Quiz

       cash accounting.        accrual accounting.        deficit reduction.        balance sheet accounting.

       returned a very steady 12% per year.        never had a single year with a negative return.        never been overpriced or underpriced.        had annual returns ranging from negative 30% to over positive 30%.

       the personal value the manager assigns to the asset.        the economic value (i.e., the value of the economic benefits the asset will produce).        the seller’s asking price.        the value assigned by an appraiser.

       have very low transaction costs.        quickly process and include new information in prices.        tend to average out overpricing and underpricing.        can forecast the future accurately.

       makes investments that are expected to create value greater than their cost.        has a high stock price.        pays regular dividends.        obtains additional assets.

       negative $127,000        negative $27,000        $337,000        $801,000

       the accounting profits the product produces.        the depreciation tax shield the product produces.        the cash flows the product produces.        the market share the product commands.

       profit maximization.        manager wealth maximization.        stock price maximization.        shareholder wealth maximization.

       Recognize revenue as quickly as possible.        Have a lower chance of overstating sales than other companies.        Only recognize revenue after title transfer and payment have been completed.        Recognize a sale one month after the customer has received the product so the chance of return is low.

       A sale can only be recognized when cash changes hands.        A sale can only be recognized when the title or ownership changes hands.        It varies depending on the item and the nature of the sales contract.        A sale can only be recognized when the product is received by the buyer.