If Inaccurate Cost Estimates Are Too Low, Then a Company

question 165

True/False

If inaccurate cost estimates are too low, then a company may unknowingly reward a manager for poor performance.

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Definitions:

Accounting Profits

Accounting profits represent the financial gains of a business as calculated by subtracting total explicit costs from total revenues, according to standard accounting practices.

Industry Entry

The act or process of starting a new business or expanding into a new segment within a particular market or industry.

Average Product

The total output produced by a firm divided by the number of inputs used to produce that output.