Why Should Long-Run Objectives Take Precedence Over Short-Run Objectives

question 50

Multiple Choice

Why should long-run objectives take precedence over short-run objectives?

• A) Focus is placed on improving performance in the near-term.
• B) Long-run objectives are necessary for achieving long-term performance and block focus on short-term results and put the company in a position to perform better later.
• C) To satisfy shareholder expectations for progress.
• D) Forces the company to consider what to do now to perform better later.
• E) None of these.

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Definitions:

Financing Cost

The total expense incurred to finance a purchase or project, including interest, fees, and other charges associated with borrowing money.

Optimal Amount

The quantity of a good or service that achieves the best outcome under given conditions, such as maximizing profit or utility.

Research And Development

The investigative activities that a business or government entity undertakes with the intention of making a discovery that can either lead to the development of new products or procedures, or to the improvement of existing products or procedures.