If a Cost-Cutting Order Comes Down from Top Management, the Supervisor's

question 60

Multiple Choice

If a cost-cutting order comes down from top management, the supervisor's best response is to:

• A) Look for places to reduce expenses with the help of the employees.
• B) Hold "pep rallies" with employees.
• C) Stop buying any supplies.
• D) Follow the directive halfheartedly.

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital from the operating income.

Investment Opportunity

Refers to a financial investment or asset that has the potential to generate a profitable return.

Required Rate of Return

The minimum expected return by investors or lenders for providing capital, influenced by the investment's risk level.

Operations

The day-to-day activities involved in running a business that lead to the production of goods and provision of services.