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Management Will Most Likely Behave the Same Way If a Department

question 12

True/False

Management will most likely behave the same way if a department is structured as a cost center or if the same department is structured as a profit center.


Definitions:

Market Price

is the current price at which an asset or service can be bought or sold in a competitive marketplace.

Common Stock

A type of equity security that represents ownership in a corporation, entitling the holder to a share of the company's profits through dividends and/or capital appreciation.

Net Profit Margin

A profitability ratio calculated by dividing net income by revenue, indicating the percentage of each dollar of revenue that results in net profit.

Total Assets

The sum of all current and long-term assets held by a company, indicating the total resources that a company has at its disposal.

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