According to the Theory of Constraints, Which of the Following

question 100

Multiple Choice

According to the theory of constraints, which of the following is an operational measurement that can be used to measure the firm's ability to make money?

• A) Net profit
• B) Throughput
• C) Return on investment
• D) Sales
• E) Direct labor hours

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Definitions:

Limited Liability

A form of legal protection for shareholders and owners that limits their losses to the amount of investment in the company, protecting personal assets from company debts and liabilities.

Double Taxation

Double Taxation is a tax principle referring to income taxes being paid twice on the same source of earned income. It can occur when income is taxed at both the corporate level and personal level, or in two different countries.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders; it has rights and liabilities independent of those owners and can enter into contracts, sue, and be sued.

Sole Proprietorships

A business structure where a single individual owns and operates the business, bearing full responsibility for its debts and obligations.