Positive Externalities Are Created When

question 17

Multiple Choice

Positive externalities are created when

• A) other consumers reduce their demand for coffee and price thereby declines.
• B) farmers spray pesticide in their fields and it washes into the local river after the first rainstorm.
• C) your neighbor plants beautiful trees and flowers in her yard.
• D) you purchase the "Mona Lisa" and lock it in a vault.

Evaluate the benefits of reducing collection and disbursement times.

Understand the operational costs associated with maintaining cash balances and executing transactions.

Determine the net benefits of implementing financial management tools and strategies.

Understand the concept of homeostasis and its role in motivation.

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Definitions:

Financial Risk

The possibility of losing money on an investment or business venture due to various financial factors.

ROE

Return on Equity; a financial ratio indicating the profitability of a company by comparing net income to shareholders' equity.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability excluding interest and income tax expenses.

Total Leverage

The combined effect of using both operating leverage and financial leverage on a company's earnings before interest and taxes (EBIT).