Which of the Following Is Not a Financing Decision

question 10

Multiple Choice

Which of the following is not a financing decision?

• A) Should the firm borrow money from a bank or sell bonds?
• B) Should the firm shut down an unprofitable factory?
• C) Should the firm buy or lease a new machine that it is committed to acquiring?
• D) Should the firm issue preferred stock or common stock?

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good that consumers are willing and able to purchase at various prices.

Gasoline

A volatile, flammable liquid derived from petroleum, used primarily as fuel in internal combustion engines.

Demand Curve

A chart that illustrates how the quantity of a product demanded by customers correlates with its price.

Normal Good

A product whose demand increases when people's incomes increase, and falls when incomes decrease, all else being equal.