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Scenario 9.1 Colette University, an Institute of Higher Learning That Educates Confectionery

question 39

Multiple Choice

Scenario 9.1
Colette University, an institute of higher learning that educates confectionery chefs, offers a very attractive benefits package.Costs associated with the benefits are about double those of rival institutions.However, the university's administrators feel thatextensive benefits attract the most talented faculty and staff in the world.Due to recent societal trends in fitness and health, Colette University has experienced a downturn in its funding support from global confectionery corporations seeing lower profits.The university's budget is adversely impacted.Joy, the human resource manager of the university, has been asked to find ways to reduce expenditures on benefits so that important university programs do not suffer.
-Refer to Scenario 9.1.Joy is considering to implement a benefits plan in which employees of the university will be asked to choose benefits that best suit their individual needs.Which of the following benefits plans is Joe planning to implement?

Definitions:

Financial Leverage

The degree to which a company uses fixed-income securities such as debt and preferred equity in its capital structure.

Tax-Deductible Interest

Interest on loans that can be subtracted from one's taxable income, thereby reducing the overall tax liability.

Earnings Per Share

A company's net profit divided by the number of its outstanding shares, indicating the profitability on a per-share basis.

Cost Of Debt

The effective rate that a company pays on its total debt, acting as a measure of the risk and cost of borrowing capital.