If, in addition to the estimated profits, management of the bank assesses the probabilities of high, medium, and low demands to be 0.3, 0.4 and 0.3, respectively, what is the expected opportunity loss from selecting location L4?

• A.US$5.50
• B.US$7.90
• C.US$7.50
• D.US$5.00

Correct Answer: A

First, the opportunity loss matrix must be prepared:

The expected opportunity loss from selecting location L4 is thus US $5.50 [($3 x 0.3) + ($4 x 0.4) + ($10 x)

Comment: *

Name: *

Email: *

Verification: *

An inventory planning method that minimizes inventories by arranging to have raw materials and subcomponents arrive immediately preceding their use is called:

• A.safety stock planning system.
• B.An economic order quantity model.
• C.A. just-in-time inventory system.
• D.A master budgeting system.

Comment: *

Name: *

Email: *

Verification: *

Use of unlicensed software in an organization:
I. Increases the risk of introducing viruses into the organization
II. Is not a serious exposure if only low-cost software is involved
III.
Can be detected by software checking routines that run from a network server

• A.I only.
• B.I and II only.
• C.I, II, and III.
• D.I and III only.

Comment: *

Name: *

Email: *

Verification: *

An entity has publicly announced a detailed, formal plan to dispose in its entirety of a component of the entity that represents a separate major line of business that is distinct operationally and financially. Which of the following is the proper treatment of the disclosures that should be made after the announcement?

• A.As part of continuing operations.
• B.As a discontinued operation.
• C.As an extraordinary item.
• D.As a prior-period item.

Comment: *

Name: *

Email: *

Verification: *

What is Lally's current tax expense for Year 2?

• A.US $1,960,000
• B.US $1,992,000
• C.US $2,000,000
• D.US $2,032,000

Comment: *

Name: *

Email: *

Verification: *