A Negative Feature of Defining Investment by EXCLUDING the Portion

question 62

Multiple Choice

A negative feature of defining investment by EXCLUDING the portion of total assets employed that are financed by short-term creditors is that:

• A)current liabilities are sometimes difficult to define
• B)short-term debt is always more expensive to finance than long-term debt
• C)this method encourages managers to use an excessive amount of short-term debt
• D)this method encourages managers to use an excessive amount of long-term debt

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Definitions:

Measure Area

The process of determining the size of a specific space or surface, often for planning or construction purposes.

Pie Graphs

Pie graphs, also known as pie charts, are circular statistical graphics divided into slices to illustrate numerical proportion.

Grouped Bar Graphs

A graphical representation used in statistics, where multiple bar graphs are placed side by side for comparison across different categories or groups.

Compare Aspects

To examine the similarities or differences between two or more elements or facets.