Overview

Chapter 11:
Managing the Resources
Money and People

Overview

1. Net profit (or loss) = variable costs – total expenses.
Ans: False Page: 279

2. The difference between book value and going concern value is called goodwill.
Ans: True Page: 279

3. Cash revenues can also be referred to as “cash out”.
Ans: False Page: 285

4. According to the time value of money approach, it is better to receive a dollar today than it is to receive a dollar any time in the future.
Ans: True Page: 288

5. If the IRR of a potential investment is lesser than the required rate of return, the investment should be undertaken.
Ans: False Page: 289

6. Fortunately, taxes do not affect cash flow because they are deposited into separate accounts and dispersed later.
Ans: False Page: 289

7. The degree to which new ideas from all sources are welcomed and responded to promptly and appropriately is known as stimuli.
Ans: False Page: 292

8. A good manager never fires an employee.
Ans: False Page: 295

9. Over-disclosing is far better than restricting information.
Ans: True Page: 299

10. You cannot use a separation agreement when someone leaves the company voluntarily.
Ans: False Page: 300

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