A Disadvantage of the High-Low Method to Estimate a Cost

question 57

Multiple Choice

A disadvantage of the high-low method to estimate a cost function is ________.

• A) historical data may hide past inefficiencies
• B) historical data may be obsolete
• C) historical data may not reflect changes made in the organization
• D) all of the above

Recognize the significance of call, sinking fund, and convertible features in bonds.

Understand the reasons behind bond ratings and their impact on investor perceptions and bond pricing.

Analyze the term structure of interest rates and its components.

Appreciate the effect of inflation on bond returns and the Fisher effect.

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Definitions:

Fundamental Attribution Error

Overestimates internal factors and underestimates external factors as influences on someone’s behavior.

Situational Factors

External conditions or events that influence an individual's behavior or outcomes, often beyond their control.

Personal Factors

Characteristics inherent to an individual that influence behavior and performance, such as personality traits, values, and abilities.

Operant Conditioning

Is the control of behavior by manipulating its consequences.