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

---

Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period of time, often used for managing liquidity.

Capital Budget

An estimate of the cost of an organization's major investments or projects, analyzing the potential returns and expenditures.

Accruals

The accounting process of recognizing revenues and expenses when they are incurred, regardless of when cash transactions occur.

Economic Forces

Factors such as inflation, interest rates, and unemployment that influence the performance of the economy and impact financial markets.