What Is an Advantage of Providing Benefits Instead of Cash

question 36

Multiple Choice

What is an advantage of providing benefits instead of cash compensation?

• A) It is simpler to pay compensation in benefits than in cash.
• B) Benefits give greater control to employees over cash compensation.
• C) All companies that provide benefits become eligible for tax breaks by state and federal agencies.
• D) Younger employees place more importance on benefits than cash compensation.
• E) Employers can assemble creative benefits packages that give them a competitive advantage.

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Definitions:

Fixed Costs

Costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

EBIT

Earnings Before Interest and Taxes, also known as EBIT, is a way to evaluate a company's profit without considering tax and interest expenses.

Financial Risk

The likelihood of experiencing a loss of money in a business operation or investment.

EBIT

A financial metric, Earnings Before Interest and Taxes, calculates a business's income by including all earnings and expenditures with the exception of those from interest and taxes.