When Is the Traditional Top-Down Approach to Planning Most Likely

question 38

Multiple Choice

When is the traditional top-down approach to planning most likely to be effective?

• A) when lower level employees develop plans
• B) when the plans focus on developing a large number of plans and carefully documenting them
• C) when the management avoids the use of a formal planning department
• D) when plans are developed that can actually be used by organizational members

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Definitions:

Debt

Money that is owed or due to be paid to creditors.

Capital Structure

The mix of various types of debt and equity that a company uses to finance its operations.

Tax Rate

The proportion of one's earnings or company profits that is required to be paid as tax.

Degree Of Financial Leverage (DFL)

A measure that evaluates the sensitivity of a company's earnings per share to fluctuations in its operating income, indicating financial risk.