Hector Is a Research Scientist in the Field of Optics

question 11

Multiple Choice

Hector is a research scientist in the field of optics at TransOptic, Inc. His employer is in the middle of a series of acquisitions of other firms noted for innovations in optics. These acquisitions are expensive, and other areas of the firm have experienced budget reductions.

• A) Hector's future is secure, as TransOptic is obviously committed to innovations in optics.
• B) Hector should be concerned, as excessive acquisitions often cause a firm to neglect internal R&D.
• C) This policy of cooperation with other cutting edge optical companies will enhance Hector's opportunities to innovate.
• D) Organic growth such as this tends to erode the organization's ability to innovate internally. Hector would be wise to move to another firm.

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Definitions:

Financial Statement

An official documentation detailing the fiscal transactions and status of a company, individual, or another entity.

Retention Ratio

The portion of net income that is retained by a corporation rather than distributed to its shareholders as dividends.

EBIT

Profit measurement called Earnings Before Interest and Taxes, which encompasses all of a business's expenditures apart from interest and taxes.

Tax Rate

The portion of financial income that lawmakers decree as taxable for corporations or individuals.