Public Agencies Are Limited in Their Ability to Run Operations

question 16

Multiple Choice

Public agencies are limited in their ability to run operations like a like a business because they must

• A)serve broader social interests.
• B)adhere to strict accounting principles.
• C)respond to Republican interests.
• D)distribute public resources to the most affluent taxpayers.
• E)none of the above.

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Definitions:

Breakeven Volume

The number of units that must be sold at a given price to cover all costs, with no profit or loss.

Variable Costs

Costs that change in proportion to the level of output or activity in a business.

Fixed Costs

Rent, salaries, and insurance charges are examples of expenses that are unaffected by changes in production or sales volumes.

EBIT-EPS Analysis

A tool used to study the effect of financing alternatives on a company's earnings per share and taxes.