Assume the Global Economy Rebounds Rapidly from the Great Recession

question 5

Multiple Choice

Assume the global economy rebounds rapidly from the Great Recession. What constraint is this likely to have on decisions managers make?

• A) The number of qualified candidates available for hire will become smaller.
• B) Managers will be asked to eliminate positions to cut labor costs.
• C) The hourly compensation average will have to fall; managers will be asked to offer less to job candidates.
• D) Positions will be easier to fill as college graduates settle for lower paying jobs.

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Definitions:

Useful Life

The estimated time period that an asset is expected to be usable for the purpose it was acquired, influencing depreciation calculations and capital budgeting.

Straight-Line Method

A method of calculating depreciation of an asset by evenly spreading its cost over the expected useful life of the asset.

Depreciation Expense

The portion of the cost of a fixed asset that is considered an expense due to its wear and tear over a specific period.

Useful Life

The estimated period over which a fixed asset is expected to be usable by the entity, affecting its depreciation calculation.