The Principle That Should Guide the Financial Manager in Determining

question 24

Multiple Choice

The principle that should guide the financial manager in determining a financing strategy is that:

• A)it is not as easy to add value by making good investment decisions as it is by making good financing decisions.
• B)while it is not easy to add value by making good investment decisions,it is certainly possible to reduce value by making poor investment decisions.
• C)it is not as easy to add value by making good investment decisions as it is by making good financing decisions but it is certainly possible to reduce value by making poor investment decisions.
• D)None of the given options.

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Definitions:

Demographic Transition

A theory describing the transition from high birth and death rates to low birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Per Capita Incomes

The average income earned per person in a given area or country.

Birth Rates

A rephrased: The frequency of live births in a given population, measured as the number of births per 1000 individuals per year.