In overforecasting, the forecaster is too ________.
Fill in the blank(s) with the appropriate word(s).
Answer: optimistic
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Pressure upon management to manipulate financial information is a common characteristic in fraud cases
a. True b. False Indicate whether the statement is true or false
Which of the following items should be classified as an extraordinary item on a corporate income statement?
a. Excess of the selling price over the cost of treasury stock b. Loss due to takeover of property by a foreign government c. Gain on the sale of a long-term investment d. Loss due to discontinued operations
Calculate answers to the following scenarios using present value tables: a. If $100 is deposited into an account paying 8 percent simple interest, what will be the value of the account in 5 years? b. If an accumulation of $8,000 is desired at the end of
4 years, what amount must be deposited now to accomplish that goal, assuming 12 percent interest compounded annually? c. What is the present value of $300 received at the end of each year for 4 years, assuming 9 percent interest compounded annually? d. What amount must be deposited at the bank today to grow to $10,000 in 5 years, assuming 14 percent interest compounded semiannually?
Regarding employee stock options, which of the following is/are true?
a. Firms compute a fair-value-based measure of employee stock options on the date of the grant using an option-pricing model that incorporates information about the current market price, the exercise price, the expected time between grant and exercise, the expected volatility of the stock, the expected dividends, and the risk-free interest rate. b. Total compensation cost is the number of options the firm expects to vest times the value per option. c. Firms amortize total compensation cost over the requisite service period, which is the expected period of benefit. d. The requisite service period is usually the period between the grant date and the vesting date. e. all of the above