The attractiveness test is the most important test for determining whether diversification into a new business is likely to result in 1 + 1 = 3 increases in shareholder value (as opposed to simply a 1 + 1 = 2 type of increase). True or false? Justify and explain your answer.
What will be an ideal response?
True. In evaluating the "better-off" test, diversifying into a new business must offer potential for the company's existing businesses and the new business to perform better together (1 + 1 = 3) under a single corporate umbrella than they would perform operating as independent, stand-alone businesses. That is, creating added value for shareholders via diversification requires building a multibusiness company where the whole is greater than the sum of its parts.
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The most significant changes ever to be made to the Federal Bankruptcy Code took place with the enactment of the ________ Act
A) 2005 B) 1978 C) 2002 D) 1980
The management of Buelow Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity rather than on the estimated amount of activity for the year. The company's controller has provided an example to illustrate how this new system would work. Estimated activity for the upcoming year 76,000machine-hoursCapacity 94,000machine-hoursActual activity for the year 82,800machine-hoursManufacturing overhead (all fixed)$5,572,320per year Job Q58A, which required 130 machine-hours, is one of the jobs worked on during the year. Required:a. Determine the predetermined overhead rate if the predetermined overhead rate is based on the estimated activity for the upcoming year.b. Determine how much overhead would be applied to Job
Q58A if the predetermined overhead rate is based on estimated activity for the upcoming year.c. Determine the predetermined overhead rate if the predetermined overhead rate is based on the activity at capacity.d. Determine how much overhead would be applied to Job Q58A if the predetermined overhead rate is based on activity at capacity.e. Determine the cost of unused capacity for the yearif the predetermined overhead rate is based on activity at capacity. What will be an ideal response?
Ted's new company is experiencing a steady decline in profit. He needs external financing to prevent his company's profits from declining further. Considering the fact that he wants to exercise sole ownership and control over the firm for as long as possible, Ted is likely to find angel investors who are interested in helping him meet his financial needs.
Answer the following statement true (T) or false (F)
The law of one price suggests that all of the following will have the same price in different
countries EXCEPT A) fresh vegetables. B) grain. C) silver. D) oil.