Managers at Avalon Computing Work in a Fast-Paced Business Environment

question 94

Multiple Choice

Managers at Avalon Computing work in a fast-paced business environment. To make higher-quality decisions in this environment, Avalon's managers do not use traditional tactics, e.g., relying on old data, long-range planning, and futuristic forecasts. Instead, they focus on real-time information, by constantly monitoring daily operating measures such as work in process rather than checking periodically the traditional accounting-based indicators such as profitability. In this manner, Avalon's managers strive to overcome the barrier to effective decision making known as

• A)illusion of control.
• B)framing effects.
• C)discounting the future.
• D)time pressures.
• E)social realities.

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Definitions:

Lessor

An entity that rents out an asset or property to another party, known as the lessee.

Incremental Annual Cash Flow

Incremental Annual Cash Flow is the additional cash flow an enterprise generates from taking on a new project or investment, over its existing cash flow.

MACRS Depreciation

A method of depreciation used for tax purposes in the United States which allows businesses to recover their investments in certain property over a specified life.

Lease

An agreed contract in which the lessor permits the lessee to utilize an asset for a set duration in return for regular payments.