About 10 Years Ago You Founded an Energy Company That

question 88

Multiple Choice

About 10 years ago you founded an energy company that operates as a privately-held corporation with only limited stock ownership.You are considering selling stock to the public for the first time through an initial public offering.All of the following are disadvantages for taking a company public :

• A)going public is costly.
• B)financial reports would have to be made available to the public.
• C)you would get an influx of cash that doesn't have to be paid back.
• D)you would be responsible to shareholders who would expect favorable short-term performance.

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Definitions:

Static Budget

A budget based on a set level of activity or volume that does not adjust over the period for actual activity levels.

Standard Cost

A pre-determined estimate of the cost to produce a single unit or a number of units during a specific period.

Machine Hours

A measure of production time, calculating the total hours that machines are operated in the manufacturing process.

Standard Cost System

An accounting system that uses cost estimates for raw materials, labor, and overhead to set prices and measure efficiency.