ACCT 202 Chapter : ManagerialAcct
15 Mar 2019
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Io= i1/(1 + r) < i1 < i2. Sponsorship of sporting, cultural events: advertising, attract and retain qualified managers. What is a firm: legal fiction, collection/intersection/nexus of contracts. Types of contracts: explicit written contracts, offer, acceptance, consideration (something of value must change hands) Relatively rare; incur large legal/ accounting costs; use for big money transactions: top few executives, sports/entertainment, major contracts among firms, lending (accounting numbers, unious, explicit, oral. Cheaper to set up and harder to enforce: implicit contracts. Other implicit terms; good is of merchantable quality (satisfactory); food won"t poison you; toaster won"t electrocute you; maybe a warranty (writing). Role of legal system: have an effective legal system, friends and family-contract with people you trust. Becomes unyielding as you become large; kiretsu (japan: chaos-bribery, corruption, organized crime. If you want an unbiased forecast, don"t also use it for performance evaluation. If performance evaluation is very important, someone higher up has to have knowledge to set budget.
