Which of the Following Statements Concerning Profitability and Profit Growth

question 16

Multiple Choice

Which of the following statements concerning profitability and profit growth is NOT true?

• A) Attaining future profit growth may require investments that reduce the current rate of profitability.
• B) Managers must find the right balance between profitability and profit growth.
• C) Too much emphasis on current profitability at the expense of profit growth can make an enterprise less attractive to shareholders.
• D) Satisfying the claims of other key stakeholder groups happens at the risk of decreased profitability and profit growth.
• E) Too much emphasis on profit growth can reduce profitability and make an enterprise less attractive to shareholders.

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Definitions:

John Maynard Keynes

A British economist whose theories on the causes of prolonged unemployment and the importance of governmental fiscal and monetary policies founded Keynesian economics.

Federal Budget Deficit

The shortfall that occurs when the U.S. government's expenditures exceed its revenues within a fiscal year.

GDP

Gross Domestic Product, or GDP, represents the overall market value of all ultimate goods and services manufactured domestically in a specific timeframe.

Interest Rates

The cost of borrowing money or the return on investment for savings, usually expressed as a percentage of the total amount loaned or deposited.