Which of the Following Is the Overarching Principle That a Financial

question 102

Multiple Choice

Which of the following is the overarching principle that a financial manager should follow when making decisions?

• A)Decisions should generate the greatest benefits for the firm.
• B)Decisions should provide benefit to the firm without incurring costs greater than those benefits to others.
• C)Decisions should be on behalf of the firm's owners that give the greatest benefit to those owners,the firm's employees,and the firm's other stakeholders.
• D)Decisions should increase the value of the firm to its investors.
• E)Decisions should be in the strategic competitive interests of the firm.

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Definitions:

Depreciation Expense

Depreciation expense is the charge recognized in each accounting period for the cost of an asset's decline in value due to use or obsolescence over time.

Residual Value

The estimated value of an asset at the end of its useful life, relevant in depreciation calculations and lease contracts.

150%-Declining-Balance

A method of accelerated depreciation which computes depreciation expense at 150% of the straight-line rate.

Depreciation

The accounting method of allocating the cost of a tangible or physical asset over its useful life.