What Is the Main Objective of a Company Using the Balance

question 25

Multiple Choice

What is the main objective of a company using the balance sheet approach to determine compensation for expatriate managers?

• A) to ensure that the company does not get stuck with paying the higher costs of living in an overseas location
• B) to adjust the manager's pay downward so total compensation reflects the benefits of getting to travel
• C) to give the manager the same amount of pay as in the home country but in the host country's currency
• D) to give the manager an amount of compensation that enables the company to balance the books
• E) to give the manager the same standard of living plus extra for the inconvenience of moving

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Definitions:

Return

The income produced by an investment, typically expressed as a percentage of the investment’s cost.

Total Assets

The sum of all assets owned by a company, including cash, investments, equipment, and real estate.

Profitability

A measure of how efficiently a company or project generates profit in relation to its revenue or investments.

Times Interest Earned

A financial ratio that measures a company’s ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expenses.