If Upper Management Is NOT Satisfied with a Division's Current

question 49

Multiple Choice

If upper management is NOT satisfied with a division's current profit margin, which of the following strategies would they most likely recommend?

• A) Reduce the level of assets owned by the division
• B) Reduce either product costs or operating expenses or both
• C) Invest in more assets for the division
• D) Locate new equity investment funds

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Definitions:

Fasb

The Financial Accounting Standards Board, an organization that establishes accounting and financial reporting standards for companies and nonprofits in the United States.

Standards-Setting Body

An organization or group responsible for developing and issuing standards, such as accounting or auditing standards.

Diluted Earnings Per Share

A metric that shows the quality of a company's earnings per share if all convertible securities were converted into new shares.

Potentially Dilutive Securities

Financial instruments that could decrease earnings per share if converted to common stock, such as convertible bonds, options, and warrants.