Which of the Following Is NOT a Characteristic of a Growth

question 50

Multiple Choice

Which of the following is NOT a characteristic of a growth company?

• A)The company has a relatively high average expenditure on research and development
• B)The company usually pays a dividend equal to 40 to 50 percent of earnings
• C)The company has consistently stable and high profit margins
• D)The company has a growth rate that is significantly higher than the growth of GDP.

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Definitions:

Direct Materials

Direct Materials are raw materials that are consumed in the manufacturing process, directly traceable to the finished product.

Goods Sold

This term refers to the merchandise that has been purchased by consumers, indicating sales transactions that have been completed during a certain period.

Product Cost

The total expense incurred in manufacturing a product, including direct labor, direct materials, and overhead costs.

Period Cost

A type of expense that is not directly tied to the production of inventory and is instead associated with a specific time period, such as sales and administrative expenses.