Portfolio Management

question 43

Multiple Choice

Portfolio management:

• A) may place too much emphasis on easy-to-compare quantitative criteria.
• B) identifies which opportunities should be supported, "milked," or sold off.
• C) tends to overemphasize short-run profitability and return on investment.
• D) treats products or SBUs as though they were stock investments.
• E) All of the above are true.

---

Definitions:

Factory Overhead Rate

A calculation used to allocate all indirect manufacturing costs to produced goods.

Multiple Production Department Factory Overhead Rate

A method to allocate factory overhead costs to multiple production departments based on specific measures such as labor hours or machine hours.

Fabrication Department

A specialized division within a company where raw materials are converted into components or products through various processes.

Assembly Department

A segment within a manufacturing facility where components are assembled into final products or where significant assembly work takes place.