An Ethical Dilemma That Comes Up When a Company Uses

question 41

Multiple Choice

An ethical dilemma that comes up when a company uses sales agents to sell its products comes into play when the agents sell so much of the product that the company decides to:

• A)decrease the retail price of the products
• B)fire the agent and use an in-house sales staff without giving the agent any commissions on renewal or repeat business the agent established
• C)give the sales agents a larger margin on the products they sell
• D)hire those sales agents in as in-house salespeople for the company
• E)ask the sales agents to codify the sales process they go through to routinize best practices for selling to certain market segments

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Definitions:

Vertical Analysis

A financial analysis method that compares various line items in a company's financial statements over a single period, expressing each item as a percentage of a base amount to assess relative size and structure.

Comparative Financial Statements

Financial statements that present financial information for different periods or dates side by side to facilitate comparison.

Corporations

Are legal entities that are separate and distinct from their owners. They have the ability to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes.

Vertical Analysis

A method of financial statement analysis in which each entry is listed as a percentage of another item, typically used for income statements where entries are compared to total sales.