Which of the Following Statements Is True of Managerial Control

question 32

Multiple Choice

Which of the following statements is true of managerial control in a general partnership?

• A) It is mandatory for each partner to have equal voice in a firm's affairs.
• B) Partners may agree to divide control in such a way as to make controlling partners and minority partners.
• C) The differences in the degree of control do not affect a business's success.
• D) The possibility of deadlock is higher when there is a greater number of partners and an odd number of them.
• E) Language governing issues of managerial control need to be made orally clear to all partners.

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Definitions:

Opportunity Cost

Opportunity cost is the potential benefits an individual, investor, or business misses out on when choosing one alternative over another.

Target Cash Balance

A firm’s desired cash level as determined by the trade-off between carrying costs and shortage costs.

Cost of Borrowing

The total amount of money that a borrower pays to secure a loan, including interest, fees, and any other charges.

Miller-Orr Model

A financial model that helps in managing cash flows and cash reserves of firms, focusing on maintaining an optimal balance level.