D I S C U S S I O N Q U E S T I O N S complete solution correct answer key

Question: #6473

Is Figure 11–1 a realistic model of the evaluation and control process? (page 330) 2. What are some examples of behavior controls? Output controls? Input controls? 3. Is EVA an improvement over ROI, ROE, or EPS? 4. How much faith can a manager place in a transfer price as a substitute for a market price in measuring a profit center’s performance? 5. Is the evaluation and control process appropriate for a corporation that emphasizes creativity? Are control and creativity compatible?

D I S C U S S I O N Q U E S T I O N S 1.

Why should you begin a case analysis with a financial analysis? When are other approaches appropriate? 2. What are common-size financial statements? What is their value to case analysis? How are they calculated? 3. When should you gather information outside a case by going to the library or using the Internet? What should you look for? 4. When is inflation an important issue in conducting case analysis? Why bother? 5. How can you learn what date a case took place

Solution: #6489

D I S C U S S I O N Q U E S T I O N S complete solution correct answer key

Discussion Questions 1 1. No the figure is not a realistic model. It seems to be out of theory and real world functionalities are not built in. The model does not discount long term performance also does not show any signs of future scalability. 2. Behavioral controls are very difficult to achieve. The inputs and outputs are very important and the output is very different as it based on behavior. Behavioral finance have been a very interesting development and things have not moved much far in this field. 3. EVA cannot be considered to be an improvement over the traditional approaches of ROI, ROE and EPS. It is a new approach in which one tries to understand the economic value added over the period of time. 4. Transfer pricing is probably one of the biggest tax issues facing taxing authorities. Transfer pricing involves allocating revenues and costs between countries in order to create the best possible tax situation for a multinational company. 5. Enterprises continue to seek risk-appropriate authentication methods that balance assurance and accountability. While a small number of nati...