Uptown Promotions Has Three Divisions

question 57

Multiple Choice

Uptown Promotions has three divisions.As part of the planning process,the CFO requested that each division submit its capital budgeting proposals for next year.These proposals represent positive net present value projects that fall within the long-range plans of the firm.The requests from the divisions are $4.2 million,$3.1 million,and $6.8 million,respectively.For the firm as a whole,the management of Uptown Promotions has limited spending to $10 million for new projects next year.This is an example of:

• A)scenario analysis.
• B)sensitivity analysis.
• C)determining operating leverage.
• D)soft rationing.
• E)hard rationing.

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Definitions:

Cervical Vertebrae

The uppermost seven vertebrae in the vertebral column, located in the neck, designated C1 through C7.

Xiphoid Process

the small, cartilaginous process extending from the lower part of the sternum, which becomes ossified in adults.

Sternum

The long, flat bone located in the central part of the chest, connecting with the ribs via costal cartilages to form the front part of the rib cage.

False Rib

Refers to the ribs that do not directly attach to the sternum but are connected to the true ribs above them.