Which of the Following Is True Regarding the Profit Impact

question 40

Multiple Choice

Which of the following is true regarding the profit impact of sales force size:

• A) the sales force is a cost generator.
• B) keeping sales costs within budget will ensure maximum profits.
• C) average profits per salesperson will generally decrease when new salespeople are added.
• D) only a and c above are true.
• E) a, b, and c above are all true.

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Definitions:

Account Payable

An obligation or liability of a company to pay a debt owed to a creditor or supplier for goods and services received.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and a claim on a part of the corporation's profits.

Current Ratio

An indicator of a company's capability to cover its short-term liabilities with assets that can be quickly converted to cash.

Liquidity

A measure of how quickly and easily assets can be converted into cash without significantly impacting their value.