You Use $40,000 of Your Own Money to Start a Catering

question 182

Multiple Choice

You use $40,000 of your own money to start a catering business. During the first year you earn a 5% return on that investment. If the current interest rate on savings is 8%, you earn an economic profit of

• A) -$1,200.
• B) $1,200.
• C) $2,000.
• D) $3,200.

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Definitions:

Span of Control

The number of direct reports that a supervisor or manager can effectively manage.

Optimum Span

The ideal range or limit within which a specific condition or variable yields the best performance or outcome.

Management Overhead

Represents the costs associated with administrative and management functions that are not directly related to production or service delivery.

Tall Structure

An organization structure that has narrow spans of control and many hierarchical levels.