High Tech Corp

question 66

Multiple Choice

High Tech Corp.cut its research and development budget in 2010 by $4,000,000 in order to improve its cash flow for the year.Which of the following statements is MOST correct?

• A) The stock price will likely increase because the value of stock is based on reported cash flow.
• B) The stock price may decrease because investors may predict that future cash flows will decrease due to the lack of innovation and new products.
• C) The change will have no impact on stock price because the company's profits will not change in 2010.
• D) The stock price will increase only if reported profits in 2010 are higher than profits reported in 2009.

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Definitions:

Inclusive Fitness Theory

A concept in evolutionary biology proposing that an organism's genetic success is derived not only from personal reproduction but also from supporting the reproduction of relatives.

Eusociality

A high level of organization in social animals characterized by cooperative brood care, division of labor, and overlapping generations within a colony.

Social Behavior

Interactions among individuals of the same species that influence the behavior of one another, often vital for survival and reproduction.

Fitness Benefits

Advantages conferred to individuals that contribute to their survival and reproductive success in a given environment.