Question 1

Which of the following factors should be evaluated during the internal analysis phase of strategic formulation?

Accepted Answer

A) manufacturing capacity 
B) new government regulations pending 
C) customer demand 
D) strength of the competition 
A) manufacturing capacity 
B) new government regulations pending 
C) customer demand 
D) strength of the competition

Question 2

Holding managers accountable only for those factors over which they have control is called:

Accepted Answer

A) management control systems 
B) responsibility accounting 
C) decentralization 
D) centralization 
A) management control systems 
B) responsibility accounting 
C) decentralization 
D) centralization

Question 3

Which of the following is a true statement about the use of the payback period technique in capital budgeting?

Accepted Answer

A) It is simple to use and understand. 
B) It considers the time value of money. 
C) It is difficult to appraise risk with this technique. 
D) It can't be used to measure liquidity. 
A) It is simple to use and understand. 
B) It considers the time value of money. 
C) It is difficult to appraise risk with this technique. 
D) It can't be used to measure liquidity.

Question 4

Johnson Ltd determined that the net present value of an investment in technological improvements at its plant in France would be €10,000,000 if pending litigation was resolved in the company's favor and would be €2,000,000 if the courts ruled against the company. Johnson's attorneys in France assessed the probability of a favorable ruling at 70%. What is the expected net present value of the project?

Accepted Answer

A) €10,000,000 
B) €2,000,000 
C) €6,000,000 
D) €7,000,000 
A) €10,000,000 
B) €2,000,000 
C) €6,000,000 
D) €7,000,000

Question 5

Which of the following would be characteristic of a bureaucratic control system?

Accepted Answer

A) goals are more likely to be achieved by local managers 
B) detailed policy and procedures manuals are used throughout an organization 
C) meetings between parent and subsidiary managers are scheduled when needed rather than on a specific schedule 
D) budgets play a minor role in the management control system 
A) goals are more likely to be achieved by local managers 
B) detailed policy and procedures manuals are used throughout an organization 
C) meetings between parent and subsidiary managers are scheduled when needed rather than on a specific schedule 
D) budgets play a minor role in the management control system

Question 6

Which of the following is not measured by the accounting system of a multinational corporation?

Accepted Answer

A) translation exposure 
B) economic exposure 
C) transaction exposure 
D) None of the above is measured by the accounting system. 
A) translation exposure 
B) economic exposure 
C) transaction exposure 
D) None of the above is measured by the accounting system.

Question 7

Which of the following is NOT part of the capital budgeting process?

Accepted Answer

A) project identification 
B) project evaluation 
C) project monitoring 
D) All of the above are parts of the capital budgeting process. 
A) project identification 
B) project evaluation 
C) project monitoring 
D) All of the above are parts of the capital budgeting process.

Question 8

What is the limitation of using the net present value for evaluating capital investment alternatives?

Accepted Answer

A) ignores the time value of money 
B) does not consider cash flows 
C) cannot be used to compare projects of different size 
D) All of the above are limitations of the net present value method. 
A) ignores the time value of money 
B) does not consider cash flows 
C) cannot be used to compare projects of different size 
D) All of the above are limitations of the net present value method.

Question 9

Why is it believed that Japanese companies prefer the payback period over the discounted cash flow methods for evaluating capital investment alternatives?

Accepted Answer

A) It is consistent with their corporate strategy of investing in new technology. 
B) Japanese companies compete using very short product life cycles. 
C) Cash flows over a long period of time are difficult to predict with much accuracy. 
D) All of the above 
A) It is consistent with their corporate strategy of investing in new technology. 
B) Japanese companies compete using very short product life cycles. 
C) Cash flows over a long period of time are difficult to predict with much accuracy. 
D) All of the above

Question 10

What is the advantage of using operating income or EBIT as a measure of performance in a profit center of a multinational corporation?

Accepted Answer

A) It is much easier to calculate than other measures. 
B) It is the only measure available to the senior management of the parent company. 
C) It excludes interest and taxes,which are beyond the manager's control. 
D) Divisional managers will maximize output if this measure is used for management control. 
A) It is much easier to calculate than other measures. 
B) It is the only measure available to the senior management of the parent company. 
C) It excludes interest and taxes,which are beyond the manager's control. 
D) Divisional managers will maximize output if this measure is used for management control.

Question 11

If only one currency is used for evaluating subsidiary performance in a multinational corporation,what currency is it most likely to be?

Accepted Answer

A) euros 
B) local currency of the subsidiary 
C) currency of the parent company's home country 
D) none of the above 
A) euros 
B) local currency of the subsidiary 
C) currency of the parent company's home country 
D) none of the above

Question 12

Conceptually,what is the internal rate of return?

Accepted Answer

A) number of years require for a project to return the cash invested in it 
B) discount rate that equates the present value of cash inflows to present value of cash outflows 
C) interest rate a company can generate on its corporate bonds and preferred stock 
D) average annual net income divided by initial investment in a project 
A) number of years require for a project to return the cash invested in it 
B) discount rate that equates the present value of cash inflows to present value of cash outflows 
C) interest rate a company can generate on its corporate bonds and preferred stock 
D) average annual net income divided by initial investment in a project

Question 13

Which capital budgeting technique is preferred in all major industrialized countries?

Accepted Answer

A) net present value 
B) internal rate of return 
C) payback period 
D) none of the above 
A) net present value 
B) internal rate of return 
C) payback period 
D) none of the above

Question 14

Which capital budgeting technique recognizes the time value of money?

Accepted Answer

A) payback period 
B) internal rate of return 
C) book rate of return 
D) return on investment 
A) payback period 
B) internal rate of return 
C) book rate of return 
D) return on investment

Question 15

Which of the following is a major limitation of using the internal rate of return as a tool in capital budgeting?

Accepted Answer

A) ignores the time value of money 
B) does not consider cash flows 
C) does not use accounting numbers 
D) assumes unrealistic reinvestment rate 
A) ignores the time value of money 
B) does not consider cash flows 
C) does not use accounting numbers 
D) assumes unrealistic reinvestment rate

Question 16

Why is management control particularly complex in decentralized multinational organizations?

Accepted Answer

A) Managers abroad are not as well-trained as managers of domestic operations. 
B) Decision-making authority is not delegated to the local managers of foreign operations. 
C) Managers of foreign operations may be motivated by local goals rather than parent's goals. 
D) Financial risks are always higher for the local managers of foreign operations than for managers of domestic operations. 
A) Managers abroad are not as well-trained as managers of domestic operations. 
B) Decision-making authority is not delegated to the local managers of foreign operations. 
C) Managers of foreign operations may be motivated by local goals rather than parent's goals. 
D) Financial risks are always higher for the local managers of foreign operations than for managers of domestic operations.

Question 17

Where would a divisional manager look to find the targets she is expected to reach in the next fiscal year?

Accepted Answer

A) strategic plan 
B) capital budget 
C) operating budget 
D) strategic formulation 
A) strategic plan 
B) capital budget 
C) operating budget 
D) strategic formulation

Question 18

In a 2002 PriceWaterhouseCoopers survey,which factor did CFOs consider most important in contributing to long-term shareholder return?

Accepted Answer

A) current financial results 
B) operating efficiency 
C) product and service quality 
D) innovation 
A) current financial results 
B) operating efficiency 
C) product and service quality 
D) innovation

Question 19

Determining a firm's long-term goals and objectives,adopting courses of action,and allocating resources required to achieve goals is a process called:

Accepted Answer

A) strategy formulation. 
B) strategic planning. 
C) strategy implementation. 
D) capital budgeting. 
A) strategy formulation. 
B) strategic planning. 
C) strategy implementation. 
D) capital budgeting.

Question 20

SSM Corporation,a multinational healthcare system,measures the number of minutes between a patient's arrival at the emergency room and the time he/she is seen by a physician. This measure focuses on what aspect of the balanced scorecard?

Accepted Answer

A) financial perspective 
B) customer perspective 
C) internal business processes perspective 
D) innovation and learning perspective 
A) financial perspective 
B) customer perspective 
C) internal business processes perspective 
D) innovation and learning perspective

Which of the following factors should be evaluated during the internal analysis phase of strategic formulation?

Holding managers accountable only for those factors over which they have control is called:

Which of the following is a true statement about the use of the payback period technique in capital budgeting?

Which of the following would be characteristic of a bureaucratic control system?

Which of the following is not measured by the accounting system of a multinational corporation?

Which of the following is NOT part of the capital budgeting process?

What is the limitation of using the net present value for evaluating capital investment alternatives?

Why is it believed that Japanese companies prefer the payback period over the discounted cash flow methods for evaluating capital investment alternatives?

What is the advantage of using operating income or EBIT as a measure of performance in a profit center of a multinational corporation?

If only one currency is used for evaluating subsidiary performance in a multinational corporation,what currency is it most likely to be?

Conceptually,what is the internal rate of return?

Which capital budgeting technique is preferred in all major industrialized countries?

Which capital budgeting technique recognizes the time value of money?

Which of the following is a major limitation of using the internal rate of return as a tool in capital budgeting?

Why is management control particularly complex in decentralized multinational organizations?

Where would a divisional manager look to find the targets she is expected to reach in the next fiscal year?

In a 2002 PriceWaterhouseCoopers survey,which factor did CFOs consider most important in contributing to long-term shareholder return?

Determining a firm's long-term goals and objectives,adopting courses of action,and allocating resources required to achieve goals is a process called:

SSM Corporation,a multinational healthcare system,measures the number of minutes between a patient's arrival at the emergency room and the time he/she is seen by a physician. This measure focuses on what aspect of the balanced scorecard?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

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Exam 13: Strategic Accounting Issues in Multinational Corporations

Which of the following factors should be evaluated during the internal analysis phase of strategic formulation?

Holding managers accountable only for those factors over which they have control is called:

Which of the following is a true statement about the use of the payback period technique in capital budgeting?

Which of the following would be characteristic of a bureaucratic control system?

Which of the following is not measured by the accounting system of a multinational corporation?

Which of the following is NOT part of the capital budgeting process?

What is the limitation of using the net present value for evaluating capital investment alternatives?

Why is it believed that Japanese companies prefer the payback period over the discounted cash flow methods for evaluating capital investment alternatives?

What is the advantage of using operating income or EBIT as a measure of performance in a profit center of a multinational corporation?

If only one currency is used for evaluating subsidiary performance in a multinational corporation,what currency is it most likely to be?

Conceptually,what is the internal rate of return?

Which capital budgeting technique is preferred in all major industrialized countries?

Which capital budgeting technique recognizes the time value of money?

Which of the following is a major limitation of using the internal rate of return as a tool in capital budgeting?

Why is management control particularly complex in decentralized multinational organizations?

Where would a divisional manager look to find the targets she is expected to reach in the next fiscal year?

In a 2002 PriceWaterhouseCoopers survey,which factor did CFOs consider most important in contributing to long-term shareholder return?

Determining a firm's long-term goals and objectives,adopting courses of action,and allocating resources required to achieve goals is a process called:

SSM Corporation,a multinational healthcare system,measures the number of minutes between a patient's arrival at the emergency room and the time he/she is seen by a physician. This measure focuses on what aspect of the balanced scorecard?

Introduction to International Accounting

Worldwide Accounting Diversity

International Convergence of Financial Reporting

International Financial Reporting Standards: Part I

International Financial Reporting Standards: Part II

Comparative Accounting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Additional Financial Reporting Issues

Analysis of Foreign Financial Statements

International Taxation

International Transfer Pricing

Comparative International Auditing and Corporate Governance

International Corporate Social Reporting

Filters