Which of the Following Statements About Decision-Making Is True

question 13

Multiple Choice

Which of the following statements about decision-making is true?

• A) Risk should not be taken into account.
• B) Objectives should be quantitative and not qualitative.
• C) Managers often do not have a clear understanding of the real source of the problem.
• D) Sunk costs should usually be taken into account.

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing the asset's consumption or wear and tear over time.

Interest Paid

The cost incurred for borrowing money, typically expressed as a percentage of the principal, payable to the lender.

Net Working Capital

The gap between an organization's present assets and its current debts, highlighting the business's short-term financial well-being and effectiveness in its operations.

Non-Eligible Dividends

Dividends that are paid out from earnings that have not been taxed at the corporate level, often subject to different tax treatment at the recipient's level.