Which of the Statements Below Is TRUE

question 17

Multiple Choice

Which of the statements below is TRUE?

• A)The investment decision,although minor in comparison to the financing decision,is still an important consideration.
• B)The financing decision,although minor in comparison to the investing decision,is still an important consideration.
• C)The financing decision is minor in comparison to the investing decision and thus can be ignored.
• D)The financing and investing decisions are equally important in terms of determining firm value.

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Definitions:

Clean Air

The condition of the atmosphere when it is free from pollutants, contaminants, and other harmful substances.

Network Externality

The effect that an additional user of a good or service has on the value of that product to others, often increasing the utility as more people use it.

Elastic

Refers to the responsiveness of the quantity demanded or supplied of a good to a change in its price.

Inelastic

Describes a situation where a change in the price of a good or service has a relatively small effect on the quantity demanded or supplied.