According to the Theory of Constraints, Which of the Following

question 122

Multiple Choice

According to the theory of constraints, which of the following is a financial measurement that can be used to measure the firm's ability to make money?

• A) Net profit
• B) Throughput
• C) Inventory
• D) Sales
• E) Retained earnings

---

Definitions:

Horizontal Equity

The principle that individuals with similar income or resources should be treated equally by the tax system.

Incentives

Refers to stimuli, rewards, or payments that motivate individuals or entities to perform certain actions or behaviors.

Proportional Tax

A tax system where the rate remains constant regardless of the amount to which the tax base is applied.

Progressive Tax

A taxation system where the tax rate increases as the taxable amount or income increases, placing a higher burden on wealthier individuals.