Which of the following is a disadvantage of measuring firm performance through total return to shareholders and firm market capitalization?
A. These tools measure competitive advantage in absolute terms rather than relative terms.
B. These tools fail to indicate how the stock market views all available public information about a firm's expected future performance.
C. Only the book value of the share prices is taken into account when applying these measures, and not the market value.
D. Market volatility makes it difficult to assess firm performance through these measures, particularly in the short-term.
Answer: D
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Answer the following statement true (T) or false (F)
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A company estimates that warranty expense will be 5% of sales. The company's sales for the current period are $168,000. The current period's entry to record the warranty expense is:
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