Which of the Following Would Not Satisfy the Potential Compensation

question 22

Multiple Choice

Which of the following would not satisfy the potential compensation criterion?

• A)The winners from a policy change could compensate the losers so everyone would be better off.
• B)The policy change was approved by a unanimous vote.
• C)The policy change was a Pareto superior move
• D)The policy change moved from a Pareto optimal position to a non-Pareto optimal position.

---

Definitions:

Net Working Capital

Net working capital, a key indicator of short-term financial strength, is determined by subtracting a firm's current liabilities from its current assets, impacting its ability to meet short-term obligations.

Earnings Before Interest And Taxes

An indicator of a firm's earnings, specifically excluding the costs associated with interest and income taxes.

Depreciation

The accounting process of allocating the cost of tangible assets over their useful lives, reflecting the decrease in value of the asset over time.

Tax Rate

The fiscal share individuals or corporations surrender as tax.