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The Following Information Relates to Questions

question 27

Multiple Choice

The following information relates to questions
Viola Ltd has granted each of its 10 senior executives a choice between receiving a cash payment equivalent to 1000 shares or receiving 1200 share. The grant is conditional on the completion of three years’ service with the company. If the share alternative is chosen, the shares must be held for two years after vesting date. At grant date the company’s share price is £25 per share. At the end of years 1, 2 and 3 the share price is £27, £28 and £30 respectively. The company does not expect to pay dividends in the next three years. After taking into account the effect of post-vesting transfer restrictions the company estimates the grant-date fair value of the share alternative is £24 per share.
-What is the liability component at the end of year 1?

Understand the allocation of operating expenses and support department charges in profit centers.

Recognize the financial measures used to gauge a manager's performance in a profit center.

Distinguish between direct and indirect expenses and their impact on departmental performance.

Understand the concept of operating income, both before and after support department allocations.

Definitions:

Research Methods

The various strategies, techniques, and tools used by scientists to gather and analyze data.

Scientific Approach

A method of research whereby a problem is identified, relevant data is gathered, a hypothesis is formulated, and the hypothesis is empirically tested.

Precision

The quality of being exact, accurate, and careful about details.

Intolerance Of Error

A psychological state or organizational culture where mistakes are not tolerated, leading to high stress and potential stifling of creativity or learning.