According to Tobin's Q Theory,the Principal Objective of Investment Is

question 42

Multiple Choice

According to Tobin's q theory,the principal objective of investment is ________.

• A)to increase eligibility for the investment tax credit
• B)to expand production
• C)to increase the market value of the firm
• D)to lower the replacement cost of installed capital

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Definitions:

Current-Period Income

The net income earned by a business during the most recent accounting period.

Accrual Accounting

An accounting method where transactions are recorded when they are earned or incurred, not necessarily when cash changes hands, providing a more accurate financial picture.

Expense Recognition

A principle in accounting that dictates when costs are recognized as expenses in the financial statements, often aligned with the revenue they helped to generate.

Cash Basis

An accounting method where revenues and expenses are recorded when cash is received or paid, not when the obligation is incurred.