Why should a financial decision maker such as a corporate treasurer or CFO be concerned with market efficiency?
What will be an ideal response?
Good answers to this question might indicate that market efficiency is a necessary condition for the 'maximize shareholder wealth' goal to apply. Unless we are confident that the market price is an economically meaningful number, why should we seek to maximize that price? Similarly, students should recognize that there is a very strong link between managerial decisions and the value of the firm, as reflected in security prices. When managers make wise financial decisions by accepting positive NPV projects, share value should rise. In efficient markets, that will occur.
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The authority of the government to take away private property for the public good or for public use is called
A. condemnation. B. easement. C. eminent domain. D. police powers.
Which one of the following statements is false concerning the retail inventory method?
A) In arriving at a cost-to-retail ratio, sales discounts are deducted from goods available for sale to determine ending inventory at retail. B) Employee discounts are subtracted from goods available for sale to compute ending inventory at retail. C) Abnormal inventory spoilage would be subtracted at both cost and retail in the determination of goods available for sale. D) Purchase returns and allowances must be subtracted from both the cost and retail value of the purchases.
Which of the following costs would not be included in factory overhead in the manufacture of a student's desk?
a. The oil used to maintain the machinery. b. The salary of the supervisor of the Assembly department. c. The wood used to form the top of the desk. d. The wages of personnel who perform inspections of incoming materials.
Which of the following would be considered a discrete loss in a production process?
a. adding the correct ingredients to make a bottle of ketchup b. putting the appropriate components together for a stereo c. adding the wrong components when assembling a stereo d. putting the appropriate pieces for a bike in the box