Suppose That a Company Hires Recent College Graduates for Two

question 217

Multiple Choice

Suppose that a company hires recent college graduates for two types of jobs, sales people and credit analysts. The hours worked and skill levels are the same for both positions. The sales people get to travel to several desirable locations, whereas the credit analysts do not leave the home office. When comparing the salaries of the two positions, it is likely that the company pays the

• A)sales people less as a compensating differential.
• B)credit analysts less as a compensating differential.
• C)same salary for both positions because they require the same skill level.
• D)same salary for both positions because it would be illegal to do otherwise.

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Definitions:

Straight-Line Depreciation

A formula for distributing the cost of a tangible asset over its period of usability in consistent annual sums.

Production Line

A sequence of operations that assembles or manufactures products in a factory.

Expansion Option

An option within a project that allows for expansion, scaling up production or operations, if the initial phase is successful, often evaluated in capital budgeting.

Initial Cost

This is the amount required to start a project or investment, often encompassing purchase price, setup fees, and other initial expenses.