One of the Largest Consulting Firms in the World Prefers

question 50

Multiple Choice

One of the largest consulting firms in the world prefers to hire many entry-level consultants and then retain only about 10 percent by the third year. This strategy allows them to become acquainted with many workers and keep only the best. On the basis of this strategy, the firm pays below-market salaries. Which of the following is NOT a likely outcome of paying below-market rates?

• A) It may encourage voluntary turnover.
• B) It is less costly to the organization.
• C) It may create a culture of competitive superiority.
• D) It may not attract the highest-quality employees.
• E) It may lead to feelings of resentment among employees.

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Definitions:

Financial Leverage

The use of borrowed funds to amplify return on investment.

Current Assets

Assets expected to be converted into cash, sold, or consumed within a year, including cash, marketable securities, receivables, and inventory.

Capital Intensity Ratio

The Capital Intensity Ratio is a financial metric that measures the amount of investment in capital assets required to generate one dollar of revenue.

Total Asset Turnover Ratio

A financial metric used to assess a company's efficiency in using its assets to generate sales or revenue.