Which of the Following Is a Characteristic of a Decision-Making

question 25

Multiple Choice

Which of the following is a characteristic of a decision-making unit?

• A) They are often relatively permanent for nonroutine decisions.
• B) Even less important decisions are likely to involve individuals from a wide variety of functional areas.
• C) Large, highly structured organizations ordinarily involve more individuals in a purchase decision than do small, less formal organizations.
• D) Decision-making units are typically a separate permanent organizational department in large organizations.
• E) Small organizations do not use formalized decision-making units.

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Definitions:

Constant-Growth Rate

A growth rate applied continuously and at a constant percentage, often used in the dividend discount model to value stocks.

Dividends

Profits given by a corporation to its shareholders as a distribution.

ROE

Return on Equity, a profitability ratio that measures the amount of net income returned as a percentage of shareholders' equity.

Plowback Ratio

The proportion of earnings that a company reinvests into its business rather than distributing to shareholders as dividends, indicating its growth strategy.