When Assessing Earnings Persistence It Is Important to Analyze Discretionary

question 53

Multiple Choice

When assessing earnings persistence it is important to analyze discretionary expenditures. Which of the following statements are correct?
I. Research and Development is generally considered a discretionary expenditure
II. Decreased discretionary expenditures should always be taken as a positive indicator that the company is getting costs under control
III. Advertising expenditures can be considered discretionary expenditures, which often have implications for future sales
IV. Absolute levels of discretionary expenditures are more important than the level of expenditures relative to sales

• A) I, II and III
• B) I, III and IV
• C) II, III and IV
• D) I and III

Identify and explain the process of rationalising self-concept discrepancies in the context of maintaining close relationships.

Differentiate active stances people take in response to relationship deterioration.

Recognize factors that herald the end of a relationship according to Levinger.

Understand the concept of prosocial behavior and its various facets.

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Definitions:

Demand-for-loanable-funds

The desire for borrowing money from available financial resources, influenced by the interest rate.

Investment Tax Credit

A tax credit offered to firms or individuals that invest in certain types of assets, aimed at encouraging investment.

Loanable Funds Market

A theoretical market where borrowers and lenders interact, facilitating the lending and borrowing of funds based on interest rates.

Interest Rate

The expense allocated by a creditor to a debtor for the opportunity to use capital, quantified as a proportion of the principal.