Frappe Operates as a Strategic Business Unit (SBU)under More or Less

question 110

Multiple Choice

Frappe operates as a strategic business unit (SBU) under More or Less Inc.,a home-furnishings manufacturer.From this information,it may be reasonable to infer that

• A) Frappe does not have its own profit and loss responsibility.
• B) Frappe is dependent on the other SBUs in More or Less Inc.
• C) Frappe has a matrix organizational structure.
• D) Frappe is led by its own CEO (or equivalent general manager).

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Definitions:

Required Rate Of Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put their money into a particular security or project.

Annual Before Taxes

The total income or earnings generated by an entity during a fiscal year before any tax deductions.

Tax Rate

The degree of governmental claim on the earnings or profit of people and companies through taxation.

Operating Cash Flow (OCF)

A measure of the cash generated by a company's normal business operations, indicating its ability to cover operational expenses and invest in its business.