Which One of the Following Statements Is TRUE

question 10

Multiple Choice

Which one of the following statements is TRUE?

• A) A manager not closing a factory that is losing money but which is in his hometown is an example of a manager-shareholder conflict.
• B) Management is said to be entrenched when the senior managers are consuming excessive perquisites
• C) A company's matching contribution to a retirement plan is a nonpecuniary benefit.
• D) Company sponsorship of a local charity is an example of a nonpecuniary benefit.
• E) A manager/shareholder agency conflict arises when shareholders sell their stock even though management says the stock is undervalued.

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Definitions:

Capacity Utilization Rate

A measure of how efficiently a firm or economy is using its productive capacity, often expressed as a percentage of total potential output.

Full Capacity

The maximum level of output that a company can produce and supply under normal conditions.

Production Possibilities Curve

A graphical representation that shows the maximum quantity of goods and services that a society can produce given its resource and technology constraints.

World War II

A global military conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, eventually forming two opposing military alliances: the Allies and the Axis.