In multi-division corporations where division heads are allocated an annual budget, explain why the use-it-or-lose-it use-it-or-lose-it phenomenon

Question:

In multi-division corporations where division heads are allocated an annual budget, explain why the “use-it-or-lose-it” “use-it-or-lose-it” phenomenon occurs and is a reflection of a prisoner’s dilemma.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics Theory and Applications

ISBN: 978-1118758878

12th edition

Authors: Edgar K. Browning, Mark A. Zupan

See More Books

Question Posted: Nov 14, 2014 08:28 AM

See More Questions

Sudbury Softball Inc makes softball bats and expects most of its sales to occur in the late spring and summer. The sales manager projects the following sales: May June July Aug 3,700 7,700 12,400...
Explain why the use of residual income for performance evaluation provides better incentives, in some ways, than ROI, but still causes managers to make some decisions that could be harmful to an...
Explain why the use of ADR is increasing.
Wilson Publishing Company produces books for the retail market. Demand for a current book is expected to occur at a constant annual rate of 7200 copies. The cost of one copy of the book is $14.50....
Why do you think that "virtual shopping" has not taken off faster as a research tool for retailers?
Explain why involves an indeterminate form, and then prove that the limit equals 0. lim(csc cot 0) 00
What would a market-product grid look like for an ideal company that Great States could merge with to achieve both marketing and R&Dmanufacturing synergies (efficiencies)?
a. Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $120,000. It will have a useful life of 4 years and no salvage value . Annual revenues...
micron technology's bonds currently sell for 1215 and have a par value of 1000. they pay a 105 annual coupon and have 15 year maturity, but they can be called in 5 years at 1100. what's their yield...
At the beginning of the year, Albers, Inc., has total stockholders equity of $840,000 and 40,000 outstanding shares of a single class of capital stock. During the year, the corporation completes the...
A considerable number of initial public offerings (IPOs) of stock in a company evidence a substantial run-up in price during early trading. Explain why asymmetric information between the investment...
If there is asymmetric information between the owners of a baseball team for which a given player plays and other teams owners, would you predict that players who opt to become free agents and end up...
Capitalize versus Expense Which one of the following statements is correct? a. When there is significant uncertainty about whether an expenditure should be capitalized or expensed, capitalize it. b....
Question 37 Plantito Inc., produces potted plants. For next year, Pietro predicts that 45,000 units will be produced, with the following total costs: Direct materials Direct labor ? 80,000 Variable...
When you are to design a data transmission system, you have two key considerations to work with: data rate and distance, with emphasis placed on achieving the highest data rates over the longest...
How much work does a supermarket checkout attendant do on a can of soup he pushes 0.600 m horizontally with a force of 5.00 N? Express your answer in joules and kilocalories. 3 . (a) Calculate the...
Suppose in its income statement for the year ended June 30, 2022, The Clorox Company reported the following condensed data (dollars in millions). Salaries and wages expenses$460 Research and...
Consider the extensive form game show in the figure below. How many strategies does Player 2 have in this game? (2,2,1) b (2,4,2) 03 by 03 02 dz (4.2,0) (2.0.2) (0.3.4) (3,5,3) (3,1,2)
$\left\{\begin{aligned} 2 x+2 y & >-4 \\ -x+3 y & \geq 9\end{aligned} ight.$ Solve the systems of linear equations by graphing.
Use a calculator to evaluate the expression. Round your result to the nearest thousandth. V (32 + #)
On January 1, 2015, Cai Company issued a 10% convertible bond at par, with a face value of 100,000, maturing on January 1, 2025. The bond is convertible into ordinary shares of Cai at a conversion...
In a neighborhood with 1,000 houses, 5 catch fire (but are not damaged by high winds), 7 are damaged by high winds (but do not catch fire), and the rest are unharmed during a one-year period. What is...
Guojun offers to bet Kristin that if a six-sided die comes up with one or two dots showing, he will pay her $3, but if it comes up with any other number of dots, she'll owe him $2. Is that a fair bet...
Lisa just inherited a vineyard from a distant relative. In good years (when there is no rain or frost during harvest season), she earns $100,000 from the sale of grapes from the vineyard. If the...
Break-Even Sales and Sales to Realize Income from Operations For the current year ending October 31, Yentling Company expects fixed costs of $537,600, a unit variable cost of $50, and a unit selling...
You buy a stock for $35 per share. One year later you receive a dividend of $3.50 per share and sell the stock for $30 per share. What is your total rate of return on this investment? What is your...
Filippucci Company used a budgeted indirect-cost rate for its manufacturing operations, the amount allocated ($200,000) is different from the actual amount incurred ($225,000). Ending balances in the...

In multi-division corporations where division heads are allocated an annual budget, explain why the use-it-or-lose-it use-it-or-lose-it phenomenon

Question:

Step by Step Answer:

Each division has an incentive to spend all of its allocate...View the full answer

Microeconomics Theory and Applications

Students also viewed these Economics questions