Economic Value Added (EVA):

a.

is a registered trademark owned by Stern Stewart & Co.

b.

is easy to administer

c.

is a variant of residual income

d.

is a variant of residual income and is registered trademark owned by Stern Stewart & Co.

e.

ignores taxes

Which of the following is true?

a.

Theft by employees is an example of an agency cost

b.

People in firms have equal knowledge

c.

Decision rights and knowledge must be separated to minimize agency costs

d.

Employee empowerment increases when firms centralize key functions

e.

None of the answers are correct

When activities are performed inside firms, which of the following is true?

	a.	The best performance measurement systems use only financial data because it is objective
	b.	None of the answers are correct
	c.	Centralized firms delegate decision rights to the lowest operational level
	d.	For efficiency, a manager should have both decision rights and decision control
	e.	Individuals strive to manipulate the performance evaluation system to maximize their own benefits

Complex companies adopt decentralization in order to realize all of the following benefits, except:

a.

improved awareness of, and response to, local conditions

b.

delegation of control to lower levels of management, thus facilitating their training and development

c.

reduced record-keeping

d.

none of the answers are correct

e.

shorter elapsed time from problem identification to decision-making and implementation

Which is true of a firm's transfer pricing policy?

	a.	Produces optimal results when set at the head office
	b.	All of the answers are correct
	c.	Leads to accurate measures of local performance
	d.	Is often designed to minimize tax expense
	e.	Always promotes goal congruence