Arden Insurance's Claims Processing Facility Has Been a Major Employer

question 94

Multiple Choice

Arden Insurance's claims processing facility has been a major employer in the town of Arbor for over 20 years drawing mainly on workers with minimal skills and education. A large telemarketing firm is about to set up its business at Arbor, and it is planning to employ low-skilled workers. Which of the following statements is true in this case?

• A) As Arden and the marketing firm belong to different industries, the impact on Arden's workforce will be minimal since workers rarely switch between industries.
• B) The trained workforce will not leave even if the telemarketing firm offers higher pay than Arden.
• C) If Arden cannot offer higher wages, it needs to make sure that its current employees are satisfied with the intangible aspects of their jobs in order to retain them.
• D) Workers in small towns tend to be loyal to their employers hence, Arden's current employees are likely to stay with Arden.

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Definitions:

Debt Ratio

A financial metric that assesses a firm's level of indebtedness by dividing its total liabilities by its total assets.

Equity Multiplier

A financial leverage ratio that measures the portion of a company's assets that are financed by stockholders' equity.

Net Income

The company's net earnings following the subtraction of all costs and taxes from its income.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets, calculated as current assets divided by current liabilities.