Which of the Following Statements Best Describes the Impact of Recent

question 275

Multiple Choice

Which of the following statements best describes the impact of recent advances in information technology on business location decisions?

• A) Advances in information technology give firms a greater incentive to locate near big cities, because that is where they can take full advantage of these advances.
• B) Western states tend to benefit the most from improvements in information technology, because most states in this region have invested heavily in Internet technology.
• C) Advances in information technology will have no real effect on location decisions.
• D) Advances in information technology will give firms more flexibility in their location decisions by reducing the need to locate close to sources of labor.

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Definitions:

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell shares of a stock at a specified price within a given time period.

Warrants

Options issued by a company that give the holder the right to purchase the company's stock at a specified price before a certain date.

Diluted Earnings

Earnings per share calculated by including the effects of all potential dilutive securities, which could decrease earnings per share by increasing the number of shares outstanding.

Potential Dilutive Effect

The possible impact on a company’s earnings per share if convertible securities were converted into common stock, often considered in financial analysis.