B total expenditure on capital goods by entrepreneurs

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B. Total expenditure on capital goods by entrepreneurs during a period of full employment. C. Demand that is needed if a country’s economy is to operate at optimum level and the level of investment is to be raised. D. Total expenditures on consumer goods and investment, including government and foreign expenditures, during a given period. 57. (TRANSFER PRICING) In a decentralized company in which divisions may buy goods from one another, the transfer pricing system should be designed primarily to A. increase the consolidated value of inventory. B. allow division managers to buy from outsiders. C. minimize the degree of autonomy of division managers. D. aid in the appraisal and motivation of managerial performance . 58. (CAPITAL BUDGETING) When a profitable corporation sells an asset at a loss, the after-tax cash flow on the sale will A. exceed the pre-tax cash flow on the sale. B. be less than the pre-tax cash flow on the sale. C. be the same as the pre-tax cash flow on the sale. D. increase the corporation's overall tax liability. 59. (PERFORMANCE EVALUATION) Jimmy Corporation has a sales goal of P500,000 for the coming year. Based on this level of activity, Proficient budgets its total expenses at P450,000. Actual sales are P480,000 and actual costs are P460,000. Proficient Corporation’s operations were A. Both efficient and effective. . B. Neither efficient nor effective. C. Efficient but not effective D. Effective but not efficient. 60. (CAPITAL BUDGETING) The City of Malabon is about to replace an old fire truck with a new vehicle in an effort to save maintenance and other operating costs. Which of the following items, all related to the transaction, would not be considered in the decision? A. Purchase price of the old vehicle. B. Savings in operating costs as a result of the new vehicle. C. Proceeds from disposal of the old vehicle. D. Future depreciation on the new vehicle. 61. (RESPONSIBILITY ACCOUNTING) A management decision may be beneficial for a given profit center, but not for the entire company. From the overall company viewpoint, this decision would lead to
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MANAGEMENT ADVISORY SERVICES - THEORIES Page 12 A. goal congruence B. centralization C. suboptimization D. maximization 62. (FININANCING STRATEGY) Which of the following is an advantage of equity financing in comparison to debt financing? A. Issuance costs are greater than for debt. B. Ownership is given up with respect to the issuance of common stock. C. Dividends are not tax deductible by the corporation whereas interest is tax deductible. D. The company has no firm obligation to pay dividends to common shareholders . 63. (RORKING CAPITAL MANAGEMENT) Mansho Co. is applying for a loan in which the bank requires a quick ratio of at least 1. Mansho’s quick ratio is 0.8. Which of the following actions would increase Mansho’s quick ratio?
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