Which of the Following Statements About Debt Is False

question 59

Multiple Choice

Which of the following statements about debt is false?
I.Interest payments reduce the scope for waste by management.
II.Debt creates the possibility of bankruptcy.
III.Debt increases the tendency of shareholders to take gambles.
IV.Debt reduces the cash flows that go to government.

• A) I
• B) II
• C) III
• D) IV
• E) None of the statements are false.

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Definitions:

Superego

A component of Freud's psychoanalytic theory representing the ethical and moral dimensions of personality, internalizing societal standards of right and wrong.

Social-Cognitive Perspective

A psychological approach that emphasizes the role of cognitive processes in understanding social behavior.

Inner Traits

Characteristic qualities or attributes that make up an individual’s personality, often considered to be internal and stable.

Situational Influences

External factors in the environment that affect individual behavior, decision-making, and attitudes in specific contexts.