A Biotechnology Company Is Constantly Faced with Important Decisions That

question 105

Multiple Choice

A biotechnology company is constantly faced with important decisions that are likely to have severe consequences on the future of the company. The top managers should

• A) decentralize decision-making authority.
• B) appoint lawyers to make business decisions.
• C) train first-line managers to make these decisions.
• D) exercise centralized decision-making authority.
• E) consult investors when making important daily decisions.

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Definitions:

Bonds Payable

Bonds payable are long-term liabilities that represent funds borrowed by a company from investors, to be repaid with interest at a future date.

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, indicative of financial health.

Solvency-Based Measure

An assessment of a company's ability to meet its long-term financial commitments and continue its operations into the foreseeable future.

Operating Activities

Activities that relate to the core business operations of a company, including revenue and expense transactions that affect the net income.