Which of the Following Is True Regarding a Profit-Sharing Plan

question 46

Multiple Choice

Which of the following is true regarding a profit-sharing plan?

• A) It prevents union members from sharing the wealth.
• B) It creates a difficulty in maintaining employment levels in marginal organizations.
• C) It becomes ineffective when union members participate in plan development.
• D) Not all unions would be in favor of this type of plan.

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Definitions:

Net Income

The sum a company is left with after all its expenses and taxes are removed from its income.

Crossover Point

The point at which two different financial scenarios yield the same result or where an investment's cost and benefits intersect.

Cash Inflows

Money or funds received by a business during a period of time from various sources including sales, investments, and financing.