An Organization Needs to Consider How Communities React to It

question 18

Multiple Choice

An organization needs to consider how communities react to it s workforce planning methods because:

• A) these types of decisions can cause emotional reactions from employees, shareholders and customers.
• B) the timing of the decisions may determine how people react.
• C) offshoring is generally the best work force planning approach.
• D) unemployment rates play a very small part in how and when work force planning methods are carried out.
• E) Both A and B are correct.

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Definitions:

Bankruptcy Cost

The expenses and financial losses associated with going through bankruptcy, including legal fees, lost business, and detrimental effects on creditworthiness.

Interest Tax Shield

A lowered income tax obligation stemming from approved deductions on interest expenses.

Levered Firm

A company that uses debt (loans or bonds) in addition to equity in its financing structure, often leading to higher risk and potentially higher returns.

M&M Proposition I

A theory in corporate finance suggesting that in a perfect market, the value of a firm is unaffected by how it is financed, regardless of the debt-to-equity ratio.