When Is the Most Appropriate Time to Identify Ethical Problems

question 70

Multiple Choice

When is the most appropriate time to identify ethical problems in organizations?

• A) When they are discovered by legal authorities
• B) As they arise
• C) After they arise
• D) When they are discovered by shareholders

---

Definitions:

Degree of Operating Leverage

A ratio that quantifies the sensitivity of a company's operating income to its sales, demonstrating the impact of fixed and variable costs on profitability.

Fixed Costs

Fixed costs that stay the same no matter how much is manufactured or sold, including expenses for rent, employee salaries, and insurance charges.

Hard Rationing

A situation where companies cannot obtain funds for projects despite having positive net present values due to external financing constraints.

Capital Funds

Financial resources that are used to fund a company's operations and growth, typically sourced from equity or debt.