One of the Main Lessons from the Chapter 5 Case

question 92

Multiple Choice

One of the main lessons from the Chapter 5 case comparing Google and Microsoft and measuring overall firm performance is that:

• A) Competitive performance differences should be measured by using a variety of evaluation tools.
• B) Qualitative measurements are superior to quantitative measurements when evaluating firm differences.
• C) Management should utilize just a few measurement tools in order to get exact information when evaluating firm differences.
• D) The type of measurement tool used by management is dependent on which area of the firm is being measured.

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Definitions:

Bank Loan

A sum of money borrowed from a bank that needs to be repaid with interest.

Accrual

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Spontaneous Financing

Financing that arises naturally from the normal operations of a company, such as trade credit that increases automatically with increases in sales.

Accrued Depreciation

The total amount of depreciation expense that has been charged against a fixed asset since it was put into use, contributing to its reduced book value.