Which of these four choices is most likely to give a reliable measure of the “smallness” of a business?a.By assessing the liabilities or debts of the business.b.By assessing the number of board of directors in the business.c.By assessing the number of employees or sales and assets of the business.d.By assessing the type of organization chart it follows.
Question
Which of these four choices is most likely to give a reliable measure of the “smallness” of a business?a.By assessing the liabilities or debts of the business.b.By assessing the number of board of directors in the business.c.By assessing the number of employees or sales and assets of the business.d.By assessing the type of organization chart it follows.
Solution
The most reliable measure of the "smallness" of a business is c. By assessing the number of employees or sales and assets of the business.
Here's a step-by-step explanation:
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The size of a business is often determined by the number of employees it has, the volume of its sales, and the value of its assets. These are tangible, quantifiable measures that can be compared across different businesses.
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Liabilities or debts of the business (option a) can vary greatly depending on the business's financial strategy and does not necessarily reflect the size of the business.
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The number of board of directors (option b) is not a reliable measure as it can vary greatly among businesses of different sizes and types. Some small businesses may have a large board of directors, while some large businesses may have a small board.
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The type of organization chart it follows (option d) is also not a reliable measure as it can vary greatly among businesses of different sizes and types. Some small businesses may have a complex organizational structure, while some large businesses may have a simple structure.
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Therefore, the number of employees, sales volume, and asset value are the most reliable measures of the size of a business.
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