Which of the following is NOT one of the steps in the managerial decision-making process?
A) basing decisions on sunk costs
B) defining business goals
C) identifying alternative courses of action
D) gathering and analyzing relevant information
A) basing decisions on sunk costs
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Jojola Corporation is investigating buying a small used aircraft for the use of its executives. The aircraft would have a useful life of 5 years. The company uses a discount rate of 13% in its capital budgeting. The net present value of the initial investment and the annual operating cash cost is -$439,238. Management is having difficulty estimating the annual benefit of having the aircraft and estimating the salvage value of the aircraft. (Ignore income taxes.)Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.Ignoring the annual benefit, to the nearest whole dollar how large would the salvage value of the aircraft have to be to make the investment in the aircraft financially attractive?
A. $3,378,754 B. $57,101 C. $439,238 D. $808,910
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The production manager of a company, in an effort to gain a promotion, negotiated a new labor contract with the factory employees that required them to bear a greater percentage of benefit costs than before, thus bringing down the cost of direct labor to
the company. Shortly afterward, several experienced and highly skilled workers resigned, and were replaced by new employees whose work was very slow during their training period. At the end of the quarter, the company's profits fell 10%. This would produce a(n) ________. A) unfavorable direct materials cost variance B) favorable direct labor cost variance C) favorable direct labor efficiency variance D) unfavorable direct materials efficiency variance
After conducting a vendor analysis on potential suppliers, purchasing managers are likely to choose the vendor that
A. was the friendliest. B. offers the widest assortment of business products. C. received the best rating from gatekeepers. D. enables the firm to operate more efficiently with the least risk. E. offers the lowest priced goods and services.