Improving Quality Can Increase Firm Value Because

question 125

Multiple Choice

Improving quality can increase firm value because

• A) firms can increase activities.
• B) firms can increase costs.
• C) firms can increase customer demand.
• D) all of these.

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Definitions:

Investment Center Residual Income

The net operating income earned by an investment center minus a charge for the capital used to generate those profits, measuring performance beyond generating profits.

Performance Evaluation

The process of assessing an employee's job performance, often to inform decisions regarding promotions, pay adjustments, and development needs.

Departmental Contribution

The amount of profit or revenue generated by a specific department, minus the direct expenses associated with that department.

Overhead

Represents the indirect costs associated with production, such as utilities, rent, and administrative expenses that cannot be directly traced to a specific product.