Which of the following statements regarding the return on equity (ROE) measure is incorrect?
A. ROE is used to measure the profitability of the firm in relation to the amount invested by stockholders.
B. ROE is affected by a company's use of leverage.
C. ROE equals net income divided by average total stockholders' equity.
D. A company's ROE is lower than its return on investment because ROE does not consider that part of the business that is financed by debt.
Answer: D
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At one end of the spectrum, organizations can be absolutely centralized, while at the other end, they can be completely decentralized.
Answer the following statement true (T) or false (F)
A capital budgeting method that measures the time required for a project's cash inflows to equal the original investment is referred to as the _________________________
Fill in the blank(s) with correct word
U.S. GAAP and IFRS provide criteria for distinguishing operating leases from capital leases. Which of the following is not true?
a. Under the capital, or finance, lease method, the lessor records the signing of a capital lease the same as if the lessor sold the leased asset for an installment note receivable. b. Under the capital, or finance, lease method, the lessee recognizes interest expense on the lease liability, similar to recognizing interest expense on long-term notes or bonds. c. Under the capital, or finance, lease method, the lessor amortizes the leased asset, similar to recognizing depreciation on buildings and equipment. d. Under the capital, or finance, lease method, the lessee records the leased asset and the lease liability on the balance sheet at the present value of the contractual cash flows at the time of signing the lease. e. The capital, or finance, lease method, treats leases equivalent to installment purchases or sales, where the lessee borrows funds from the lessor to purchase the asset and the lessor recognizes profit at the time of sale.
______________ is based on who has the bargaining power between the purchaser and the supplier.
a. Intercultural power b. Interorganizational power c. Interorganizational relationships d. Interpersonal relationships