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General Partnership Equal Rights to Share, All Else = Contribution Limited Partnership P/L by Percentage of Capital Contribution Admission of a new partner requires unanimous consent. It takes unanimous written consent of all general partners to dissolve the limited partnership, not majority vote. Equal Authority Every partner in a partnership - whether active or inactive - has the right to inspect the partnership's books and records A partner's interest in specific partnership property is neither assignable to the partner's individual creditors nor is it subject to attachment by the partner's individual creditors. Member dies, the LLC is dissolved unless the other members consent to continue. Voting strength based on capital On dissolution of a general partnership the "order of distribution" would be as follows: III. General partner loans. I. Partners' capital accounts. II. General partners' profits. A parent corporation owning 90% or more of a subsidiary may merge the subsidiary (short form merger) into the parent without the approval of the shareholders of either corporation or the approval of the subsidiary's board In this case, only the shareholders of the subsidiary have dissenting rights. An ultra vires act is an act outside of a director's or an officer's scope of authority and thus is a breach of duty to the corporation. Expansionary fiscal policy involves increasing government purchases and/or decreasing taxes. Both increases in government spending and decreases in taxes cause the aggregate demand curve to shift right and thus cause real GDP (output) to increase. Nominal Wages = Input Cost As part of audit planning, the auditor should obtain an understanding of the entity's business. This understanding enables the auditor to better understand events, transactions, and practices that may affect the financial statements, to plan and perform appropriate audit tests, and to properly understand and evaluate the results of those tests. CPI = Inflation When the economy is operating at full employment, there is no cyclical unemployment. When the economy is operating at full employment, there is still some unemployment known as the natural rate of unemployment. (Frictional Structural and Seasonal) Cyclical = Recession

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The expenditure approach to computing GDP includes: Consumption Net exports Government expenditures Capital investment The treasury prints money. The Fed must increase the money supply through: 1. Federal open market committee (FOMC) purchasing or selling government securities, 2. Raising or lowering the discount rate, or 3. Changing the reserve ratio. Younger workers tend to move between jobs more frequently = Frictional Stagflation Low Output, High Prices, High Unemployment As inflation associated with a foreign currency increases in relation to a domestic economy, demand for the foreign currency falls. Inflation weakens the foreign currency in relation to the domestic currency and makes foreign products more expensive and reduces demand. Reduced demand for a foreign import will reduce the demand for its currency. The purchasing power parity theory holds that inflation will cause exchange rates to automatically adjust to ensure that an equal amount of a common currency will purchase similar goods in separate economies. The International Fischer effect considers the premium or discount on interest rates as an indicator of inflation. The value at risk method seeks to quantify the exposure of business to a one day loss in the value of its positions in foreign currencies. Any business firm that has the ability to control the price of the product it sells faces a downwardsloping demand curve for the firm. Only the firm in a competitive market is a price-taker facing a horizontal demand curve at the market equilibrium price. Support activities are those activities that are performed by the support staff of an organization (e.g., purchasing of materials and supplies, development of the technology used, management of employees, accounting, finance, strategic planning, etc.). Primary activities are those that are involved with the direct manufacture of products, the delivery of products through distribution channels, and the support of the product that exists after the sale is made (e.g., handling the raw materials, the manufacturing process, taking orders for the product, advertising the product, and servicing the product after it is sold). Analyzing the vertical linkage of a firm means understanding the activities of the suppliers and buyers of the product and determining where value can be created external to the firm's operations. Three major types of strategic frameworks that have been proven to be useful for value chain analysis are industry structure analysis, core competencies analysis, and segmentation analysis.

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Plan Demand and supply planning and management are included in this first step. Elements include balancing resources with requirements and determining communication along the entire chain. The plan also includes determining business rules to improve and measure supply chain efficiency. These business rules span inventory, transportation, assets, and regulatory compliance, among others. The plan also aligns the supply chain plan with the financial plan of the company (3). Source This step describes sourcing infrastructure and material acquisition. It describes how to manage inventory, the supplier network, supplier agreements, and supplier performance. It discusses how to handle supplier payments and when to receive, verify, and transfer product (3). Make Manufacturing and production are the emphasis of this step. Is the manufacturing process maketo-order, make-to-stock, or engineer-to-order? The make step includes, production activities, packaging, staging product, and releasing. It also includes managing the production network, equipment and facilities, and transportation (3). Deliver Delivery includes order management, warehousing, and transportation. It also includes receiving orders from customers and invoicing them once product has been received. This step involves management of finished inventories, assets, transportation, product life cycles, and importing and exporting requirements (3). Return Companies must be prepared to handle the return of containers, packaging, or defective product. The return involves the management of business rules, return inventory, assets, transportation, and regulatory requirements (3). A government price support program acts as a subsidy that will encourage suppliers to increase supply beyond an equilibrium point (the point where supply and demand curves intersect). This excess of supply over demand will create surpluses in the market. Book Dep = Irrelevant, Only Tax Shield Reelvant The profitability index is also referred to as the "excess present value index" or simply the "present value index."
Present value of net future cash inflows Profit ability index Present value of net initial investment

ARR = ROI
Accounting rate of return divides annual after-tax net income by average investment amount.

The economic rate of return (Div + Change in Price)/Beg Price Business risk represents the risk associated with the unique circumstances of a particular company, as they might affect the shareholder value of that company. If an entity purely uses its own cumulative earnings in capitalizing its operations, it is exposed to the risks of its own unique circumstances.

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Financial Risk = Default Risk

The current level of inventory has no impact on the optimal level of inventory. The optimal level of inventory is affected by: 1. The inventory usage rate. 2. The cost per unit of inventory - which will have a direct impact on inventory carrying costs. 3. The cost of placing on order impacts order frequency, which affects order size and optimal inventory levels. In a just-in-time environment, the flow of goods is controlled by a "pull" approach, where an item is produced only when it is needed down the line, and not a "push-through" system. The economic order quantity formula (EOQ) assumes that periodic demand is known. Annual sales volume is a crucial variable in the EOQ formula. The working capital financing policy that finances permanent current assets with short-term debt subjects the firm to the greatest risk of being unable to meet the firm's maturing obligations. Determining the appropriate level of working capital for a firm requires offsetting the benefit of current assets and current liabilities against the probability of technical insolvency. The commercial paper market: a. Avoids the expense of maintaining a compensating balance with a commercial bank. c. Provides a broad distribution for borrowing. d. Accrues a benefit to the borrower because its name becomes more widely known. Reorder costs do not impact the level of safety stock. Inspections are part of order costs, not carrying costs. When the economic order quantity (EOQ) model is used for a firm that manufactures its own inventory, ordering costs consist primarily of production set-up. A shortcut computation for operating leverage is the ratio of fixed costs to variable costs. Return on assets, long range profit objectives, industry average for earnings on sales, and earnings per share [not mentioned as an option] are all measures for evaluating the adequacy of the budgeted annual operating income. (Not IRR = Capital Budgeting) The imputed interest rate used in the residual income approach can best be described as the target return on investment set by the company's management. Revenue SBUs represent a greater responsibility than cost SBUs. Managers of a revenue SBU only have responsibility for one dimension of financial performance, but revenue generation is not under the control of the managers. Clearly the uncertainty associated with generating sales increases the risk and difficulty associated with the manager's responsibility Operation costing is a hybrid system that is usually applied to batches of similar products. In that way it is similar to process costing. The difference, however, is that materials are allocated on the basis of batches of production in a manner similar to job costing.

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The appropriate method for the disposition of underapplied or overapplied factory overhead depends on the significance of the amount. If insignificant, it goes to cost of goods sold only. If it is significant, it must be apportioned to cost of goods sold and finished goods inventory. Activity-based costing refines product cost information because the cost system emphasizes long-term product analysis (when fixed costs become variable costs). Absorption = External ABC/Variable = Internal Job/Process = Internal/External Budgetary control is the process of developing plans for a company's expected operations and controlling the operations to help carry out those plans. The master budget is the quantification of the company's overall plan. The budget does not provide the "controlling of operations" aspect that the question asks for. The budget manual provides guidance during the preparation of the budgets. Among other things, the budget manual would include instructions on the distribution of budget schedules. For a company that produces more than one product, the sales volume variance can be divided into sales quantity variance and sales mix variance. Sales volume variance (budgeted unit sales) (actual unit sales) budgeted contribution margin An AIS is best suited to solve problems where there is great certainty and clearly defined reporting requirements. A three-tier architecture is desktop client, application, and database. -

The practice of authorizing changes, approving tests results, and copying developmental programs to a production library is program change control. A gateway, often implemented via software, translates between two or more different protocol families and makes connections between dissimilar networks possible. A bridge joins network segments so they appear to be one physical segment. A router connects two or more network segments, such that the segments maintain their separate logical identities. An interpreter edits source language statements for syntax errors and translates them into executable code, but it interprets source statements one statement at a time, not as a group as a compiler does. The data control language is a type of database language used to specify the privileges and security rules governing database users.

YanyanXu.com The data definition language defines the database structure and content, especially the schema and subschema descriptions, including the names of the data elements contained in the database and their relationship to each other. Hierarchical databases use tree structures to organize data; relational databases use tables. Digital signature assures the recipient that the message came from a certain individual and it was not modified. MPC = Change in Consumption/Change in Income The major components of real GDP are total worker hours and labor productivity. Unlike the admission of a new general partner, the admission of a new limited partner requires the approval of not only all the general partners, but also the limited partners. Executory Consideration The theory underlying cost of capital is related to existing long-term financing and obtaining new long-term financing. Financing permanent working capital with long-term debt is considered to be a conservative policy. The arbitrage pricing model includes a series of systematic risk factors to estimate systematic risk. CAPM only includes one. Common stock is the most expensive form of financing and because of floatation costs new common stock is more expensive than retained earnings. NOPAT + Dep Change in NWC Capital Expenditure = FCF Operating profit = EBIT Times interest earned = EBIT/Interest Expense Book value per share is calculated as
Common stockholders equity / Outstanding shares = (Common stock + Retained earnings) / Outstanding shares -

Strategy maps are diagrams of the cause-and-effect relationships between strategic objectives.

YanyanXu.com ARR = Expected increase in annual net income Investment

Note that the numerator used for ARR is the increase in annual net income (not cash flows). In an interest rate swap, two companies exchange their debt servicing obligations on some amount of debt principal. The actual exchange of funds during the agreement is in the form of a net payment from the party owing the greater amount for the period. If the yield curve is upward sloping (normal), long-term rates are higher than short-term rates, including a belief that inflation will increase Excess PV Index = Present value of future net cash inflows Initial investment 100