Which Example Best Defines What Is Meant by a "Free

question 94

Multiple Choice

Which example best defines what is meant by a "free rider"?

• A) Amy missed her sales goal this month by only 2 sales because she was not motivated to stay and complete extra cold calls to generate more clients.
• B) Sam and John came up with an idea of how to run the production line more efficiently and both of them, as well as Mike, who did not contribute to the work, received a bonus for working on the idea.
• C) Eric is paid for a minimum of 3 hours even if a service call only takes him 30 minutes. He usually cuts corners to get his work done in less time.
• D) Olivia must work overtime each week because she is not able to perform her job efficiently. This causes additional overtime costs and cuts into her departments level of profit sharing each month.
• E) Bob is a satisfactory employee but he does not offer to work extra hours when needed, he does not ask coworkers if they need his help when they appear to be having difficulty, and he often calls off sick they day after profit sharing checks are handed out.

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Definitions:

Days' Sales

A financial metric that estimates the average time it takes for a company to collect cash from its customers after a sale has been made, often related to inventory turnover.

Receivables

Financial assets representing money owed to an entity by others for goods delivered or services provided on credit.

Return on Total Assets

A financial ratio that measures the net income produced by total assets during a period.

Interest Expense

The cost incurred by an entity for borrowing funds, represented as an expense on the income statement.