Which of the Following Statements Is TRUE

question 46

Multiple Choice

Which of the following statements is TRUE?

• A)The only cash flows that an investor will receive until he or she sells their shares will be the dividends.
• B)A firm's residual earnings technically belong to the preferred shareholders.
• C)Corporations generally pay all their earnings as dividends.
• D)Corporations typically reinvest none of their earnings to enhance future earnings.

Develop skills in using sensitivity, scenario, and simulation analyses to evaluate the risk and potential outcomes of business decisions.

Comprehend the principles and applications of net present value (NPV) and internal rate of return (IRR) in capital budgeting.

Learn how depreciation affects accounting and financial calculations and decisions.

Understand the concept of capital rationing and its two types: soft and hard rationing.

---

Definitions:

Mnemonic

A technique used to assist in remembering information, typically involving patterns, phrases, or associations.

Method of Loci

A mnemonic device that involves imagining placing items that need to be remembered in specific locations within a familiar place.

Information Processing

A psychological approach that describes the human mind’s activities as akin to the processing of data, involving input, storage, and retrieval of information.

Acquisition of Memory

The initial stage of learning or memorizing new information, where the brain encodes and stores data for future use.