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58) Economic value added, unlike residual income, charges managers for the costs of their investments in long-term assets and working capital. 59) Companies that adopt the Economic Value Added concept define investment as total assets employed minus current liabilities. 60) In an Economic Added Value calculation, the corporate charge for.
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17) Capital Investments has three divisions. Each division's required rate of return is 15%. Planned operating results for 20X5 are as follows: Division Operating income Investment A $15,000,000 $100,000,000 B $25,000,000 $125,000,000 C $11,000,000 $ 50,000,000 The company is planning an expansion, which will require each division to increase its investments by $25,000,000 and its income by $4,500,000. Required: a.Compute the current ROI.
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1) Which of the following is a difference between a diagnostic control system and an interactive control system? A) A diagnostic control system focuses on meeting expectations, while an interactive control system focuses on standards of ethical behavior. B) A diagnostic control system focuses on standards of ethical behavior while an.
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15) Capital investment decisions that are strategic in nature: A) are easily handled by the capital budgeting process when the accrual accounting rate of return method is used as the tool to analyze the alternatives. B) are often referred to as "real options." C) require managers to consider a broad range of factors.
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11) In a profit center, the manager is accountable for investments, revenues, and costs. 12) Suboptimal decision making is also called congruent decision making. 13) Surveys indicate that decisions made most frequently at the corporate level are related to sources of supplies and products to manufacture. 14) An important advantage of.
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23) What is the Tractor Division's investment turnover? A) .50 B) 1.0 C) 2.0 D) 2.5 24) What is the Tiller Division's investment turnover? A) .50 B) .833 C) 1.2 D) 1.5 25) Costs recognized in particular situations that are NOT recognized by accrual accounting procedures are: A) opportunity costs B) imputed costs C) cash accounting costs.
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1) When managers set and measure target levels of performance A) historical-cost-based accounting measures are usually adequate for evaluating economic returns on new investments. B) historical-cost ROIs cannot be used to evaluate current performance. C) the timing of feedback is not dependent on the sophistication of the organization’s information technology. D) the timing of.
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86) Define business process. What might be a business process used at a hospital? 87) Describe the four steps taken in solving a business problem. 88) What are the three dimensions to business problems? Give an example of each. 89) The department chain you work for has had numerous complaints about slow customer.
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61) An information skill important for a marketing major would be: A) an understanding of online transaction and reporting systems. B) an understanding of product management enterprise systems. C) an understanding of supplier management enterprise systems. D) an understanding of enterprise systems that enhance leadership. 62) Consider an information system in a moving company that.
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3) Tying performance measures more closely to a manager's efforts: A) encourages the use of nonfinancial measures B) results in a strict use of financial ratios C) results in the salary component of compensation dominating the total compensation package D) Both A and C are correct. 4) Relative performance evaluation:.
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31) The average number of tickets sold daily online is an example of: A) input. B) raw data. C) meaningful information. D) output. 32) Output: A) is feedback that has been processed to create meaningful information. B) is information that is returned to appropriate members of the organization to help them evaluate the input stage. C) transfers raw.
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12) Assume you are evaluating a manufacturing company. Match the various organizational activities and concepts with the performance measures listed. Some items may have more than one match. Activities: 1.Change in revenues 2.Cycle time 3.Economic order quantity 4.Manufacturing defects 5.Market share 6.New products 7.On-time delivery 8.Operating income 9.Product reliability 10.Time-to-market Performance measure:   __________a.Profitability __________b.Customer satisfaction __________c.Innovation __________d.Efficiency, quality, and time.
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34) Bedtime Bedding Company manufactures pillows. The Cover Division makes covers and the Assembly Division makes the finished products. The covers can be sold separately for $5.00. The pillows sell for $6.00. The information related to manufacturing for the most recent year is as follows: Cover Division manufacturing costs $6,000,000 Sales of.
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1) Which of the following is NOT a characteristic of a management control system? A) It aids and coordinates the process of making decisions. B) It encourages short-term profitability. C) It motivates individuals throughout the organization to act in concert. D) It coordinates forecasting sales and cost-driver activities, budgeting, and.
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1) A report that measures financial and nonfinancial performance measures for various organization units in a single report is called a(n): A) balanced scorecard B) financial report scorecard C) imbalanced scorecard D) unbalanced scorecard 2) Customer-satisfaction measures are an example of the: A) goal-congruence approach B) balanced scorecard approach C).
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5) An advantage of using budgeted costs for transfer pricing among divisions is that: A) overall corporate profitability is usually higher B) it usually provides a basis for optimal decision making C) the divisions know the transfer price in advance D) it promotes subunit autonomy 6) The transfer-pricing method that.
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11) The essence of decentralization is the freedom for managers at lower levels of the organization to make decisions. 12) The formal management control system includes shared values, loyalties, and mutual commitments among members of the company, company culture, and norms about acceptable behavior for managers and other employees. 13).
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69) Coptermagic Company supplies helicopters to corporate clients. Coptermagic has two sources of funds: long term debt with a market and book value of $32 million issued at an interest rate of 10%, and equity capital that has a market value of $18 million (book value of $8 million). The.
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5) The Lancaster Corporation has an annual cash inflow from operations from its investment in a capital asset of $22,000 each year for five years. The corporation's income tax rate is 25%. Calculate the five years total after-tax cash inflow from operations. A) $10,000 B) $82,500 C) $88,000 D) $110,000 6) Comparison of the.
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6) Additional factors that arise in multinational transfer pricing include tariffs and customs duties levied on imports of products into a country. 7) Tax considerations should play no part in determining a transfer price between international divisions of a firm. 8) It is possible to increase the overall after-tax profit.
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41) Data management technology consists of: A) the physical hardware and media used by an organization for storing data. B) the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. C) the software governing the organization of data on physical storage media. D) the hardware and software used.
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Answer the following questions using the information below: The top management at Munchie Company, a manufacturer of computer games, is attempting to recover from a flood that destroyed some of their accounting records. The main computer system was also severely damaged. The following information was salvaged: Alpha DivisionBeta DivisionGamma Division Sales$5,000,000(a)$2,300,000 Net operating income$3,000,000$1.300,000$.
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66) Provide the missing data for the following situations: Red Division White Division Blue Division Sales $? $10,000,000 $? Net operating income $200,000 $400,000 $288,000 Operating assets $? $? $1,600,000 Return on investment 0.16 0.10 ? Return on sales 0.04 ? 0.12 Investment turnover ? ? 1.5 67) Hargrave Products has three divisions, which operate autonomously. Their results for 20X5 were as follows: East West International Sales $30,000,000 $40,000,000 $50,000,000 Cost of goods sold 15,000,000 25,000,000 37,000,000 Operating income 4,500,000 4,750,000 5,000,000 Investment base 30,000,000 30,500,000 31,000,000 The company's desired rate of return is 15%. Required: a.Compute.
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51) In choosing the best solution for a business problem, one of the most important considerations is: A) change management. B) existing resources and skills. C) employee training. D) outcome measurement. 52) The final step in the four-step model of business problem solving is: A) outcome. B) implementation. C) change management. D) feedback. 53) Which of the following would not.
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Answer the following questions using the information below: Carriage Incorporated manufactures horse carriages. The company has two divisions, Wheels and Assembly. Because of different accounting methods and inflation rates, the company is considering multiple evaluation measures. The following information is provided for 2009: ASSETS INCOME Book value Current value Book value Current value Wheels $485,000 $550,000 $120,000 $140,000 Assembly $750,000 $1,200,000 $160,000 $172,500 The company is currently using.
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21) As discussed in the chapter opening case, the Giants' new ticketing information systems is an effort to achieve which of the primary business objectives? A) Customer and supplier intimacy B) Improved decision making C) Operational excellence D) New products and services 22) Journalist Thomas Friedman's description of the world as "flat" referred to: A) the.
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1) Senior management is responsible for directing the day-to-day activities of the business. 2) Operational-level manufacturing systems deal with the firm's long-term manufacturing goals, such as where to locate a new plant. 3) Transaction processing systems are most commonly encountered at the senior management level of an organization. 4) TPS help managers monitor.
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1) Purchase of information systems and telecommunications equipment constituted more than half of all capital investment in the United States in 2013. 2) A business model describes how a company produces, delivers, and sells a product or service to create wealth. 3) Information systems consists of all the hardware and software that.
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1) ________ means minimum constraints and maximum freedom for managers at the lowest levels of an organization to make decisions and to take actions. A) Total centralization B) Use of market-based transfer pricing C) Total decentralization D) Use of negotiated transfer pricing 2) An advantage of decentralization is that it: A) creates greater responsiveness to.
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1) Transferring products or services at market prices generally leads to optimal decisions when: A) the market for the intermediate product is perfectly competitive B) the interdependencies of the subunits are minimal C) there are no additional costs or benefits to the company in buying or selling in the external.
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3) The most significant manager evaluation and goal congruence issues arise because of inconsistencies between the following methods of choosing among alternatives for capital budgeting purposes: A) net present value method and the internal rate of return method B) payback method and the net present value method C) net present value method and.
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81) Define operational excellence. How can information systems help achieve it? 82) You work for an auto manufacturer and distributor. How could you use information systems to achieve greater customer intimacy? 83) What important managerial function is impaired by not having access to timely and accurate information? What is the effect of.
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7) Opportunity costs represent the cash flows directly associated with the production and transfer of the products and services. 8) Market-based transfer prices are ideal when there is no idle capacity.in the selling division. 9) If the product sold between divisions has no intermediate market, the opportunity cost of supplying.
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Answer the following questions using the information below: Division A sells ground veal internally to Division B, which in turn, produces veal burgers that sell for $10 per pound. Division A incurs costs of $1.50 per pound while Division B incurs additional costs of $5.00 per pound. 23) What is Division A's.
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Answer the following questions using the information below: Calculate the Division operating income for the AlphaShoe Company which manufactures only one type of shoe and has two divisions, the Sole Division, and the Assembly Division. The Sole Division manufactures soles for the Assembly Division, which completes the shoe and sells it.
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48) Return on investment is also called the accrual accounting rate of return. 49) Return on sales is calculated by dividing revenues by income. 50) Investment turnover is calculated as revenue divided by investment. 51) The three alternatives for increasing return on investment include increasing assets such as receivables, increasing revenues, and.
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9) Jensen Manufacturing is considering buying an automated machine that costs $500,000. It requires working capital of $50,000. Annual cash savings are anticipated to be $206,000 for five years. The company uses straight-line depreciation. The salvage value at the end of five years is expected to be $20,000. The working.
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14) Xenon Autocar Company manufactures automobiles. The Fastback Car Division sells its cars for $50,000 each to the general public. The fastback cars have manufacturing costs of $25,000 each for variable and $15,000 each for fixed costs. The division's total fixed manufacturing costs are $75,000,000 at the normal volume of.
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