Quiz Ch 12 – Identifying Bias in Accounting Profitability Measures
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
Which situation is most likely indicative of bias in a firm’s accounting profitability measures?
Which situation is most likely indicative of bias in a firm’s accounting profitability measures?
Which statement does NOT represent an advantage of using Economic Value Added (EVA) as a performance measure?
Which is NOT true about Economic Value Added (EVA)?
Considering all else equal, how do firms with high levels of intangible assets generally report their ROI on financial statements?
Considering all other factors equal, which is likely to reduce a firm’s Economic Value Added (EVA)?
What should be the primary focus of compensation plans in incentivizing managers considering the imperfections in monitoring?
What strategies can be employed to minimize agency costs?
What outcomes are associated with the free-rider problem in the context of monitoring firms’ performance?
Who holds the primary responsibility for monitoring large public companies?
True or false: It is anticipated that there would be more instances of earnings management in privately held corporations compared to publicly traded corporations holding all other factors constant.