Wright Bank Corp

question 10

Multiple Choice

Wright Bank Corp. utilizes the janitorial services of Rob's Scrub-All Corp. to keep their buildings clean. Rob's provides all the necessary cleaning supplies, training, background security checks since the crew works after hours) , and all other associated expenses. The other available janitorial services do not typically provide security checks, and a client such as a bank would have to hire guards to watch the work of the janitors. This expense effectively limits the bank to utilizing only Rob's services. Which of the following is being incurred by Wright Bank?

• A) high employment costs
• B) unfavorable supplier status
• C) high switching costs
• D) favorable quality status
• E) complementary products

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Definitions:

Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders.

Price-earnings Ratio

A valuation metric for a company, calculated by dividing the market price per share by the earnings per share.

Net Income

The amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.

Retained Earnings

The part of net earnings a corporation keeps instead of paying out to its shareholders in the form of dividends.