Application of Decision Making: a Contingency Approach

question 122

Multiple Choice

Application of Decision Making: A Contingency Approach
It seems that all Dave accomplishes is making decisions. Every time he turns around, someone wants him to decide on one more thing. Just today the secretary came in and asked if she could reorder paper for the fax machine. Somehow that seemed like a decision he really did not need to deal with. If he could avoid those types of decisions, then when the foreman came in with the news of a major piece of equipment that needs repair, in which the repair bill will be almost as much as a new machine, Dave could focus more time and attention on the more complicated issues.
-The decision by the secretary to re- order paper from the same supplier first week of every month is an example of

• A)a risk.
• B)a non- programmed decision.
• C)suboptimization.
• D)a programmed decision.

Identify and evaluate a firm's options in response to a negative EFN (External Financing Needed).

Understand and define key financial ratios such as retention ratio (plowback ratio) and dividend payout ratio, and their significance in financial management.

Comprehend the importance of capacity utilization in compiling pro forma statements.

Analyze factors influencing a firm’s choice between internal and sustainable rates of growth.

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Definitions:

Bond Premiums

The amount by which the market price of a bond exceeds its face value, often due to interest rates falling after the bond issuance.

Bond Indenture

A legal contract outlining the terms and conditions under which a bond is issued, including the interest rate and maturity date.

Face Amount

The nominal value of a financial instrument as stated on the face of the document, not including interest or earnings.

Contract Rate

The agreed-upon rate for financial transactions or payments defined in a contractual agreement.