When corporate managers reduce investment spending,long-run profitability is likely to increase.

Question

Quizplus · Accepted Answer

Reducing investment spending may lead to short-term cost savings, but it can also hinder long-term growth and profitability. By investing in research and development, new technology, and expanding operations, a company can potentially increase revenue and profits in the future. Therefore, reducing investment spending does not necessarily lead to long-term profitability.

When Corporate Managers Reduce Investment Spending,long-Run Profitability Is Likely to Increase