Which of the Following Is NOT TRUE About Theories

question 98

Multiple Choice

Which of the following is NOT TRUE about theories?

• A) They are a way of looking at the world.
• B) They are a way of making sense of the relationships between variables.
• C) They are what separates description from explanation.
• D) They allow us to establish causality.
• E) They are always provable.

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital from operating income, used as a measure of profitability.

Margin

Margin refers to the difference between the selling price of a good or service and its cost of production, usually expressed as a percentage of the selling price.

Return On Investment

A gauge of an investment's profit, expressed as the return percentage in comparison to the cost of the investment.

Residual Income

Residual income is the profit remaining after deducting all required costs of capital from operating income.