Isidore Security Services Is a National Provider of Guard and Security

question 76

Multiple Choice

Isidore Security Services is a national provider of guard and security services for businesses. It has been in business for over 90 years,having been founded by one of Teddy Roosevelt's Rough Riders (Isidore O'Malley) . Lately it has been losing clients to more aggressive and innovative firms offering remote security monitoring systems instead of a guard-based approach. The board of directors of Isidore Security Services is concerned that this downward trend may threaten the existence of this venerable firm and the jobs of its employees.

• A)This is an example of an established firm neglecting the opportunity-seeking aspect of strategic entrepreneurship.
• B)This example shows the dysfunctional aspects of unrestricted entrepreneurialism.
• C)This is an example of the lack of human capital hampering internal innovation.
• D)Isidore Security Services is suffering from the "novelty effect" wherein new firms are more attractive to clients/customers merely because they are new and not because they add value.

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Definitions:

Permanent Differences

Permanent differences are disparities between taxable income and accounting income that arise from certain transactions and events, which will not reverse in the future.

Deferred Tax Assets

Future tax benefits arising from situations where the amount of taxes paid on financial statements exceeds the amount owed for tax purposes, which can be used to reduce future tax liability.

Deferred Tax Liabilities

Deferred tax liabilities are taxes that have been accrued but will not be paid for until a future date, typically due to timing differences between accounting and tax laws.

Effective Tax Rates

The average percentage at which an individual or corporation is taxed.