Which of the Following Explains Most Clearly Why Business Owners

question 37

Multiple Choice

Which of the following explains most clearly why business owners have a strong incentive to strive for operational efficiency?

• A) They recognize that operational efficiency promotes the public interest.
• B) As residual claimants, owners will receive a higher income from increased efficiency.
• C) The owners will be able to keep production costs low by providing free managerial services to the firm.
• D) The owners will be able to gain by paying employees below market wages, which will improve the overall efficiency of the economy.

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Definitions:

Bond Discount

Bond Discount occurs when the bond's market price is below its face value, indicating that it was sold for less than its original value.

Issued

Refers to the number of shares that a corporation has sold to investors or otherwise put into circulation.

Straight-Line Method

A method of depreciation that allocates an equal amount of depreciation each year over the useful life of an asset.

Bond Discount

The difference between the face value of a bond and its selling price when the bond is sold for less than its face value.