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Managers should primarily focus on economic profits because they provide a clearer picture of a company's true financial health by accounting for opportunity costs and the cost of capital. This focus helps ensure that resources are allocated efficiently and investments are yielding returns that exceed the minimum required return. Additionally, prioritizing economic profits can drive long-term sustainability and competitiveness, as it encourages strategic decision-making that enhances overall value creation for stakeholders.
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Economic profits and losses are true market signals because they?
because they convey info about rewards people should anticipate experiencing by shifting resources from one activity to another
Write not more than 3 lines explaining the different between the economic profit and accounting profit?
Accounting profits tend to be higher than economic profits as they omit certain implicit costs, such as opportunity costs.For example, if you invest $100,000 to start a business and earned $120,000 in profit, your accounting profit would be $20,000. Economic profit would add implicit costs, such as the opportunity cost of $50,000 should you have been employed instead during that period. As such, you would have an economic loss of $30,000 ($120,000 - $100,000 - $50,000).
When making decisions managers should?
today
Which policy is in the spirt of mercantilism?
The colonies should give their profits to England
Which policy is in the spirit of Mercantilism?
The colonies should give their profits to England The colonies should only trade with England. England should only trade with Spain.
Why shouldn't managers focus on the current stock value?
Managers should not focus on the current stock value because the value fluctuates daily based on market conditions, profits, management, and current economy. Managers should instead focus on the long term growth of the company.
What are the four criteria managers should consider in evaluating alternative courses of action?
The four criteria managers use are: Legality Economic feasibility Practicality Ethicalness
Should managers and non managers be appraised from multiple prespectives?
Yes, managers and non-managers should be appraised from the top and the bottom. This will help executive managers get a better idea of how they are performing.
Why some managers may not delegate?
Managers choose not to delegate all work mainly because of two reasons # The work can be critical and can be done at Manager's level # The work is highly critical in terms of transparency, which should not be disclosed to reportees or down the hierarchy
Are managers should not wear uniforms?
Managers SHOULD wear uniform or they look unprofessional.
Who decides how profits should be spent in a corporation?
Ultimately, the Board of Directors decides how profits should be spent in a corporation.
What is the relationship managers should have?
managers should never date their employees. that just leads to a bad ending.
Economic profits and losses are true market signals because they?
because they convey info about rewards people should anticipate experiencing by shifting resources from one activity to another
Should financial managers concentrate strictly on cash flow?
financial managers
Write not more than 3 lines explaining the different between the economic profit and accounting profit?
Accounting profits tend to be higher than economic profits as they omit certain implicit costs, such as opportunity costs.For example, if you invest $100,000 to start a business and earned $120,000 in profit, your accounting profit would be $20,000. Economic profit would add implicit costs, such as the opportunity cost of $50,000 should you have been employed instead during that period. As such, you would have an economic loss of $30,000 ($120,000 - $100,000 - $50,000).
Who Decides How Profits Should Be Spent?
management
When making decisions managers should?
today
