The form of economics most relevant to managerial decision-making within the firm is:
Answer
Selected Answer: microeconomics
Correct Answer: microeconomics
Question 2
4 out of 4 points
A Real Option Value is:
Answer
Selected Answer: An opportunity to implement cost savings or revenue expansion in a flexible business plan.
Correct Answer: An opportunity to implement cost savings or revenue expansion in a flexible business plan.
Question 3
4 out of 4 points
In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.
Answer
Selected Answer: profits (cash flows)
Correct Answer: profits (cash flows)
Question 4
4 out of 4 points
Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:
Answer
Selected Answer: maximize total costs
Correct Answer: maximize total costs
Question 5
4 out of 4 points
Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
Answer
Selected Answer: requiring officers to own stock in the company
Correct Answer: requiring officers to own stock in the company
Question 6
4 out of 4 points
To reduce Agency Problems, executive compensation should be designed to:
Answer
Selected Answer: create incentives so that managers act like owners of the firm.
Correct Answer: create incentives so that managers act like owners of the firm.
Question 7
4 out of 4 points
Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?
Answer
Selected Answer: common stock
Correct Answer: common stock
Question 8
4 out of 4 points
A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
Answer
Selected Answer: marginal costs
Correct Answer: marginal costs
Question 9
4 out of 4 points
The standard deviation is appropriate to compare the risk between two investments only if
Answer
Selected Answer: the expected returns from the investments are approximately equal
Correct Answer: the expected returns from the investments are approximately equal
Question 10
4 out of 4 points
The level of an economic activity should be increased to the point where the ____ is zero.
Answer
Selected Answer: net marginal benefit
Correct Answer: net marginal benefit
Question 11
4 out of 4 points
The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:
Answer
Selected Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk
Correct Answer: the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk
Question 12
4 out of 4 points
Generally, investors expect that projects with high expected net present values also will be projects with
Answer
Selected Answer: high risk
Correct Answer: high risk
Question 13
4 out of 4 points
Songwriters and composers press music companies to lower the price for music downloads because
Answer
Selected Answer: songwriter royalties are a percentage of sales revenue
Correct Answer: songwriter royalties are a percentage of sales revenue
Question 14
4 out of 4 points