Entrepreneurs Mostly Focus on a Single Number: Profits

question 179

Multiple Choice

Entrepreneurs mostly focus on a single number: profits. As a result, which of the following statements tends to be true about their firms?

• A) The firms tend to do well in some aspects of their operations, but other aspects are neglected.
• B) The firms cannot achieve a very high overall efficiency.
• C) The firms pay close attention to every aspect of their operations.
• D) The firms' suppliers and customers are often left behind.

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Definitions:

Nominal Rate

The advertised or stated interest rate of an investment or loan, not accounting for compounding or inflation.

Endowment

An endowment is a financial asset, in the form of money or property, donated to institutions or individuals, typically used for a specific purpose like a scholarship fund.

Per Month

A phrase indicating a recurring event or a calculation basis occurring every month.

Perpetual Preferred Share

A type of preferred stock that has no fixed maturity date, potentially offering dividends indefinitely.