Which of the following situations is most likely to pose a problem for companies that use return on investment (ROI) as a measure of a manager's performance?
A) Managers may be encouraged to purchase more operating assets than they otherwise should.
B) Managers may be discouraged from purchasing operating assets that could improve overall profitability.
C) Managers may be discouraged from reducing their division's costs.
D) Managers may be discouraged from paying off debt in order to reduce interest costs.
B
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Senior executives cannot be criminally prosecuted for the wrong doings they commit on behalf of the companies where they work
Indicate whether the statement is true or false
Which of the following is not a use of the cost of production report?
A) To help managers control operations. B) To help managers isolate problems. C) To project production. D) To help managers to improve operations.
What is the most important difference between a limited partnership and a limited liability
partnership? A) Limited partnerships are not a taxable entity, but limited liability partnerships are a taxable entity. B) There must be one partner with unlimited liability in a limited liability partnership, but not in a limited partnership. C) There is a maximum number of partners permitted in a limited partnership, but not in a limited liability partnership. D) There must be one partner with unlimited liability in a limited partnership, but not in a limited liability partnership.
If a firm raises capital by selling new bonds, the buyer is called the "issuing firm" and the coupon rate is generally set equal to the firm's required rate.
Answer the following statement true (T) or false (F)