Firms do not need to consider post-consumption costs, as they occur after the firm has already secured a purchase
Indicate whether the statement is true or false
False
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The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years
The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0. The cane manufacturing machine will result in sales of 2500 canes in year 1. Sales are estimated to grow by 9% each year through year 3. The price per cane that Sisyphean will charge its customers is $16 each and is to remain constant. The canes have a cost per unit to manufacture of $10 each. Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts. It is estimated that the Sisyphean Corporation needs to hold 3% of its annual sales in cash, 5% of its annual sales in accounts receivable, 10% of its annual sales in inventory, and 5% of its annual sales in accounts payable. The firm is in the 35% tax bracket and has a cost of capital of 9%. The required net working capital in the first year for the Sisyphean Corporation's project is closest to ________. A) $5200 B) $5668 C) -$2800 D) $9200
Which of the following observations about the relationship between decision type and decision process is true?
A) Managerial decisions tend to be highly structured, whereas operational decisions are unstructured. B) Decisions at the operational level tend to be structured, whereas decisions at the strategic level tend to be unstructured. C) Higher-level organizational decisions should be highly structured. D) Need for collaboration is highly significant for lower-level, structured decisions.