If the Managers of a Private Firm Perform Poorly,each Owner

question 18

Multiple Choice

If the managers of a private firm perform poorly,each owner has the option of _____

• A)closing down the firm.
• B)selling his or her share of the firm.
• C)managing the firm himself or herself.
• D)not paying any taxes on the little profit he or she receives.
• E)selling off some of the equipment of the firm.

---

Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Capital Stock

The total value of all physical assets owned by a company that are used in producing goods and services.

Interest Rate

The percentage charged or paid for the use of money, typically expressed as an annual rate on loans or earned on deposits.

Investing

Allocating fiscal resources with the foresight of making an income or profit.