In Order to Attract Investors and Borrow on Favorable Terms

question 2

Multiple Choice

In order to attract investors and borrow on favorable terms, a company would use ________ in times when inventory costs are rising.

• A)LIFO
• B)FIFO
• C)average costing
• D)specific-identification costing

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Definitions:

Divestiture

Getting rid of a business unit. The reverse of an acquisition.

High Debt

A situation where an individual or organization carries a heavy financial obligation, often measured relative to income or assets, which can lead to increased risk and financial strain.

Proxy Fight

A fight for control of a corporation when two or more interests compete for the proxies of shareholders in the election of directors.

Shareholders

Individuals or institutions that own share(s) in a corporation, thereby having a claim on its profits and assets.