Division T of Clocker Company Makes a Timer Which It

question 14

Multiple Choice

Division T of Clocker Company makes a timer which it sells for $30 to outside customers. The division has supplied the following data concerning the timer:

Division S of Clocker Company is currently buying 5,000 similar timers each month from an overseas supplier at $27 each. Division S would like to acquire its timers from Division T if the price is right.
-Suppose Division T is operating at capacity and can sell all of the timers it produces to outside customers at its usual selling price. If Division T meets the price of the overseas supplier and sells 5,000 timers to Division S each month, the effect on the monthly net operating income of the company as a whole will be:

• A)increase of $15,000
• B)decrease of $15,000
• C)decrease of $60,000
• D)increase of $10,000

Identify the methods and importance of scenario, sensitivity, and simulation analysis in assessing project outcomes.

Explain the effects of capital rationing on project selection and the notion of soft and hard rationing.

Grasp the principles of different capital budgeting techniques and their application in financial decision-making.

Understand the strategic options available to firms in the context of new investments and project management.

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Definitions:

Task-oriented

Focusing primarily on completing tasks efficiently and effectively, usually with specific goals and processes in mind.

LPC

The Least Preferred Co-worker scale, a tool used in Fiedler's contingency model to determine an individual's leadership style based on how they view the least favorable person to work with.

Directive Behaviour

Refers to a leadership style where instructions, orders, and expectations are clearly communicated by leaders to their subordinates.

Initiating Structure

A leadership behavior that emphasizes the organization of work, roles, and tasks to achieve set objectives and goals.