Which of the Following Is Not an Example of an External

question 92

Multiple Choice

Which of the following is not an example of an external failure cost?

• A) Accepting company liability resulting from product failure.
• B) Experiencing decreasing sales as a result of poor-quality products.
• C) Repairing or replacing defective products after they've been sold.
• D) Testing products in use at the customer's site.

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Definitions:

Growth Determinant

A factor that is critical to the expansion of a company or economy, such as technology, capital, and human resources.

Retained Earnings

Profits that a company chooses not to distribute as dividends but instead reinvests into the business or uses to pay off debt, reflecting the accumulated surplus from business operations.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, usually expressed as a percentage.

Profit Margin

A measure of profitability calculated as net income divided by revenue.