Which of the Following Is the Overarching Principal That a Financial

question 20

Multiple Choice

Which of the following is the overarching principal that a financial manager should follow when making decisions?

• A)Decisions should generate the greatest benefits for the firm.
• B)Decisions should provide benefit to the firm without incurring costs greater than those benefits to others.
• C)Decisions should be on behalf of the firm's owners that give the greatest benefit to those owners,the firm's employees and the firm's other stakeholders.
• D)Decisions should increase the value of the firm to its investors.

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Definitions:

Activity Level

The volume of production or the degree of services provided by a business, which can impact the behavior of costs and is critical in budgeting and planning.

Product Costs

Direct and indirect costs associated with producing a product, including materials, labor, and overhead expenses.

Inventoriable Costs

Costs associated with the purchase or production of goods that are considered assets when incurred and expensed as the goods are sold.

Period Costs

Expenses that are not directly tied to the production of goods and are instead allocated to the time period in which they are incurred.