The Marginal Principle of Retained Earnings Means That Each Potential

question 84

Multiple Choice

The marginal principle of retained earnings means that each potential project to be financed by retained earnings must

• A) provide a higher rate of return than the stockholders can on their after-tax dividend income.
• B) yield a return equal to or greater than the marginal cost of capital.
• C) provide enough return to pay the corporation's marginal tax rate.
• D) provide enough return to pay future dividends.

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Definitions:

Careful Selection

The meticulous process of choosing the most suitable candidates or options based on specific criteria.

Scientific Management

Scientific Management is a management theory developed by Frederick W. Taylor that analyzes and synthesizes workflows with the main objective of improving economic efficiency, especially labor productivity.

Frederick Taylor

Known as the father of scientific management, Frederick Taylor introduced principles aiming to improve industrial efficiency and productivity through systematic study and analysis of work tasks.

Performance Incentive

A reward system designed to motivate employees to achieve specific performance targets or goals.