Examlex

Solved

Explain What Is Meant by the Margin of Safety and How

question 53

Essay

Explain what is meant by the margin of safety and how it is used by managers.


Definitions:

Risk

The possibility of loss, damage, or any other undesirable event.

Return

The profit or loss derived from an investment over a particular period, expressed either in percentage or absolute terms.

Tradeoff

A decision situation that involves diminishing or losing one quality, quantity, or property of a set or design in return for gains in other aspects.

Standard Deviation

A measure of the dispersion or variability in a set of data points, indicating how much the observations differ from the mean of the data set.

Related Questions