List and briefly discuss the two limitations of financial performance measures.
What will be an ideal response?
Measurement issues—Both the return on investment and residual income calculations use the term average total assets. Management must decide whether to use a simple average, which assets should be included, and whether the gross or the net book value should be used.
Short-term focus—Financial performance measures tend to be used with a short-term focus. This focus may cause managers to make decisions that increase measures in the short term but hurt the company in the long term.
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An investor expects earnings from a stock to grow at a constant rate of 3% over time and the investors' rate of discount is constant at 4%. If earnings last year were $152, then the fundamental value of the stock would be
A. $152. B. $190. C. $1,520. D. $15,656.
Which of the following statements about blockchain is not true?
A. A blockchain system is composed of a distributed network of computers. B. A blockchain system is inherently centralized. C. A blockchain system is a transaction processing system. D. Cryptocurrencies are based on blockchain technology.
Use the following information for questions 1-5:Stan's Surf Shack purchased five surfboards for $200 each. Later it purchased two additional surfboards for $250 each. Stan's sold a total of six surfboards during the period for $350 cash each. The company uses the perpetual inventory system and has not yet accrued any income taxes for the period.Indicate how the event described in the question affects the elements of the financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot
Affected = NAStan's pays the income taxes incurred for the current accounting period.AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash Flows??????? What will be an ideal response?
Indicate the correct form of the adjective or adverb in parentheses. Use more or most, when appropriate, instead of less or least. The ridge trail extends the (far) of any in the park