Your Friend and Former College Roommate,David,has Just Been Hired to Manage

question 14

Multiple Choice

Your friend and former college roommate,David,has just been hired to manage a small,family-owned business because the owner has fallen ill,and none of his children are yet ready to assume leadership of the business.David has hiring and firing authority (except for the owner's children) ,and wants to expand and diversify the sales staff,by hiring women and persons of color.There are 3 openings.What would be your best advice to him to accomplish his goals?

• A)David should hire the only qualified women and/or persons of color, in order to achieve diversity
• B)David should prepare an affirmative action plan, after doing a self-analysis which establishes an underutilization of women and persons of color in the relevant labor market, and then advertise the open positions
• C)David should hire the first qualified candidates he finds, regardless of gender or race
• D)none of these would be good advice

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Definitions:

Debt Financing

The method of raising capital through the sale of bonds, bills, or notes to individuals or institutions.

Interest Tax Shield

The reduction in income taxes that results from taking the interest expense as a deductible charge.

Capital Structure

The capital structure is the mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which funds its overall operations and growth.

Tax Rates

The segment of earnings an individual or corporate entity owes to the government in taxes.