The best control standards are specified and measurable desired performance levels for given goals. For which one of the following would a for-profit organization be LEAST likely to have a standard?
A) manufacturing defects
B) percentage reduction in costs
C) number of customer complaints
D) return on investment
E) employee morale
Answer: E
Explanation: E) Employee morale is often a difficult thing to measure. It can be tied to other more measurable indicators such as attrition, tardiness, or absenteeism, but morale itself is subjective and personal, making it difficult to quantify.
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Which of the following statements about the use of risk-based capital requirements is (are) true?
I. Insurers must have a certain amount of capital depending on the riskiness of their investments and insurance operations. II. Insurers may be required to take certain actions depending on how much capital they have relative to their risk-based capital requirements. A) I only B) II only C) both I and II D) neither I nor II
Determining the best way to raise money to fund a firm's long-term investments is called
A) the portfolio decision. B) the capital budgeting decision. C) the money flow processing decision. D) the capital structure decision.