The ____ Ratio Is Based on the Principle That a High-Risk

question 168

Multiple Choice

The ____ ratio is based on the principle that a high-risk investment should generate higher financial returns for a business and more conservative decisions often generate lesser returns.

• A) return on owners' equity
• B) risk-return
• C) earnings
• D) investment-to-equity
• E) quick return

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Definitions:

Employee Shirking

Refers to employees putting in less effort than agreed upon or expected, often when they believe their lack of effort will not be noticed or punished.

Specialization

The process of focusing on and becoming expert in a particular area of production or knowledge to increase efficiency.

Falling Costs

A situation where the expenses associated with producing a good or service decrease, often leading to lower prices for consumers.

Economies of Scale

The cost advantage that arises with increased output of a product, where average costs start to fall as production scales up.