Which of the Following Is an Example of Stakeholder Interest

question 70

Multiple Choice

Which of the following is an example of stakeholder interest theory?

• A) A company decides to continue operations in its unprofitable factory for the benefit of its employees.
• B) A leather company minimizes its toxic output to counter complaints of environmental damage from local residents.
• C) A company decides to increase the price of its products in order to maximize the profit for its shareholders.
• D) A company donates 20 percent of its quarterly profits to flood victims in another country.

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold, before deducting overhead, payroll, taxation, and interest payments.

Ending Inventory

The aggregate value of products on hand for selling when an accounting cycle concludes.

Gross Profit

The difference between revenues and the cost of goods sold before deduction of operating expenses, interest, and taxes.

Ending Inventory

The value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.