A firm’s value depends on the positive net income generated in the past. True False A firm’s value depends on the firm’s ability to generate positive cash flows now and in the future True False When determining the value of a firm, which of the following statements is true? • Inversters are risk neutral. Other things equal they prefer to pay more stocks that are less risky and have uncertain cash flows • Investers love risk. Other things equal they prefer to pay more for stocks that are more risky and have uncertain cash flows.
Growth maximisation is where the firm’s main goal is to increase the size of the firm as much as possible. Some firms may have the objective to maximise revenue, this basically is when a firms aim is to achieve as high total revenue as possible and occurs when marginal revenue to equal to zero. Another objective of s firm may be a profit satisfaction, this is where a firm produces a profit which is deemed to be a reasonable level, which is satisfying to stake holders and is not maximising profit. The best example in a leisure market is a firm that has been recently set up and wants to survive so the first couple of years their target will be to make a profit and survive. If they try to maximise profit it would an unrealistic competition as
leading yourself towards what you consider your aims. By developing the habit of concentrating on relevant activities you will build a platform to avoid distractions and become more productive and successful 3. Put First Things First We can call this habit "personal management", it is about organizing and implementing activities in line with the aims established in habit 2. We can consider habit 2 is the first, or "mental creation"; habit 3 is the second, or "physical creation". In other words:"Create a clear, mutual understanding of what needs to be accomplished, focusing on what, not how; results not methods.
As the time horizon increases, variable costs rely less on existing factors and restrictions and therefore will begin behaving differently which will in turn affect the cost of production (Wright, 2007). The second way a firm that’s into profit maximization can decide its greatest level of output is by way of the marginal revenue -- marginal cost method. This is done by subtracting the marginal cost from the marginal revenue that a product generates. Using marginal cost and marginal revenue as the bases, profit maximization will be obtained at the point when marginal revenue is equal to marginal cost. If the marginal revenue is greater than marginal cost this would be when a profit maximizing firm would need to increase production until marginal revenue is equal to marginal cost.
Company G has prided itself on cultivating relationships with it's suppliers built on honesty, confidence, and allegiance in order to facilitate profits for both parties. However, as popularity may grow for the product so too may the market and suppliers might consider increasing costs, in which case a fixed contract would be discussed. Threat from Substitutes – If the Little Wonder does prosper their may be threats from substitutes from larger companies that are able to produce a similar product on an increased scale thereby reducing it's price and making it difficult for Company G to compete. SWOT Analysis A SWOT analysis has been done for Company G and the outcome is clearly positive. The details of that evaluation: STRENGTHS Dedication from management, employees, and suppliers 1.
The philosophical leaders of the quality movement, Philip Crosby, W. Edwards Deming, and Joseph M. Juran had the same general message about what it took to achieve outstanding quality. Which of the following was part of that message? Customer focus Which of the following is not an analytical tool used in six-sigma quality improvement programs Shengo diagrams The dimension of design quality that concerns the consistency of performance over time or the probability of failing is which of the following? Reliability Which of the following is the cost of quality classification for costs such as inspection, testing, and other tasks to ensure that the product or process is acceptable? Appraisal costs Approximately what percentage of every sales dollar is allocated to the “cost of quality”?
• Reward-personal Goals Relationship (also known as Valence) – The Higher the reward, the higher satisfaction Each factor has its own characteristics that are further defined in below but essentially they boil down to the philosophy that an individual will be motivated to do something, as well as, act a certain way if their actions will benefit themselves. Vroom suggests that individuals are motivated when they believe higher levels of effort will lead to better performance and will be rewarded with desired outcomes (Redmond, 2007). Expectancy theory is classified as a process theory of motivation due to the face that it believes that individual perceptions of their environment and that they act on that environment as a repercussion of their personal expectations (Scholl, 2002). Expectancy probability: The first component of the Expectancy Theory is the Expectancy probability. With the Expectancy probability, it is believed that a person’s performance is based on their experiences.
The utilitarianism theory focuses on the proper action being taken in order to maximize the total benefit and reducing the possibility of negativity. Utilitarian’s focus on the consequence of an action
One of the most widely accepted explanations of motivation is Victor Vroom’s expectancy theory.99 Although it has its critics, most of the evidence supports it.100 expectancy theory A theory that says that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual. Expectancy theory argues that the strength of our tendency to act a certain way depends on the strength of our expectation of a given outcome and its attractiveness. In more practical terms, employees will be motivated to exert a high level of effort when they believe it will lead to a good performance appraisal; that a good appraisal will lead to organizational rewards such as bonuses, salary increases, or promotions; and that the rewards will satisfy the employees’ personal goals. The theory, therefore, focuses on three relationships (seeExhibit 7-8): * 1. Effort–performance relationship.
Its study dates back to the 1960s, with Julian Rotter's investigation into how people's behaviors and attitudes affected the outcomes of their lives. Locus of control describes the degree to which individuals perceive that outcomes result from their own behaviors, or from forces that are external to themselves. This produces a continuum with external control at one end and internal control at the other: Do you feel someone else is pulling your strings? © iStockphoto/Revenant_hm People who develop an internal locus of control believe that they are responsible for their own success. Those with an external locus of control believe that external forces, like luck, determine their outcomes.