When Decision Making Is Decentralised

question 54

Multiple Choice

When decision making is decentralised:

• A) Decision-making authority is delegated throughout the organisation
• B) The important information in an organisation is very general
• C) Upper management does not make decisions
• D) Organisations are less likely to experience agency costs concerning goal congruence

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Definitions:

Interest Rate

The amount charged by lenders to borrowers for the use of assets, expressed as a percentage of the principal.

ROE

Return on Equity (ROE) is a financial ratio that measures the profitability of a company in relation to the equity of its shareholders.

Operating Break-Even

The point at which a company's total revenues equal its total operating expenses, indicating no net profit or loss.

EBIT

Earnings Before Interest and Taxes; a company's profit before deducting interest expenses and income taxes.