What disadvantages do you see if the chief executive officer (CEO) is primarilyconcerned with short-term ROI?

Q: Cost accounting logic can lead managers to keep their resources busy all the time, increasing…

A: Cost accounting deals with allocating costs to several cost objects such as products, services, and…

Q: You are running a company with two divisions. One division is high risk and the other division is…

A: Risk - Return Relationship: As per the risk-return relationship or risk-return tradeoff, the higher…

Q: Which of the following is not a criticism of using ROI as the only performance measure?

A: ROI stands for Return on investment that shows the return earned by the company on the capital…

Q: What is the biggest disadvantage of using ROI to evaluate investment centers?

A: Return on Investment: Under return on Investment, the investment opportunity with the highest rate…

Q: Does using cost volume profit sensitivity analysis have any drawbacks or possible negative impacts…

A: Cost volume profit analysis is used to control or monitor a sensitive analysis which depicts changes…

Q: Company X sees a disruption in its supply chain at the same time it sees a decrease in customer…

A: A supply chain network is an organization of individuals, associations, and exercises that move an…

Q: What does it mean to use the DuPont model to help explain a decrease in ROI?

A: Introduction: DuPont analysis is done to find out the various drivers that account for the return on…

Q: (1) Why are leverage points in a system so critical tounderstand? (2) Why should a manager in…

A: Disclaimer: “Since you have asked multiple question, we will solve the first question for you. If…

Q: Most organizations use residual income instead of return on investment (ROI) as a performance…

A: The Following statement is True because Residual Income is much better than Return on Investment…

Q: What questions should managers answer when considering outsourcing?

A:

Q: Why does the high cost of the system negatively impact the organization's bottom line?

A: The question is based on the concept of bottom line of a company and its relationship with high cost

Q: What are accruals? How much control do managers have overaccruals?

A: Accruals: Accruals are the revenues that are earned but not received, and expenses that are incurred…

Q: Should a firm have a firm grasp of the concepts of differential cost, opportunity cost and sunk cost…

A: Costs: It refers to the monetary value of expenditures incurred for carrying out operating and…

Q: Suppose the current assets of a company decrease over time while all else remains unchanged, then…

A: Meaning of Return on Investment  Return on investment (ROI) is performance measure used to evaluate…

Q: In what way can the use of ROI as a performance measure for investment centers lead to bad…

A: ROI:   It is a measure on the amount of return on a particular investment with respect to the…

Q: In what ways might using ROI as a performance indicator for investment centers lead to poor…

A: ROI: It measures the amount of return on a specific investment to the cost of the investment. The…

Q: How might managerial incentives affect the analysis of earnings persistence?

A: Analysis of earnings persistence Earning persistence which was indicating that the total earning…

Q: Explain why, for large corporations, we should expect a low pay-performance relationship

A: In accounting pay performance relationship refers to the relationship between pay level of employees…

Q: How would non-financial performance indicators help to improve the performance of the company?…

A: Introduction: In its most basic form, non-financial performance metrics give information on a…

Q: Why might a manager focused solely on accounting numbers miss opportunities for future benefits?

A: The accounting manager oversees the accountant. Create systems and processes for analyzing and…

Q: Criticisms of return on investment as the only performancemeasure include:a. ROI focuses on…

A: Return on investment is a measure used compare the benefit received by the investors when compared…

Q: Explain and give an example as to how a manager can manipulate the return on investment figure in…

A: Return on Investment The profit or loss received by an investor on investing a particular amount in…

Q: Why are financial ratios so critical to managers when evaluating business performance

A: Financial Ratios: Financial ratios are used to evaluate firms' comparative strength by doing…

Q: Which of the following best describes the potential impact of business risk on Earnings Quality?…

A: Earnings Quality: The earnings quality or quality of earnings refers to the reliability with which a…

Q: The use of market price in internal transfers, generally, provides managerial incentive and leads to…

A: Market price refers to the price that is prevailing in the market in normal conditions considering…

Q: Agency theory suggests that one way to motivate managers to act in the best interests of the…

A: Here discuss about the details of the agency theory which act against disputes and problems which…

Q: How may using ROI as a success indicator for investment centers lead to poor decisions? How does the…

A: ROI: It calculates the amount of return on a particular investment about the investment's cost. The…

Q: how do compensation plans, including bonus structures, drive behavior?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Why is customer-profitability analysis an important topic to managers?

A: Customer profitability analysis helps management in allocating profitability to each customer, but…

Q: how is focusing on costumer value changing managerial accounting?

A: Customer is the person or firm which procures the goods or avails the services from the business.…

Q: Why might a manager exhibit a behavioral tendency to inappropriately consider sunk costs in making a…

A: Sunk Costs: Sunk costs are those costs incurred in the past and it cannot be changed unless if any…

Q: size

A: Ans. A large company is many a times benefitted because of its large scale of business operations…

Q: Which of the followings is NOT an advantage of financial institutions in consumption smoothing? A.…

A: Financial Institutions Institutions involved in financial transactions such as lending and borrowing…

Q: Provide 2 examples of situation where the use of ROI can lead to decisions which may harm the future…

A: Return on investment: Return on investment (ROI) or return on costs is a ratio between net income…

Q: Short-term thinking can be disastrous for a business. What indicators are there to show that…

A: The measures that are used by the organization to check the financial health or the financial…

Q: Which of the following is not an advantage of participative budgeting?a. It encourages budgetary…

A: Participatory budgeting involves lower-level management personnel in the creation of the budget.…

Q: In what way can the use of ROI as a performance measure for investment centers lead to baddecisions?

A: Return On Investment (ROI): It is a measure on the amount of return on a particular investment with…

Managing Agency Conflict

Conflict is defined as an act of disagreement between two parties caused by uncertainties between them. The conflict has a negative outcome that affects both parties involved in the argument. Conflict arises when the parties' thoughts do not align or go in opposite directions. Conflicts have negative consequences for both the individual and the business. As a result, it should be avoided.