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Question;40.;Best Brand Inc. (BBI) manufactures;household goods in the United States. The company made two acquisitions in;previous years to diversify its product lines. In 2005, HPI acquired cosmetics;and consumer electronics companies. BBI is now, in 2010, comprised of three;divisions: cosmetics, household, and consumer electronics. The following;information (in thousands of dollars) presents operating revenues, operating;income, and invested assets of the company over the last three years;The following;table shows the number of executives covered by the current compensation;package of HPI;The;current compensation package is an annual bonus award. The senior executives;share in the bonus pool. The pool is calculated as 20% of the annual residual;income of the company. The residual income is defined as operating income minus;a cost of capital charge of 15% of invested assets. Round all calculations to;two significant digits. The total amount of the bonus pool for 2008 is;A.;$134,000.;B.;$218,000.;C.;$141,000.;D.;$174,000.;E.;$205,000.;41. Best;Brand Inc. (BBI) manufactures household goods in the United States. The company;made two acquisitions in previous years to diversify its product lines. In;2005, HPI acquired cosmetics and consumer electronics companies. BBI is now, in;2010, comprised of three divisions: cosmetics, household, and consumer;electronics. The following information (in thousands of dollars) presents;operating revenues, operating income, and invested assets of the company over;the last three years;The following;table shows the number of executives covered by the current compensation;package of HPI;The;current compensation package is an annual bonus award. The senior executives;share in the bonus pool. The pool is calculated as 20% of the annual residual;income of the company. The residual income is defined as operating income minus;a cost of capital charge of 15% of invested assets. Round all calculations to;two significant digits. The total amount of the bonus pool for 2009 is;A.;$134,000.;B.;$218,000.;C.;$141,000.;D.;$174,000.;E.;$205,000.;42.;Best;Brand Inc. (BBI) manufactures household goods in the United States. The company;made two acquisitions in previous years to diversify its product lines. In;2005, HPI acquired cosmetics and consumer electronics companies. BBI is now, in;2010, comprised of three divisions: cosmetics, household, and consumer;electronics. The following information (in thousands of dollars) presents;operating revenues, operating income, and invested assets of the company over;the last three years;The following;table shows the number of executives covered by the current compensation;package of HPI;The;current compensation package is an annual bonus award. The senior executives;share in the bonus pool. The pool is calculated as 20% of the annual residual;income of the company. The residual income is defined as operating income minus;a cost of capital charge of 15% of invested assets. Round all calculations to;two significant digits. The total amount of the bonus pool for 2010 is;A.;$134,000.;B.;$218,000.;C.;$141,000.;D.;$174,000.;E.;$205,000.;43. Best;Brand Inc. (BBI) manufactures household goods in the United States. The company;made two acquisitions in previous years to diversify its product lines. In;2005, HPI acquired cosmetics and consumer electronics companies. BBI is now, in;2010, comprised of three divisions: cosmetics, household, and consumer;electronics. The following information (in thousands of dollars) presents;operating revenues, operating income, and invested assets of the company over;the last three years;The following;table shows the number of executives covered by the current compensation;package of HPI;The;current compensation package is an annual bonus award. The senior executives;share in the bonus pool. The pool is calculated as 20% of the annual residual;income of the company. The residual income is defined as operating income minus;a cost of capital charge of 15% of invested assets. Round all calculations to;two significant digits. Return on assets for the cosmetics division in 2008 is;A.;19.00%;B.;22.00%;C.;16.00%;D.;18.95%;44.;Best;Brand Inc. (BBI) manufactures household goods in the United States. The company;made two acquisitions in previous years to diversify its product lines. In;2005, HPI acquired cosmetics and consumer electronics companies. BBI is now, in;2010, comprised of three divisions: cosmetics, household, and consumer;electronics. The following information (in thousands of dollars) presents;operating revenues, operating income, and invested assets of the company over;the last three years;The;following table shows the number of executives covered by the current;compensation package of HPI;The;current compensation package is an annual bonus award. The senior executives;share in the bonus pool. The pool is calculated as 20% of the annual residual;income of the company. The residual income is defined as operating income minus;a cost of capital charge of 15% of invested assets. Round all calculations to;two significant digits. Return on sales in the household division in 2009 is;(rounded);A.;6.34%;B.;7.69%;C.;7.88%;D.;8.54%;45. Best;Brand Inc. (BBI) manufactures household goods in the United States. The company;made two acquisitions in previous years to diversify its product lines. In;2005, HPI acquired cosmetics and consumer electronics companies. BBI is now, in;2010, comprised of three divisions: cosmetics, household, and consumer;electronics. The following information (in thousands of dollars) presents;operating revenues, operating income, and invested assets of the company over;the last three years;The following;table shows the number of executives covered by the current compensation;package of HPI;The;current compensation package is an annual bonus award. The senior executives;share in the bonus pool. The pool is calculated as 20% of the annual residual;income of the company. The residual income is defined as operating income minus;a cost of capital charge of 15% of invested assets. Round all calculations to;two significant digits. Asset turnover in the electronics division in 2010 is;(rounded);A.;1.82;B.;2.02;C.;.733;D.;2.31;46.;An increase in the market price of a company's common stock will immediately;affect its;A.;Stock return.;B.;Debt to equity ratio.;C.;Earnings per share.;D.;Economic value added.;E.;Return on common;stockholders' equity.;47. Compensation;plans for high-level managers and executives are usually explained in the;firm's;A.;Management Discussion and Analysis;(MD&A).;B.;Income Statement.;C.;Notes to the Financial;Statements.;D.;Proxy Statement.;48.;In service firms, financial results can be measured by all the following except;A.;Staff utilization.;B.;The profit multiplier.;C.;Collections of accounts.;D.;Throughput.;49.;Which of the following aspects would not play a strategic role in;management compensation?;A.;Ethical issues.;B.;Strategic conditions;facing the firm.;C.;The effect of comparable;positions within the industry.;D.;The effect of risk;aversion on managers' decision making.;50.;Which one of the following has been the most common payment option for bonus;compensation in recent years?;A.;Vacation time.;B.;Stock options.;C.;Increased benefits.;D.;Salary increase.;51.;Common bases of bonus compensation include;A.;A;B.;B;C.;C;D.;D;E.;E;52.;Which of the following would explain why a manager would elect to defer bonus;compensation to future years?;A.;Interest rates are expected to decrease.;B.;The firm will be issuing;an initial public offering in the near future.;C.;To show dedication to;the company.;D.;To avoid or defer taxes.;53.;Firms typically provide benefits (perks) to employees to enhance motivation.;Which of the following would not be an example of a perk?;A.;Company car.;B.;Country club membership.;C.;Stock options.;D.;Executive life;insurance.;54.;The commonly used approaches for business valuation include;A.;A;B.;B;C.;C;D.;D;E.;E;55.;Which of the following is a liquidity ratio?;A.;Gross margin ratio.;B.;Return on Assets ratio.;C.;Quick ratio.;D.;Earnings per share.;56. EVA;is the acronym for;A.;Extra Value Assets.;B.;Economic Volume;Analysis.;C.;Efficiency Volume;Analysis.;D.;Economic Value Added.;57.;EVA is calculated as;A.;EVA Net Income - (Cost of Capital x EVA;Invested Capital).;B.;Total Net Income - (Cost;of Capital x Invested Capital).;C.;Gross Income - Cost of;Capital.;D.;Total Net Income - EVA;Net Income.;E.;Accounting earnings;adjusted for EVA.;58.;Methods for directly valuing a firm include;A.;A;B.;B;C.;C;D.;D;E.;E;59.;There is a common concern today that executive compensation in the U. S. is;A.;Not adequately linked to strategic;performance measures;B.;Ineffective as a;performance incentive;C.;Not properly disclosed;to the IRS;D.;Varies too greatly from;industry to industry;60.;Salary is;A.;A fixed payment that includes a bonus.;B.;A fixed payment that;includes benefits.;C.;A benefit that includes;a bonus.;D.;A fixed payment.

 

Paper#51210 | Written in 18-Jul-2015

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