Which of the Following Statements Is a Reason for Using

question 58

Multiple Choice

Which of the following statements is a reason for using operating income or EBIT as a measure of performance in a profit center of a multinational corporation?

• A) It is much easier to calculate than other measures.
• B) It is the only measure available to the senior management of the parent company.
• C) It excludes interest and taxes, which are beyond the manager's control.
• D) Divisional managers will maximize output if this measure is used for management control.

---

Definitions:

Discharged

Refers to the release or termination of a legal duty, debt, or obligation.

Bankruptcy Estate

All legal or equitable interests of the debtor in property, both tangible and intangible, at the time of the bankruptcy filing.

Legal Actions

Formal steps taken in a court of law to enforce a right, seek a remedy, or resolve a dispute.

Obligations of the Debtor

Refers to the responsibilities and duties that a debtor must fulfill towards creditors, including repayment of debt.