Financial Managers Evaluating Decision Alternatives or Potential Actions Must Consider

question 108

Multiple Choice

Financial managers evaluating decision alternatives or potential actions must consider

• A) only risk.
• B) only return.
• C) both risk and return.
• D) risk, return, and the impact on share price.

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Definitions:

Unrealized Gains

Increases in the value of an investment that have not been realized through a sale and thus are not reflected in the entity's income.

Goodwill

An intangible asset representing the excess value of a business beyond its physical assets and liabilities, often arising from brand reputation, customer relationships, or intellectual property.

Net Assets

The total assets of a company after deducting its total liabilities, representing the owners' equity in the company.

Common Shares

Equities representing ownership interests in a company, entitling holders to a share in the company's profits and voting rights in certain decisions.