The Major Goal of Social Regulation Is

question 146

Multiple Choice

The major goal of social regulation is

• A) a better quality of life through a less polluted environment, better working conditions, and safer and better products.
• B) to make sure that firms are not earning monopoly profits.
• C) to make sure that prices are kept low enough so that every person can purchase the good.
• D) to make sure that the firm produces at the socially optimal point of production.

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Definitions:

Average Accounting Return Rule

A capital budgeting criterion that measures the profitability of an investment as the average net income divided by the average book value.

Profitability Index Rule

A capital budgeting technique used to decide whether to invest in a project, calculated as the present value of future cash flows divided by the initial investment cost.

Capital Budgeting Technique

Methods used by companies to evaluate and select investments in long-term assets based on their potential to generate cash flows in the future.

Profitability Index

A financial metric used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment.