Managers Are Sometimes Able to Pursue Their Own Interests at the Expense

question 27

Multiple Choice

Managers are sometimes able to pursue their own interests at the expense of other stakeholders because managers:

• A) are the most powerful outside stakeholders.
• B) have control over organizational resources.
• C) own the organization.
• D) have the ability to initiate a takeover.

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Definitions:

Net Sales

The revenue a company generates from sales after deducting returns, allowances for damaged or missing goods, and discounts.

Vertical Analysis

A technique for analyzing financial statements where every item under the three key account categories (assets, liabilities, and equity) on a balance sheet is shown as a percentage of the total for each category.

Operating Expenses

Costs related to the operation of a business, excluding the cost of goods sold, financing costs, and taxes.

Net Sales

The total income generated from sales by a firm, after reducing it for returns, discounts, and allowances due to damaged or absent goods.