If the Purpose of an Entity Is to Maximise the Wealth

question 50

Multiple Choice

If the purpose of an entity is to maximise the wealth of its owners,then the performance measure that will ensure managers make decisions in the best interest of the owners is:

• A) profit margin.
• B) return on investment.
• C) residual income.
• D) economic value added.

---

Definitions:

Complex Carbohydrates

Carbohydrates consisting of long chains of sugar molecules, found in foods such as grains, vegetables, and legumes, providing sustained energy.

Lacteal

A lymphatic capillary located in the villi of the small intestine, responsible for absorbing dietary fats and transporting them to the circulatory system.

Epithelial Cell

Cells that line the surfaces of the body including skin, organs, and cavities, acting as a protective barrier.

Lipids

A group of naturally occurring molecules that include fats, waxes, sterols, and fat-soluble vitamins, among others.