All of the Following Methods Can Be Used to Estimate

question 95

Multiple Choice

All of the following methods can be used to estimate the cost of equity except:

• A)Like debt and preferred stock,cash flows from common equity are fixed.
• B)Firms have two sources of common equity,retained earnings and new stock issues,and thus two costs of common equity.
• C)From the shareholders' perspective,the opportunity cost of retained earnings is the return the shareholders could earn by investing the funds in assets whose risk is similar to that of the firm.
• D)If the firm cannot invest its retained earnings to achieve a sufficient risk-adjusted return,shareholders would be better off receiving 100 percent of its net income as dividends.
• E)All of the above statements are correct.

Interpret the results of standard costing reports and use this information for managerial decision-making.

Recognize the limitations and challenges of implementing a standard costing system.

Understand the concepts of standard costing, including standard quantities, rates, and cost variance analysis.

Calculate and interpret variances in direct materials, direct labor, and manufacturing overhead.

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Definitions:

Instrumentality

The perceived relationship between performance and the attainment of desired outcomes or rewards.

Word Processing

The use of computer software to enter, edit, format, and output text.

Expectancy Model

A psychological theory stating that an individual’s motivation is based on the expectation of desired outcomes and the value they place on those outcomes.

Errors

Mistakes or inaccuracies in actions, calculations, or judgments.