Management Notes

Reference Notes for Management

Which of the following Statements is False?

Which of the following statements is False?

Fianancial Management

Questions True False
Financial leverage is calculated as ( Sales -Variable cost ) / ( Earnings before Interest and tax -Interest ) False
Earnings per share is of great significance to an operator on the stock exchange buying and selling the shares. False
Capital structure determines the level of current assets that is required to maintain the firm’s operational level. False
Determining when a supplier should be paid is a capital structure decision. False
Establishing the accounts receivable policies is a capital structure decision. False
Capital structure determines how much risk is associated with the future cash flows of a project. False
Deciding if a new project should be accepted is a working capital decision. False
When evaluating a project in which a firm might invest, the size but not the timing of the cash flows is important. False
Maximization of the current earnings of the firm is the main goal of the financial manager. False
The primary goal of a financial manager should be to maximize the value of shares issued to new investors in the corporation. False
The primary goal of financial management is to minimize the corporate tax liability. False
Control of the firm ultimately rests with board of directors. They elect the management, who, in turn, lead the company. False
The Sarbanes-Oxley Act was intended to increase corporate social responsibility of publicly listed organizations. False
Unethical behaviour does not impact volatility of the stock markets. False
When owners are managers (such as in a sole proprietorship), a firm will have agency costs. False
More stock trading in the U.S. occurs in over-the-counter markets rather than onorganized exchanges False
Electronic Communications Networks apply technology to make organized exchangesmore efficient and speedy. False
All stocks pay dividends, as that is the only way an investor can profit from holding stock. False
The Dow Jones Industrial Average is the broadest and best indicator of the stock market’sday-to-day performance. False
About half of new equity issues are preferred stock. False
A stock’s market value will be higher the higher is the investor’s required rate of return. False
A firm should continue to increase its level of capital investment so long as the rate of return on the least profitable investment project that the firm undertakes is less than the marginal cost of capital. False
In calculating net cash flows, depreciation is treated as a cost. False
In general, a firm should undertake any project that has an internal rate of return that is positive. False

Operations Management

Questions True False
Operations management is concerned only with the day-to-day operations of a firm’s productive systems. False
Operations, Marketing, and Finance function independently of each other in most organizations. False
The Value of Outputs is measured by the prices organizations set for their good or services. False
Organizational Strategy should be aligned with the operational strategies in business organizations. False
Design capacity is the maximum capacity given product mix, scheduling difficulties, and other does of reality (NORMAL operating conditions). False
MAD is equal to the square root of MSE. False
Qualitative forecasting methods are subjective and consistent. False
For the exponential forecasting method, less weight to recent data results in less responsive to actual data and less smooth forecasts. False
In the basic EPQ model, the purchase cost per unit of the item must be required in order to calculate the optimal production quantity for the item. False
For the quantity discount model, the optimal order quantity must be a feasible EOQ quantity for a given unit price. False
The performance measure Pn in the waiting lines analysis means the probability of n customers in line. False
For the EPQ inventory model, the maximal on-hand inventory level is larger than the production quantity in each production cycle. False
For any given activity in a project, the slack time is the difference between EF (latest finishing time) and LS (earliest starting time). False
Services are more tangible, more customized, and less storable than most products. False
Staff schedules identify who and how many employees will be working, and when. False
Materials management involves the flow of materials inside of the production facility only. False
JIT production systems normally require large amounts of “safety stock” to be maintained in a firm’s warehouse. False
The relationship between business strategy and operations tends to vary widely between manufacturing companies and service firms. False
A detailed schedule will indicate how many employees will be working on a given shift. False
A value chain includes an entire network of firms with the exception of those responsible for transportation. False
Because supply chain strategy is based on the collective effort of a number of firms, no one firm in the chain gains a competitive advantage. False

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