The Iceberg Principle Suggests That

question 28

Multiple Choice

The iceberg principle suggests that:

• A) most competitors' strategies are not obvious on the surface.
• B) small customers usually have the most hidden profit potential.
• C) conclusions based on summary information are often misleading.
• D) no matter what control procedure is used, most major problems are impossible to detect until it is too late.
• E) None of these is true.

---

Definitions:

Expansion Projects

Initiatives undertaken by a company to increase its capacity, sales, or market reach, typically requiring significant investment.

Accounting Beta Model

A method used in finance to estimate the beta of a company's stock based on its accounting ratios, as opposed to market-based measures.

Return on Equity

A measure of a corporation's profitability, calculated by dividing net income by shareholder equity, indicating how effectively company management is using investments to generate earnings growth.

Stock Market Index

A statistical measure that shows changes in the stock market by tracking a selected set of stocks to represent a particular market or sector.