A Passive Investment Is One in Which the Owner

question 33

Multiple Choice

A passive investment is one in which the owner

• A)is not attempting to exert influence over the company.
• B)owns between 15-25% of the company's outstanding stock.
• C)uses the equity method of accounting for the investment.
• D)is gradually attempting to gain control over the company.

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Definitions:

Labor Productivity

A measure of economic performance calculated by dividing the output of goods and services by the labor hours devoted to the production of that output.

Controllable Margin

The portion of profit or income generated by a business or department that can be directly controlled or influenced by management decisions.

Performance Evaluation

The process of assessing the performance of an employee, a department, or an organization against set objectives or criteria.

Profit Centers

Divisions or departments within an organization that are responsible for generating its income.