Which of the Following Decisions Does a Firm Need to Make

question 129

Multiple Choice

Which of the following decisions does a firm need to make as soon as it has identified the activities from the value chain that are bringing the highest added value to their customers?

• A)Target high value-adding activities to further enhance their value.
• B)Target low value-adding activities to increase their value.
• C)Perform some combination of the two.
• D)All of the above.

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Definitions:

Rate of Return

The gain or loss on an investment over a specific period, expressed as a percentage of the investment's initial cost.

Debt Ratings

Assessments provided by rating agencies that evaluate the creditworthiness of debt issuers and their financial instruments.

Default Risk

Default risk is the chance that a borrower will be unable to make the required payments on their debt obligations.

Interest Rate Risk

The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and maturity risk.