2/17 Flashcards
an underlying assumption of the constant growth model is
that the stock price will grow at the same rate as the dividend.
Dumping occurs when
the price charged to foreign customers on exported goods is less that either the price charged in the domestic market or less than the production cost.
Six Sigma for existing products
define the problem
measure key aspects
analyze data
improve or optimize current processes
control
six sigma for new products
define design goals
measure critical quality issues
analyze design alternatives
design optimization
verify the design
The cash budget must be prepared before
you can complete the forecasted balance sheet
The current level of inventory has no
impact on the optimal level of inventory
under pure (perfect) competition, strategic plans include
maintaining market share and responsiveness of the sales price to market conditions
under oligopoly, strategic plans focus on
maintaining market share, ensuring product differentiation, adapting to changes in price and/or production volume.
Supply chain operations model (SCOR) where does the ability of the suppliers to supply resources fall into?
Plan
plan - balance demand and supply
source - procure resources
make - turn raw materials into products
deliver - product in hands of customers
what balanced score card perspectives examine a company’s success in a targeted market?
customer perspective
financial - profit and growth
internal business - efficiency
customer - customer opinion
advance and learning innovation - human capital development
assuming that demand for a product is price unit elastic, revenue will
not change
price will go up, quantity will go down. rev will be same.
an information resource should be categorized as medium impact if there is
a work-around for its loss in the short term but recovery is necessary for the long term
core values of an entity closely correlate with its
Culture
A working capital technique which delays the outflow of cash
A draft
A company evaluating the advantages and disadvantages of short-term and long-term financing options would note which of the following two characteristics to be true?
Short term financing - increased interest rate risk, but should be lower in interest rates
Longer term financing - decreased credit risk, you seek LT financing less often,
The basic assumption of activity based costing is that
products or services require the performance of activities, and activities consume resources.
Average daily outflows are 3 mil for Evans inc. A new cash management system can add two days to the disbursement schedule. Assuming Evans earns 10% on excess funds, how much should the firm be willing to pay per year for this cash management system?
3,000,000 x 2 = 6,000,000
6,000,000 x .1 = 600,000
600,000 allowable cost for system
According to COSO, establishing, maintaining, and monitoring an effective internal control system can do each of the following except
-help an entity achieve performance targets
-promote an entity’s compliance with laws and regulations
-ensure an entity’s financial survival
-provide protection for an entity’s resources
it cannot ensure financial survival.
a cost that bears an observable and known relationship to a quantifiable activity base is an
engineered cost.
The corporation publishes and Employee Handbook that contains employee responsibilities for moral behavior including a code of conduct. Each year, employees must acknowledge their receipt of the handbook, their understanding, and if they have any awareness of non-compliance within the company. This would indicate
Sound integrity and ethical values are developed and understood and set the standard of conduct for financial reporting.
the best cost strategy strives to
have the firm evaluate and change its value chain such that it can achieve the lowest cost among its closest competitors while matching them on the features desired by customers.
A Pareto diagram combines the elements of
a histogram and quality control issues displayed in order of most to least frequent with a line graph that displays the cumulative occurrence of the problems
As used in capital budgeting analysis, the internal rate of return uses which of the following items in its computation
-net incremental investment
-incremental average operating income
-net annual cash flows
net incremental investment
net annual cash flows
The regular evaluation of employees for their competence in financial reporting is an important link between
human resources policies and achievement of financial reporting objectives.
