Capstone Chapter 5 Quiz

Which of the following statements is true of accounting data?

Accounting data are historical data and thus backward-looking

Which of the following is an advantage of the balanced-scorecard?

It allows managers to translate a firm's vision into measurable operational goals.

Both Saturn Technologies and Granite Inc. incur a cost of $200 to manufacture a single unit of a cell phone. However, Saturn Technologies charges a higher price than Granite Inc. does, but it still sells a higher number of phones. What does this imply?

Saturn Technologies creates more economic value than Granite Inc. does.

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research & development expense/Revenue, and

Selling, general, & administrative expense/Revenue

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Total return to shareholders

Managers must first develop a strategy that is likely to produce a competitive advantage before implementing a balanced scorecard approach

True

The efficient market hypothesis suggests that the market price of a firm's stock is an objective indicator of a firm's past, current, and expected future performance.

True

The difference between the price charged for a product and the cost to manufacture it is referred to as the

producer surplus