When Making Long Term Plans, Any Increases in ________ and ________

question 66

Multiple Choice

When making long term plans, any increases in ________ and ________ reflect capital structure decisions that require managers to actively raise capital.

• A) debt, equity
• B) debt, assets
• C) assets, equity
• D) current ratio, equity

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Definitions:

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than its competitors, leading to more efficient trade benefits.

Opportunity Cost

The forfeiting of possible gains that could be obtained from exploring other options, when one is chosen.

Absolute Advantage

The capacity for a nation, person, corporation, or area to manufacture a product or render a service at a more affordable per-unit expense than what any other party can achieve.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than other entities, leading to specialized production and trade benefits.