An Increase in Total Assets Can Be Financed by an Increase

question 89

Multiple Choice

An increase in total assets can be financed by an increase in which of the following capital components:

• A) debt
• B) preferred stock
• C) common equity
• D) All of the above

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Definitions:

Marginal Product

The additional output that is produced as a result of using one more unit of a particular input, such as labor or capital, while keeping other inputs constant.

Wage

The compensation paid to an employee for their labor, usually expressed as an hourly, daily, or weekly rate.

Profit

The financial gain obtained when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Marginal Product

The additional output that results from using one more unit of a particular input while keeping other inputs constant.