Which of the following statements is FALSE?
A) Estimating dividends, especially for the distant future, is difficult.
B) A firm can only pay out its earnings to investors or reinvest their earnings.
C) Successful young firms often have high initial earnings growth rates.
D) According to the constant dividend growth model, the value of the firm depends on the current dividend level, divided by the equity cost of capital plus the grow rate.
Answer: D
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Many companies use MACRS (Modified Accelerated Cost Recovery System) depreciation for
a. financial reporting purposes and a different method for tax purposes. b. financial reporting purposes because depreciation is not allowed for tax purposes. c. tax purposes because it results in a larger net income in the early years of a plant asset's life d. tax purposes because of a desire to report higher expenses in early years in order to pay lower taxes.
Although it is relatively easy for rivals to implement process management tools, it is much more difficult and time-consuming for them to
A. keep employees well-informed about the strides being made with continuous improvement. B. instill a deeply ingrained culture of operating excellence. C. understand the barriers to installing new operating activities. D. combine the pursuit of financial objectives with the pursuit of its strategic objectives. E. unify the managerial efforts behind improving operating practices as a commendable goal.
Managers often first assume poor performance of subordinates to
A. inadequate training. B. poor motivation. C. external constraints. D. lack of ability.
A firm may use all of the following methods for beating the competition EXCEPT
A. seeking a monopoly. B. applying for patents. C. utilizing advanced technology. D. developing a sustainable competitive advantage. E. conducting a competitor analysis.