Why is the personal decision a financial manager makes as to whether to buy or to rent an apartment as a personal residence most like the professional decision that manager makes as to whether her firm should try to acquire a stake in a fast growing new Internet-based company?
A)Both decisions involve the purchase of assets.
B)Both decisions will be made based on what provides the greatest long-term benefit.
C)Both decisions are vital to the financial health of the decision maker.
D)Both decisions should be made based upon the tradeoff benefits and costs across time.

Question

Quizplus · Accepted Answer

Both decisions involve weighing the benefits and costs over time. In the case of buying or renting an apartment, the financial manager must consider the costs of purchasing versus renting, as well as the potential long-term benefits of owning a property. Similarly, in the case of acquiring a stake in a fast-growing company, the financial manager must consider the potential benefits of the investment versus the costs and potential risks involved. Both decisions require careful analysis of the tradeoffs between benefits and costs over time.

Why Is the Personal Decision a Financial Manager Makes as to Whether