How Many of the Following Decisions Would Be Made by External

question 33

Multiple Choice

How many of the following decisions would be made by external as opposed to internal decision makers: investing funds in the business, assessing an application for a loan, expanding the product range, and hiring staff?

• A) 1
• B) 2
• C) 3
• D) 4

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Definitions:

Operating Income

EBIT, which stands for Earnings Before Interest and Taxes, indicates a firm's profit derived specifically from its primary business activities.

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales revenue; calculated as sales divided by the investment in assets.

Return on Investments

A metric for assessing how effectively an investment generates returns in comparison to its expense.

Controllable Revenues

Revenues over which a manager or department has influence or direct control, often used in performance evaluation and budgeting.