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Which Three of the Following Are Major Flaws in Earnings-

Question 16

Multiple Choice

Which three of the following are major flaws in earnings- based management?


A) It ignores the riskiness of earnings.
B) It assumes that shareholder value can only be determined in terms of earnings.
C) It ignores the time value of money.
D) Profit figures are subjective, and thus open to manipulation and distortion.

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