For a Value for the Firm Requires That a Firm

question 3

Multiple Choice

For a value for the firm requires that a firm:

• A)Earns profits for shareholders,then uses these profits to satisfy the interests of other stakeholders.
• B)Creates customer loyalty,that can then be converted into profit through increasing prices.
• C)Creates value for customers,then appropriate some of that value as profit.
• D)Creates value for employees through attractive pay,benefits,and working conditions,then relying upon employees to drive customer satisfaction and,eventually,profits.

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Definitions:

Units Sold

The total quantity of products or goods sold by a company during a specific period.

Relevant Range

The scope of activity levels within which the assumptions about fixed and variable costs in cost-volume-profit analysis remain valid.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating how much contributes to covering fixed costs and profit.

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance premiums.