Which of the Following Factors Is Most Important in Investment

question 50

Multiple Choice

Which of the following factors is most important in investment decisions?

• A) The change in earnings before taxes.
• B) The change in gross sales revenue.
• C) The change in net income.
• D) The change in after-tax cash flow.

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Definitions:

Marginal Revenue

The enhanced income derived from peddling an additional unit of a product or service.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a good or service, a critical factor in economic decision-making.

Predatory Pricing

Practice of pricing to drive current competitors out of business and to discourage new entrants in a market so that a firm can enjoy higher future profits.

Antitrust Laws

Legislation designed to regulate the conduct of businesses to promote fair competition for the benefit of consumers, preventing monopolies and practices that restrict trade.