Which of the Following Factors Favors the Use of More

question 93

Multiple Choice

Which of the following factors favors the use of more debt in a company's financial structure?

• A) High levels of taxable income
• B) Low levels of taxable income
• C) The business is basically risky with unpredictable cash flows.
• D) Risk of bankruptcy would make customers reluctant to buy the company's products.

---

Definitions:

Centralized Business

An organizational structure where decision-making and key processes are managed at the highest levels or from a single central location or headquarters.

Operating Decisions

Choices made by management regarding daily operations of a business that affect its efficiency and effectiveness.

Top Management

The highest level of management in an organization, responsible for making strategic decisions.

Decentralization

The distribution of decision-making powers from central authority to individuals or units at lower levels within an organization or state.