7. The most common costs of capital are interest paid on long-term debt, the div

Question

7. The most common costs of capital are interest paid on long-term debt, the dividends and growth in stock value that accrue to shareholders. a. True b. False 8. Economic Value Added (EVA) is a metric that corresponds closely to a company's before tax profit a. True b. False 9. Control is a condition that is achieved in single instances or at a point in time a. True b. False 10. If a company were to fire half of its workforce in order to cut costs and improve its financial position, it might also decrease service quality and customer satisfaction. This company would be experiencing sub-optimization. a. True b. False 11. ISO 9000 and ISO 9001 are two of the most widely used management tools for certifying that companies meet the needs of their customers, while also meeting statutory and regulatory requirements. a. True b. False 12. Six Sigma is a quality control certification process that includes techniques and tools for process improvement and strives for near perfection. a. Irue b. False 13. When engaged in unsupervised data mining from a data warehouse, an analyst will look for predictive patterns, sequence patterns, and data clusters often determined by using a series of"what if" questions. a. True b. False

Explanation / Answer

Capital cost is more in the nature of acquairing and or investments for long terms use and gains on and from its assets, like land, plant and machinery. Therefore the correct answer is False, the payments mentioned may be considered as service charges on the capital used for a fixed period, say a year.

8. False, Economic Value Added is a measure defined as net profit less the opportunity cost of the firm's capital. It is also defined as the residual wealth calculated after deducting cost of capital from its operating profit.

9. False, Control is more of a systematic effort to set performance standards with planning objectives. Certainly more than just a single instance or point of time.

10. True, the conditions mentioned/ stated are related to sub-optimization.

11. True, ISO 9000 & ISO 9001 refer to set of international standards on quality management and quality assurance.

12. Sis Sigma is a disciplined, data-driven approach and methodology for eliminating defects, therefore the statement is True.

13. The statement is True, as an analyst is likely to ask "what if" questions.

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