A Firm's Primary Interest When It Hires an Additional Worker

question 218

Multiple Choice

A firm's primary interest when it hires an additional worker is

• A) the cost of hiring the additional worker.
• B) how the average output of the firm will be affected by this new worker.
• C) the extra revenue the firm realises from hiring that worker.
• D) whether or not the new worker gets along with the firm's existing workers.

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Definitions:

Residual Income

The income that remains after deducting all required costs of capital and operating expenses, indicating the net income generated beyond the minimum rate of return.

Division Performance

An evaluation of the effectiveness and productivity of a specific division or segment within a company, often measured against pre-set targets or industry standards.

Return On Investment

A measure of the profitability of an investment relative to its costs, commonly expressed as a percentage.

Operating Assets

Assets used by a company to generate revenue, typically including property, plant, and equipment, but excluding investments and inventories.