Which of the Following Is True of How Managers May

question 32

Multiple Choice

Which of the following is true of how managers may differ from shareholders?

• A)Managers can diversify the risks more easily.
• B)Managers are more likely to pursue projects with high potential payoffs.
• C)Managers diversify investments more easily.
• D)Managers are less averse to risk.
• E)Managers are likely to prefer more emphasis on uncertain incentives than base pay.

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Definitions:

Cash Inflows

Money being received by a business or individual, from various sources like sales, investments, or loans.

Option To Wait

The flexibility embedded in investment decisions allowing investors to delay making an investment to obtain more information.

Net Income

The amount of profit left after all operating expenses, taxes, and interest are deducted from total revenue.

Variable Cost

Expenses that are directly linked to the scale of production activity.