According to the Survey of Senior Managers by Graham,Harvey,and Rajgopal,senior

question 26

Multiple Choice

According to the survey of senior managers by Graham,Harvey,and Rajgopal,senior managers admitted to the following:
I.adjusting their firms' operations and investments in order to manage earnings;
II.decreasing discretionary spending in R&D,advertising,or maintenance to meet earnings targets;
III.deferring or rejecting investment projects with positive NPVs in order to meet earnings targets

• A)I only
• B)II only
• C)I and II only
• D)I,II,and III

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Definitions:

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing total liabilities by total assets.

Profit Margin

Profit margin is a financial metric that measures the percentage of profit a company retains after subtracting its costs from its revenue, reflecting the overall profitability of the business.

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by stockholder's equity, illustrating the degree of financial leverage used.

Times-Interest-Earned (TIE) Ratio

Determined by dividing earnings before interest and taxes by the interest charges. This ratio measures the extent to which operating income can decline before the firm is unable to meet its annual interest costs.