Why Does Company Profitability Decrease in Direct Proportion to the Payroll

question 45

Multiple Choice

Why does company profitability decrease in direct proportion to the payroll expenses?

• A)Because payroll represents an asset and an income of the business. The higher payroll incomes are, the higher the profitability will be.
• B)Because payroll represents an asset and an income of the business. The lower the payroll expenses are, the higher the profitability will be.
• C)Because payroll represents a liability and an expense of the business. The higher payroll expenses are, the lower the profitability will be.
• D)Because payroll represents a liability and an expense of the business. The lower payroll expenses are, the lower the profitability will be.

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Definitions:

Continuous Random Variable

A variable that can take an infinite number of values within a given range.

Continuous Random Variable

A type of random variable that can take an infinite number of values within a given range, reflecting outcomes of continuous measurements.

Probability Density Function

A function that describes the likelihood of finding a continuous random variable within a particular range of values.

Random Variable

A variable with values that are contingent upon the results of a stochastic event.