) Refer to the Table

question 44

Multiple Choice

Reference: Ref 20-2 (Table: Rawls's Maximin) Refer to the table. According to the maximin principle, which of the societies is ranked lowest?

• A) A
• B) C
• C) D
• D) All societies are ranked equally.

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Definitions:

Cost of Capital

The rate of return that a company must pay to its capital providers, including both equity and debt holders, for using their capital in the business.

Financing Pressure

The stress or difficulty a company faces in securing funds to finance its operations or expand its business.

Liquidity

The extent to which an asset or security can be quickly bought or sold in the market without affecting its price.

Payback Period

The number of years it takes a firm to recover its project investment. Payback does not capture a project’s entire cash flow stream and is thus not the preferred evaluation method. Note, however, that the payback does measure a project’s liquidity, and hence many firms use it as a risk measure.