Q&A Hero

Q: Which of the following is a not benefit of an AMH? A. Quicker material movement B. Lower inventories C. Reduced product damage D. Higher labor productivity E. Enhanced inventory security

Q: 67. Why might a depreciated asset's book value not be a good representation of its' true worth?

Q: Which of the following statements is most likely to be true regarding the managers who take a defensive approach to social responsibility? A) They make no attempt to exercise social responsibility beyond what the law dictates. B) They balance the interests of different stakeholders against one another so the claims of stockholders are seen in relation to the claims of other stakeholders. C) They are willing to use organizational resources to promote the interests not only of stockholders but of the other stakeholders. D) They behave unethically and illegally and do all they can to prevent knowledge of their behavior from reaching other organizational stakeholders and society at large.

Q: Why do variable costs per unit stay constant no matter how many units are produced while fixed costs per unit decline as volume increases?

Q: Which of the following statements is most likely to be true regarding the managers who take a proactive approach to social responsibility? A) They are most likely to behave unethically and illegally and do all they can to prevent knowledge of their behavior from reaching other organizational stakeholders and society at large. B) They implement formal, serial and collective socialization tactics. C) They are willing to use organizational resources to promote the interests not only of stockholders but of the other stakeholders. D) They encourage the use of those socialization tactics that lead to an individualized role orientation.

Q: Why is the net present value of a stream of payments less than the sum of the same stream of payments?

Q: A CEO of a company feels that he is only responsible for following the law and standard business practices. His company will most likely ________. A) take an obstructionist stance on social responsibility B) take a defensive stance on social responsibility C) use socialization tactics that lead to an individualized role orientation D) commit unethical acts

Q: Using the sum-of-the-years-digits method for an asset to be depreciated over 5 years and assuming a zero salvage value, what proportion of the asset's value can be depreciated in the first year?

Q: Managers adopting the ________ approach to social responsibility agree that organizational members ought to behave legally and ethically. These managers want to make choices that are reasonable in the eyes of society and want to do the right thing when called on to do so. A) integrative B) obstructionist C) accommodative D) associative

Q: Samantha is a manager in a company. She believes strongly in following existing laws, but when making ethical choices, she puts the claims of the shareholders above the other stakeholders. Her stance on corporate social responsibility could best be described as ________. A) defensive B) obstructionist C) accommodative D) proactive

Q: What are the five methods of depreciation discussed in the textbook?

Q: Your company is taking out a loan for $100,000. The interest rate is 10%, discounted and a 10% compensating balance is required. What is the effective interest rate for this loan?

Q: Organizations using which of the following approaches have the lowest level of commitment to social responsibility? A) accommodative approach B) proactive approach C) defensive approach D) obstructionist approach

Q: You are planning an investment in equipment that will cost $100,000 but which will reduce labor costs by $42,000 per year. If your cost of capital is 30 percent and the useful life of the equipment is ten years, what is the net present value of this investment?

Q: The term "________" refers to a manager's duty or obligation to make decisions that nurture, protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole. A) rite of enhancement B) organizational citizenship C) social responsibility D) rite of integration

Q: A manager in a company believes that it is ok to give illegal bribes to city officials to get favorable decisions. His stance on corporate social responsibility could best be described as ________. A) defensive B) obstructionist C) accommodative D) proactive

Q: You must make an investment decision based on future payoffs of $10,000 per year for each of the next ten years. Which of the following is the present value of this future stream of payoffs using a discount rate of 5 percent? A. $77,217 B. $67,740 C. $59,508 D. $56,800 E. $51,687

Q: Which of the following statements is most likely to be true regarding organic organizational structures? A) Organic structures are taller than mechanistic structures. B) Organic structures encourage a culture in which predictability and stability are the desired end states. C) In organic structures people are encouraged to be creative and to take risks. D) Organic structures are highly centralized.

Q: You must make an investment decision based on a payoff of $50,000 ten years in the future. Which of the following is the present value of this future payoff using a discount rate of 16 percent? A. $34,000 B. $22,729 C. $19,578 D. $14,244 E. $11,334

Q: Which of the following statements is true regarding mechanistic organizational structures? A) Mechanistic structures are highly decentralized. B) Mechanistic structures encourage a culture in which innovation and flexibility are the desired end states. C) Mechanistic structures are flat. D) Mechanistic structures give little personal autonomy to employees.

Q: Which of the following statements about property rights is true? A) In an organization top managers have the strongest property rights. B) Distribution of property rights has no effect on the instrumental values in the organization. C) The property rights are the rights of the customers to demand compensation when a product purchased by them is faulty. D) The distribution of property rights to different stakeholders determines how effective an organization is.

Q: You must make an investment decision based on a payoff of $100,000 six years in the future. Which of the following is the present value of this future payoff using a discount rate of 8 percent? A. $100,000 B. $87,598 C. $63,017 D. $54,045 E. $51,855

Q: Pension and severance pay are the examples of the property rights given to the ________. A) suppliers B) customers C) workforce D) shareholders

Q: Under a contract we will receive $12,000 per year for ten years. Starting today, if we invest this annuity each year at an interest rate of 24 percent, compounded annually, which of the following is the value of the principal plus interest in ten years? A. $120,000 B. $195,909 C. $212,990 D. $248,798 E. $379,721

Q: Under a contract we will receive $5,000 per year for five years. If we invest this annuity each year and receive an interest rate of 12 percent, compounded annually, which of the following is the value of the principal plus interest in five years? A. $25,000 B. $31,764 C. $34,857 D. $35,401 E. $40,098

Q: Golden parachutes are property rights generally given to the ________. A) managers B) suppliers C) shareholders D) customers

Q: If $100,000 is invested today at an interest rate of 24 percent, compounded annually, which of the following is the value of principal plus interest in ten years? A. $2,078,000 B. $1,180,600 C. $859,442 D. $568,890 E. $506,008

Q: The distribution of property rights in an organization influences the ________. A) stance of the organization on the corporate social responsibility B) individual ethics of the employees C) instrumental values that shape employee behavior D) richness of the organization's environment

Q: If $10,000 is invested today at an interest rate of 9 percent, compounded annually, which of the following is the value of principal plus interest in five years? A. $10,000 B. $12,348 C. $15,386 D. $16,770 E. $17,980

Q: What are golden parachutes? A) the rights of the managers to lay off employees if they are not performing well B) the rights of the customers to receive compensation if the product bought by them is faulty C) rights of the managers to receive large sums of money if they are fired when their company is taken over D) the rights of the workers to receive compensation if they are injured on the job

Q: Using the formula from Supplement A that computes the cost of common stock as part of figuring the cost of capital, which of the following is the cost of common stock percentage to be applied to the cost of capital calculation if a company's dividend per share is $10, net value is $200 and the dividend growth rate is 50 percent? A. 75 percent B. 65 percent C. 55 percent D. 50 percent E. 45 percent

Q: In an organization, who has the strongest property rights? A) shareholders B) top managers C) employees D) customers

Q: Using the formula from Supplement A that computes the cost of common stock as part of figuring the cost of capital, which of the following is the cost of common stock percentage to be applied to the cost of capital calculation if a company's dividend per share is $30, net value is $120 and the dividend growth rate is 20 percent? A. 45 percent B. 25 percent C. 20 percent D. 19.5 percent E. 16 percent

Q: Which of the following terms refers to the authority that an organization gives to its members to receive and use organizational resources? A) enhancement rights B) patents C) property rights D) licenses

Q: Which of the following is not a usual source of financing for investments in operational assets? A. Short-term debt B. Long-term debt C. Equity securities D. Cash on hand or on deposit E. Common stock

Q: Cultural values of the organization are most likely to be derived from ________. A) the practices followed by the competitors B) the beliefs of the founders C) the preferences of the customers D) the opinions of the industry experts

Q: In Supplement A on financial analysis, investment decisions in operations are grouped into six general categories. Which of the following is not one of the six general categories? A. The purchase of new equipment decisions B. The purchase of new facilities decisions C. Investing cash in short-term securities D. Addition of a product or product line decisions E. Lease-or-buy decisions

Q: One manufacturing company in the aluminum industry has an innovative culture, and a competitor from the same country has a conservative culture. What could account for this difference in organizational culture? A) stance on social responsibility B) environmental richness C) organizational structure D) societal ethics

Q: In Supplement A on financial analysis, investment decisions in operations are grouped into six general categories. Which of the following is one of the six general categories? A. Make-or-buy decisions B. Make-or-lease decisions C. Using overtime to increase output D. Adopting activity-based-costing E. Pricing decisions

Q: Which of the following is a source of organizational culture? A) environmental dynamism B) organizational specialization C) property rights D) environmental richness

Q: Which of the following depreciation methods attempts to gear depreciation charges to actual use and thereby coordinate expense charges with productive output more accurately? A. Straight-line B. Declining-balance C. Sum of Years' Digits D. Depreciation-by-use E. All of the above

Q: Which of the following is used to convey cultural values to organizational members? A) annual reports B) organizational stories C) red herring prospectus D) BCG matrix

Q: Which of the following depreciation methods achieves an accelerated depreciation in decreasing the asset's value by reducing its book value by a constant percentage each year? A. Straight-line B. Declining-balance C. Constant depreciation D. Depreciation-by-use E. Sum of Years' Digits

Q: A high-tech company has a casual dress code. This dress code is considered a part of the organizational ________. A) theory B) structure C) design D) language

Q: A company uses the straight-line method of depreciation to determine the annual amount of an asset's value to depreciate. If the cost of the item is $250,000, the salvage Value is $10,000 and the estimated useful life is 8 years, which of the following is the annual amount to be depreciated? A. $10,000 B. $30,000 C. $32,500 D. $50,000 E. $240,000

Q: The socialization programs used in companies like 3M and Microsoft recognize their most creative people with special job titles. This is an example of a rite of ________. A) differentiation B) passage C) responsibility D) integration

Q: A company uses the straight-line method of depreciation to determine the annual amount of an asset's value to depreciate. If the cost of the item is $100,000, the salvage value is $10,000 and the estimated useful life is 5 years, which of the following is the annual amount to be depreciated? A. $100,000 B. $22,000 C. $20,000 D. $18,000 E. $15,000

Q: Rites of enhancement ________. A) allow an organization to change its norms and values B) motivate organizational members to be committed to the company's norms and values C) build common bonds between organizational members D) encourage members to learn and internalize the organization's norms and values

Q: Which of the following depreciation methods determine the annual amount to be depreciated by using the formula: [(Cost Salvage value)/Estimated useful life]? A. Straight-line B. Sum-of-the-years'-digits C. Declining-balance D. Depreciation-by-use E. Life-line

Q: The purpose of rites of passage is to ________. A) encourage members to learn and internalize the organization's norms and values B) motivate organizational members to be committed to the company's norms and values C) build common bonds between organizational members D) allow an organization to change its norms and values

Q: Which of the following is not a commonly used method of depreciation? A. Straight-line B. Declining-balance C. Double-declining-balance D. Expected residual value E. Depreciation-by-use

Q: Triad Systems, every year, gives the Grindstone Award to those individuals who most consistently demonstrate initiative, focus, dedication, and persistence. This is an example of a rite of ________. A) enhancement B) passage C) integration D) responsibility

Q: Rites of ________ publicly recognize and reward employees' contributions. A) responsibility B) integration C) enhancement D) passage

Q: Which of the following is a commonly used method of depreciation? A. Linear depreciation B. Sum-of-the-years'-digits C. Expected residual value D. Lesser of cost or market E. Cost of goods sold

Q: A company invites all its employees to a Christmas party. This is an example of a rite of ________. A) passage B) integration C) enhancement D) responsibility

Q: Which of the following items is a variable cost? A. Maintenance expense B. Rent C. Property taxes D. Depreciation E. Activity cost

Q: Rites of ________ mark an individual's entry to, promotion in, and departure from the organization. A) passage B) enhancement C) responsibility D) integration

Q: Which of the following cost categories includes any expense that is not incurred if an investment is made but that must be incurred if the investment is not made? A. Sunk costs B. Avoidable costs C. Opportunity costs D. Variable costs E. Fixed costs

Q: Activity-based costing allocates traceable overhead to product cost based on the amount of an activity required to produce a product.

Q: Rites of ________ build and reinforce common bonds between organizational members. A) responsibility B) integration C) enhancement D) passage

Q: Activity-based costing is an attempt by accountants for manufacturing people to take overhead costs into account when making decisions.

Q: Which of the following is most likely to be a disadvantage of the institutionalized role orientation? A) Members produce low quality outputs. B) Members have difficulty responding to changing conditions. C) Managers have difficulty creating an ethical culture. D) Members behave in unpredictable ways.

Q: A productive asset becomes obsolete when it reaches the end of its estimated productive life.

Q: When new soldiers are recruited in the military, they go through preestablished drills and learning experiences. This is an example of a(n) ________ socialization tactic. A) informal B) sequential C) disjunctive D) variable

Q: Avoidable costs can reduce the cost of a new investment.

Q: Divestiture involves ________. A) informing newcomers about the sequence in which they will perform new activities B) giving newcomers negative social support C) separating newcomers from existing organizational members during the learning process D) existing organizational members acting as role models and mentors for newcomers

Q: Avoidable costs are those costs associated with invoices that you choose not to pay.

Q: Disjunctive socialization tactics ________. A) require newcomers to develop their own way of behaving instead of following role models B) separate newcomers from existing organizational members during the learning process C) provide newcomers with common learning experiences designed to produce a standardized response to a situation D) give newcomers precise knowledge of the timetable associated with completing each stage in the learning process

Q: Internal rate of return refers to the corporate tax rate imposed by the internal revenue service.

Q: Which of the following socialization tactics involves providing newcomers with role models and mentors? A) serial B) disjunctive C) informal D) random

Q: The internal rate of return may be defined as the interest rate that equates the present value of the income stream with the cost of an investment.

Q: Which of the following socialization tactics leads to an individualized role orientation? A) formal B) serial C) disjunctive D) collective

Q: The payback method ranks investments according to the time required for each investment to return earnings equal to the cost of the investment.

Q: Which of the following socialization tactics leads to an institutionalized role orientation? A) informal B) serial C) disjunctive D) random

Q: In a net present value (NPV) analysis we always select the alternative choice that provides the smallest NPV of cash inflows.

Q: Which of the following socialization tactics is most likely to be employed by an organization if it wants to achieve innovation and flexibility? A) sequential, serial, collective B) informal, random, investiture C) fixed, serial, formal D) formal, collective, sequential

Q: The term "discounted cash flow" refers to the total stream of payments that an asset will generate in the future discounted to the present time.

Q: Which of the following socialization tactics is most likely to be employed by an organization if it wants to achieve stability and predictability? A) variable, disjunctive, investiture B) random, informal, investiture C) sequential, serial, divestiture D) random, variable, disjunctive

Q: Long-term debt to finance investment decisions is normally provided through the sale of corporate bonds.

Q: A computer company does not have an established sequence of steps for socializing newcomers. Training is tailored to individual needs. Which of the following socialization tactics is this company using? A) random B) formal C) collective D) fixed