Globaltech,a Computer Software Company Is in the Process of Eliminating

question 43

Multiple Choice

Globaltech,a computer software company is in the process of eliminating hierarchy levels in the organization.Globaltech has carefully analyzed all of the positions in the company and strategically determined which positions to keep.It plans to protect its most talented people and help the others with special attention.Globaltech is beginning to

• A)develop a new information system.
• B)complete its retirement plan.
• C)downsize.
• D)avoid cyclical hiring.
• E)determine the right fit of the organizational goals.

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Definitions:

Leverage

The use of borrowed capital or debt to increase the potential return of an investment.

Debt Financing

Raising capital through the sale of bonds, bills, or notes to individuals or institutions, which must be repaid over time with interest.

Interest Tax Shield

The reduction in income taxes that results from the deductibility of interest payments.

Debt Financing

Raising capital through the borrowing of funds to be paid back at a later date, typically with interest.