Which of the following statements regarding mergers and diversification is FALSE?
A) Because it may be easier to measure performance accurately in a conglomerate, agency costs may reduce and resources may be more efficiently allocated.
B) Because these employees are obligated to hold idiosyncratic risk, they benefit when the firm reduces that risk by conglomerating.
C) Like a large portfolio, large firms bear less idiosyncratic risk, so often mergers are justified on the basis that the combined firm is less risky.
D) Because most stockholders will already be holding a well-diversified portfolio, they get no further benefit from the firm diversifying through acquisition.
Answer: A
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Which of the following is true of the forecasting approach for staple merchandise categories?
A. Forecasts are typically based on extrapolating historical sales. B. Buyers need to find out what customers are going to want in the future. C. Buyers for these categories conduct focus group studies to find out consumers' opinions. D. Buyers for these categories depend upon category sales forecasts which vendors provide. E. Buyers for these categories rely heavily upon forecast services.
When the current year's ending inventory amount is overstated, the
a. current year's cost of goods sold is overstated. b. current year's total assets are understated. c. current year's net income is overstated. d. next year's income is overstated.
The litmus test of a company's code of ethics is
A. based on the rules a company's top management and board of directors make about "what is right" and "what is wrong." B. determined by the ethical behaviors expected of company personnel in the course of doing their jobs. C. the extent to which a company's approach to ethical behavior mirrors the ethical principles for society at large. D. the degree to which it is connected to a company's statement of core values. E. the extent to which it is embraced in crafting strategy and in the day-to-day operations of the business.
Below you are given a partial computer output based on a sample of 8 observations relating an independent variable (x) and a dependent variable (y). Coefficient Standard Error Intercept13.251 10.77 x 0.803 0.385 ? ANOVA SS Regression Error (Residual)41.674 Total71.875 ? a.Develop the estimated regression equation.b.At ? = .01, test for the significance of the slope.c.At ? = .01, perform an F test.d.Determine the coefficient of determination.
What will be an ideal response?