Make It Better, Inc

question 165

True/False

Make it Better, Inc. is a large insurance company in the Midwest. Make it Better made its corporate philanthropy public when it announced 3% of its profits would be donated toward the cultural and environmental concerns of Des Moines, the home of Make it Better's corporate headquarters. The CEO stated, "In honor of several hundred employees that come to work here every day, we want to give something back." Since this is only helping one metropolitan area, the donation falls outside the realm of corporate social responsibility.

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Definitions:

Variable Cost Ratio

The proportion of variable costs to total sales, indicating how variable costs change with sales levels.

Bond Issue

The process by which a borrower issues bonds to raise funds from investors willing to lend them money for a certain period.

Operating Leverage (DOL)

Operating leverage measures how revenue growth translates into growth in operating income. It is a measure of how sensitive the operating income is to the change in revenues.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.