The Reason McDonald's Uses Franchising Is To

question 102

Multiple Choice

The reason McDonald's uses franchising is to:

• A)decentralize operations.
• B)lower bureaucratic costs.
• C)increase transaction costs.
• D)outsource operations.

---

Definitions:

Project Initial Outlay

The initial investment amount required to start a project, typically including costs such as equipment, installation, and initial operating expenses.

Break-Even Quantity

The amount of product that must be sold to cover the costs of production, resulting in neither a profit nor a loss.

Operating Cash Flow

The amount of cash generated by a company's normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Variable Cost

Costs that vary directly with the level of production or volume of output, such as materials and labor.