In Reality, It Is_______ That Managers Flip a Coin to Make

question 98

Multiple Choice

In reality, it is_______ that managers flip a coin to make decisions; but actual randomness______ desirable in certain situations.

• A)common; can
• B)rare; cannot
• C)common; cannot
• D)rare; can

Evaluate the assumptions underlying cost-volume-profit analysis and their impact on the reliability of the analysis.

Identify and classify the three common cost behavior classifications.

Understand the graphical representation of various cost behaviors such as fixed, variable, and mixed costs.

Determine appropriate activity bases for specific costs.

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Definitions:

Myron Gordon

An economist best known for developing the Gordon Growth Model, which is used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate.

Burton Malkiel

An American economist and writer, most famous for his classic finance book "A Random Walk Down Wall Street."

Dividend Discount Model

A valuation method used to estimate the value of a stock by discounting predicted dividends to their present value.

Capital Gains

The profit from the sale of an asset or investment when the sale price exceeds the purchase price.