A nonprofit firm:
A)separates the control of the firm from management.
B)separates the control of the firm from the residual claimant.
C)does not earn a profit.
D)separates the control of the firm from the workers.

Question

Quizplus · Accepted Answer

Nonprofit firms separate the control of the firm from the residual claimant because the residual claimants (those who would normally claim any profits) do not have control over the firm, as profits are reinvested into the organization's mission rather than distributed to owners or shareholders.

A Nonprofit Firm