A Difficulty with Increasing a Retailer's Return on Net Worth

question 24

Multiple Choice

A difficulty with increasing a retailer's return on net worth through high financial leverage is the ________.

• A) possible loss in sales due to being out-of-stock on desirable merchandise
• B) negative effect on net profit due to high inventory levels
• C) uncertainty of repayment of interest and debt
• D) high costs of stocking inventory

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Definitions:

Preoperational

A developmental stage in Piaget's theory of cognitive development, roughly ages 2 to 7, characterized by symbolic thought and egocentrism, but a lack of logical operations.

Cognitive Development

The study of how thinking, problem-solving, and intelligence evolve as individuals grow, often focusing on childhood development.

Formal Operations

The final stage of cognitive development in Jean Piaget's theory, marked by the ability to think abstractly and to understand hypothetical concepts.

Concrete Operations

A stage in cognitive development, as theorized by Jean Piaget, where children gain the ability to think logically about concrete events.