ABC Company Has a Strategy of Being a Low-Cost Provider

question 61

Multiple Choice

ABC Company has a strategy of being a low-cost provider of services and thus pays its employees a low wage rate. Which of the following is an example of an HR practice that would be in alignment with this strategy?

• A) a heavy investment in training
• B) recruitment at top educational institutions
• C) complex compensation plans such as profit sharing and stock options
• D) career planning sessions with employees
• E) ongoing recruitment activities

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Definitions:

Coupon Interest Rate

The fixed rate of interest paid by a bond to its holder at specified intervals until maturity.

Market Interest Rate

The prevailing rate of interest determined by supply and demand in the money market that borrowers must pay and lenders receive.

Operating Lease

A contract that allows the use of an asset but does not convey rights of ownership, typically used for short-term leasing arrangements.

Capital Lease

A lease classified as a financial transaction where the lessee gains substantial control over an asset, treated like an asset purchase.