Games Unlimited Inc. is considering a new game that would require an after-tax investment of $20.0 million. If the new game is well received, then the project would produce after-tax cash flows of $9.5 million a year for 3 years. However, if the market does not like the new game, then the after-tax cash flows would be only $5.4 million per year. There is a 50% probability of both good and bad market conditions. The firm could delay the project for a year while it conducts a test to determine if demand would be strong or weak. The project's after-tax cost and expected annual after-tax cash flows would be the same whether the project is delayed or not. If the WACC is 8.6%, what is the value (in thousands) of the investment timing option? Do not round intermediate calculations
a. $1,007
b. $3,886
c. $1,151
d. $2,110
e. $1,943
Answers
The value of the investment timing option is $1,943 thousands.
An investment timing option is an option to postpone or accelerate an investment in order to benefit from changes in cash flows generated by the investment. It is a financial option that allows a company to delay or accelerate an investment project to take advantage of future changes in the project's cash flows. A company may postpone or accelerate an investment if it believes that market conditions will change and affect the profitability of the investment.In this scenario, Games Unlimited Inc. is considering a new game that would require an after-tax investment of $20.0 million. The project would produce after-tax cash flows of $9.5 million a year for 3 years if the new game is well received, and $5.4 million per year if the market does not like the new game. There is a 50% probability of both good and bad market conditions. The firm could delay the project for a year while it conducts a test to determine if demand would be strong or weak.The investment timing option is calculated using the binomial model. The present value of the project is calculated with and without the option to delay. The difference between these two values is the value of the investment timing option.The present value of the project without the option to delay is $21.741 million. The present value of the project with the option to delay is $23.684 million. Therefore, the value of the investment timing option is $1.943 million (in thousands).
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Related Questions
The current sections of Ivanhoe Company's balance sheets for December 31, 2021, and 2022, are presented here. Ivanhoe Company's net income for 2022 was $165,100. Depreciation expense was $27,300.
20222021Current assets:Cash$40,300$57,850Accounts receivable55,25044,850Inventory50,70040,300Prepaid expenses11,05012,350Total current assets$157,300$155,350Current liabilities:Accrued expenses payable$3,900$10,400Accounts payable57,20046,800Total current liabilities$61,100$57,200
Prepare the net cash provided by the operating activities section of the company's statement of cash flows for the year ended December 31, 2022,
Answers
The net cash provided by the operating activities section of Ivanhoe Company's statement of cash flows for the year ended December 31, 2022, is $171,600.
To calculate the net cash provided by the operating activities section of Ivanhoe Company's statement of cash flows for the year ended December 31, 2022, we can use the indirect method and start with net income and adjust for non-cash items and changes in current assets and liabilities.
Net income for 2022 was $165,100, and depreciation expense was $27,300. Thus, the first step is to add back depreciation to net income:
Net income $165,100
Add: Depreciation expense $27,300
Net income plus depreciation $192,400
Next, we need to adjust for changes in current assets and liabilities.
The increase in accounts receivable from 2021 to 2022 was $55,250 - $44,850 = $10,400. This means that the company received $10,400 less in cash from customers in 2022 compared to 2021, so we subtract this amount:
Net income plus depreciation $192,400
Less: Increase in accounts receivable $(10,400)
Adjusted for changes in operating assets and liabilities $182,000
The increase in inventory from 2021 to 2022 was $50,700 - $40,300 = $10,400. This means that the company spent $10,400 more on inventory in 2022 compared to 2021, so we subtract this amount:
Adjusted for changes in operating assets and liabilities $182,000
Less: Increase in inventory $(10,400)
Net cash provided by operating activities $171,600
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The fact that taxpayers can deduct the amount they paid in interest on a home mortgage from the income they report on their tax returns is an example of Group of answer choices an entitlement program. a contributory program. an earned income tax credit. a tax expenditure.
Answers
If taxpayers can deduct the amount they paid in interest on a home mortgage. This is an example of a tax expenditure.
What is a tax expenditure?A tax expenditure can be defined as the process in which a tax payer can deduct money from their tax return.
Tax expenditures is important as it make use of deduction as well as exemption among others to reduce the amount that a tax payer file as tax return.
Therefore this is an example of a tax expenditure.
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Budgeting for Needs Select your needs from your cash expenses. CASH Last Month Gas for car$120 Fast food$20 Movie tickets$30 Amusement park$115
Answers
The necessities would be last month's gasoline for the car, while the expenses would be fast food, movie and amusement park tickets.
What are needs and expenses?Needs are a term that refers to the goods and services that a person needs in a fixed way for their daily life, some examples are:
TransportationFeedingEducationOutfitLiving placeAmong othersAccording to the above, it can be inferred that car gasoline is a necessity because it is a means of transportation that we can use to go to our work or place of study.
On the other hand, expenses are the goods and services that are not necessary for our daily lives but that we acquire for leisure and entertainment purposes. For example:
Video gameCinemaTheaterMake-upToysSweetStreet foodAmong othersBased on the above, it can be inferred that movie tickets, fast food, and amusement park tickets are expenses.
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which of the following conditions must be met for a taxpayer to be able to claim the foreign tax credit without filing form 1116? multiple choice all of the foreign-source income is passive income. total foreign taxes paid were less than $300 ($600 if married filing jointly). taxpayer is not subject to foreign tax limitation rules. all of these must be met.
Answers
To claim the foreign tax credit without filing Form 1116, all of the following conditions must be met: the income must be passive, total foreign taxes paid must be below $300 ($600 if married filing jointly), and the taxpayer must not be subject to foreign tax limitation rules.
The foreign tax credit is a tax relief mechanism that allows taxpayers to offset their U.S. tax liability by the amount of foreign taxes paid on foreign-source income. Generally, to claim the foreign tax credit, taxpayers must file Form 1116 to report and calculate the credit. However, in certain cases, taxpayers may be eligible to claim the credit without filing Form 1116 if they meet specific criteria.
In this scenario, all of the conditions listed must be met simultaneously for the taxpayer to be exempt from filing Form 1116. If any of the conditions are not satisfied, the taxpayer would be required to file Form 1116 to claim the foreign tax credit properly.
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Clark is learning about various business entity types in order to set up his new business. He wants to know which entities are subject to limited liability. You tell him that the entities subject to limited liability are:
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Clark is learning about various business entity types in order to set up his new business. He wants to know which entities are subject to limited liability. You tell him that the entities subject to limited liability are limited liability companies, corporations, and limited partnerships.
An entity that has limited liability protects its owners' personal assets from being used to settle the business's debts if the business fails. Limited liability companies, corporations, and limited partnerships are three types of business entities that provide limited liability.
Limited liability is a legal concept that refers to the owners of a business being personally shielded from liability for the company's obligations. In the event of business failure, limited liability shields the owner's personal assets from being used to satisfy the business's debts. Limited liability is a desirable attribute since it provides protection to the owner's personal assets in case of any legal issues related to the business.
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When borrowers want funding to pay for different projects, they go to the loanable funds market and acquire funds through either indirect finance or direct finance. Below, you are given five different scenarios. Is each an example of direct finance or indirect finance? Items (5 items) (Drag and drop into the appropriate area below Microsoft issues Alan goes to hisJennifer buys a Ford Motor Co. Jason borrows Heather takes out a loan from Citibank to start a business consulting firm. new securities local bank to borrow money to expand his small business money from his parents to start a food truck business. bond. Categories Direct finance Indirect finance
Answers
The examples of direct and indirect finance are listed below with proper explanations.
direct:
-Microsoft issues new securities.
-Jennifer buys a Ford Motor Co. bond
-Jason borrows money from his parents to start a food truck business.
indirect:
Heather takes out a loan from Citibank to start a business consulting firm
-Alan goes to his local bank to borrow money to expand his small business.
When you ask for a car loan directly through a lender, like a bank or financial institution, you are said to be using direct financing. Here, the lender will give you a single, specially tailored credit that you can use to look around at various dealerships. You are engaging in indirect banking when you work with loan packages through a third-party lender. Typically, you'll apply for financing at the dealership after you've finished looking for your car and receive a range of credit options.
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calculate the percentage by mass of all the components element in sodium trioxonitrate(v)
Answers
Sodium =27.05
Nitrogen=16.47
Oxygen=56.46
bernie madoff was known for: boasting about profits. sharing insider information with clients. high levels of secrecy. high levels of due diligence.
Answers
He was best known for running the biggest Ponzi scheme in recorded history, a financial fraud in which initial investors are reimbursed with funds obtained from subsequent investors rather than with actual investment income.
Madoff was raised in the Laurelton neighbourhood of Queens, New York, which has a large Jewish population. At some point, Madoff drew in investors by promising to make significant, consistent returns using a trading strategy known funds as split-strike conversion. However, Madoff put client money into a single bank account, which he then used to pay returning customers. It was a well-known Ponzi scheme that was also frighteningly straightforward.
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Question 5 of 10
For accountants, which of the following is the most important consequence
of the unethical use of technology?
A. the threat to the reliability of accounting systems
OB. the direct and indirect loss of revenue
C. the possibility that privacy will be compromised
D. the loss of trust in the accounting profession
SUBMIT
Answers
The most important consequence of the unethical use of technology for accountants is the threat to the reliability of accounting systems (option A).
What are accounting systems?Accounting systems are described as the controls, procedures, and processes in accounting. The main purpose of accounting systems is to make a summary and record the different business transactions in a way that will allow the creation of reports, and enhance operations.
If the accountants are unethically using technology, then it will directly impact the accounting processes, and transaction records of businesses, and the financial report will produce erroneous results and will highly degrade the decision-making process.
It can be concluded that the most important consequence of the unethical use of technology for accountants is the threat to the reliability of accounting systems (option A).
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Answer: The loss of trust in the accounting profession
Explanation: believed the other person aaaannnnnddddd got it wrong
Which multimedia and interactive elements do you think would best support your viewpoint on the topic you chose for your blog? Write two to four sentences explaining what multimedia and interactivity you will use and why.
Answers
Answer:
I will use images and details from credible websites, which will boost my own credibility and support my claim. I will also use charts and graphs from trusted web resources, such as government and university sites, to make my supporting evidence clear
Explanation:
I took the test
Brainiest???
The Use of videos, audios, and images in the blog will not only make it attractive but also make it credible.
Best Way to Write BlogTo write a credible and attractive blog we need to use multimedia such as videos, images, link of credible websites. We can also use other elements which can autocorrect grammer mistakes, can easily provide best charts and graphs.
The use of these elements can give a better outlook to our blog, and also create a sense of trust and credible information.
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he left the clinic. start's with that
Answers
Answer:
sí, salió de la clínica
Explanation:
URGENT!! - A credit card has a 24% interest rate (2% monthly), a $5000 balance, and a monthly minimum payment of $130. How much of the balance would be paid off in that month if only the monthly minimum payment was made?
A. $20
B.$30
C.$100
D.$130
Answers
If a credit card has a 24% interest rate (2% monthly), a $5000 balance, and a monthly minimum payment of $130, then the balance to be paid off in that month, if only the monthly minimum payment was made is 100$.
The answer is option C.$100.
How to find?
The balance for credit card = 5,000$
Total interest rate = 24%
Monthly interest rate is= 2%
Therefore, monthly minimum payment would be = 5000* 2%= 100
Hence, the answer is 100$.
What is the definition of a credit card in plain English?A credit card is a sort of credit facility offered by banks that enables consumers to borrow money up to a pre-approved credit limit. Customers can use it to buy products and services.
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Internal analysis enables a firm to determine what the firm:__________.
a. can do.
b. should do.
c. will do.
d. might do.
Answers
I did my homework on the landlord and found out he has a lot of complaints against him from former renters. He never repairs problems in apartments and never gives deposits back without a fight.
Answers
Answer:
this is seriously not the app for this...sorry
in a direct marketing channel, the manufacturer sells its products to __________.
Answers
In a direct marketing channel, the manufacturer sells its products to the consumers.
In a direct marketing channel, the manufacturer sells its products directly to the end consumers or customers. This means that the manufacturer bypasses intermediaries such as wholesalers, distributors, or retailers and interacts with the consumers directly.
This approach allows the manufacturer to have more control over their product's promotion, distribution, and pricing. The manufacturer may use various methods to reach the customers, including online platforms, catalogs, direct mail, telemarketing, or company-owned retail stores. By selling directly to consumers, manufacturers can have more control over pricing, branding, and customer relationships.
Therefore, in a direct marketing channel, the manufacturer sells its product to the consumer.
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What was the opening price of Dow Jones Industrial Average on Jul 09, 2018 in the format of XXXXX.XX?
Answers
Answer:
According to yahoo finance, the opening price of the Dow Jones Industrial Average on Jul 09, 2018, is 24519.20.
Explanation:
Dow Jones Industrial Average is a stock indicator of the top 30 companies of the US. Other indicators include NASDAQ Composite and S&P 500.
These indicators are used to assess the performance of the market on a subsequent day. From the historical data from the Yahoo Finance, the value for any day could be found which for July 09, 2018 is 24519.20.
What accounts are inventory invoices placed into?
Answers
Inventory invoices are usually placed into one of the following accounts in an accounting system:
Inventory Account: This account is used to track the cost of goods that a business has in stock. The inventory invoices are recorded as a debit in this account.
1. Purchases Account: This account is used to track the cost of goods purchased by a business. The inventory invoices are recorded as a credit in this account.
2. Cost of Goods Sold (COGS) Account: This account is used to track the cost of goods sold by a business. The inventory invoices are recorded as a debit in this account when the goods are sold.
3. Accounts Payable Account: This account is used to track the amount owed to suppliers for goods purchased on credit. The inventory invoices are recorded as a debit in this account until they are paid.
4. The specific accounts that inventory invoices are placed into may vary depending on the accounting system and the business's accounting policies. It's important to consult with an accountant or financial advisor to determine the most appropriate accounts to use for your business.
What do some of the careers projected to grow the fastest over the next 10 years have in common
Answers
Answer:
They all probably have something to do with technology because of how much AI is growing.
Explanation:
Answer:
c
Explanation:
it says it’s right
Why is Rent to Own a Rip Off?
Answers
You've been meaning to fix those rotted boards on your porch for years. Finally, last week the deck gave way. The replacement will cost you $3,000. Will you be able to recover the cost of replacement (less your deductible) from your homeowner's insurance?
Answers
We will not be able to recover the cost of replacement (less deductible) from the homeowner's insurance policy.
What is homeowner's insurance?This is an insurance that provide cover on the insured's home's structure and belongings in the event of a destructive event such as a fire, storm, hurricane, lighting, flood etc
A natural destruction resulting from a wear and tear is not covered under the homeowner's insurance.
Therefore, you will not be able to recover the cost of replacement from the homeowner's insurance policy.
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_____ is the concern of businesses for the welfare of society as a
whole.
Group of answer choices
a) Business morality
b) The marketing concept
c) Consumerism
d) Business ethics
e) Social responsibilit
Answers
Social responsibility is the concern of businesses for the welfare of society as a whole. The correct option is (e).
Social responsibility refers to the concept that businesses have an obligation to act in a manner that benefits society as a whole.
It is the concern and recognition that businesses should not only focus on maximizing profits but also consider the impact of their actions on various stakeholders, including employees, customers, communities, and the environment.
Businesses that embrace social responsibility take into account ethical considerations, sustainability, and the well-being of society when making decisions and conducting their operations.
They strive to contribute positively to society by implementing responsible business practices, engaging in philanthropy, supporting community development, promoting environmental sustainability, and upholding ethical standards.
Social responsibility goes beyond legal obligations and encompasses voluntary actions that businesses can take to address social and environmental challenges.
It reflects an understanding that businesses have a broader role to play in society and can make a positive difference by aligning their goals and actions with the well-being of the communities they operate in. The correct option is (e).
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In business, the concern for the welfare of society as a whole is called Social Responsibility. This refers to the ethical standard that businesses should benefit not just themselves, but also better the society they operate within.
Explanation:The concern of businesses for the welfare of society as a whole is referred to as Social Responsibility. This concept pertains to the idea that companies should conduct their business in a way that is ethical and equally beneficial for both the business and society. For instance, a socially responsible business may adopt sustainable practices to reduce environmental impact, support community initiatives, or ensure fair labor treatments within their organizations.
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Which of the following is the type of advertising that the media run free of charge?a. product advertisementsb. advocacy advertisementsc. public service advertisementsd. institutional advertisementse. local advertisements
Answers
public service advertisements are a valuable tool for promoting public awareness and social welfare. They are a type of advertising that the media run free of charge, and their primary goal is to educate the public on important issues.
The type of advertising that the media run free of charge is called public service advertisements. These advertisements aim to raise awareness and educate the public on issues of importance, such as health, safety, and social welfare. They are not meant to promote a particular product or service, but rather to provide information and promote positive behavior.
Public service advertisements are a form of advertising that media run free of charge. They are designed to promote public welfare and awareness of social issues. Unlike other types of advertising, public service advertisements are not meant to promote a specific product or service but to educate the public on a particular issue. They may cover a range of topics, including health, safety, and social welfare. Public service advertisements are typically produced by nonprofit organizations or government agencies, and their primary goal is to promote positive behavior and encourage social responsibility.
In conclusion, public service advertisements are a valuable tool for promoting public awareness and social welfare. They are a type of advertising that the media run free of charge, and their primary goal is to educate the public on important issues. By raising awareness and promoting positive behavior, public service advertisements can help to make the world a better place.
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When an appraiser relies on comparable properties to estimate the adjusted market price of a property, the appraiser is using the _______ approach.
Answers
When an appraiser relies on comparable properties to estimate a property's adjusted market price, the appraiser is using the sales comparison approach.
What is the sales comparison approach?Corresponds to a method used for market price comparison, being more used in the real estate sector, where a price comparison of properties in certain areas is carried out, to establish a price compatible with the local market.
The sales comparison helps in a greater understanding and strategic vision of the market, being in the real estate market, for example, an instrument that allows a more accurate comparison, such as:
Price per square meterCondition of the propertyGeographic featuresAge of the propertyTherefore, this technique is positive for strategic decision-making purposes, defining competitive and favorable conditions for the definition of competitive prices for a given market with specific characteristics.
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Select the items that are needs from your bank statement. ABC BANK Available Balance $230.00 Cell phone plan$45 Rent$400 Car insurance$60 Backpack$10 Electric bill$60 Car payment$250 Submit
Answers
Answer:everything but the backpack
Explanation:
pls be nice and answer this for me. in the middle of a test. 50 pts!
Nate received an unusually large requisition order from another department for a new type of material that they had not purchased before. He had a good relationship with the supplier so he sent the supplier an invoice for the order. What should Nate have done differently?
A. Solicited for a bid from the supplier
B. Solicited for a purchase order with the supplier
C. Ask the supplier for Verification for the requisition order
D. Used a new supplier since it was a new type of goods
Answers
Answer:
Solicited for a bid from the supplier.
Explanation:
Solicited for a bid from the supplier should Nate have done differently. Thus, option (a) is correct.
What is supplier?
The term supplier refers to supplies of the raw material and the goods. The supplier was the always part of the company to provide the customer the goods and the services. Suppliers provided the transportation of those materials. Suppliers are the mediator of the supply chain.
A bid is solicited, it signifies the target is actively looking for a buyer and wants to be bought as the supplier. These offers—also known as those that have the support of the management of both companies are frequently referred to as “friendly takeovers.” Solicitation bids, submission bids, and selection bids are the three different categories of bids.
As a result, the solicited for a bid from the supplier have the differently done. Therefore, option (a) is correct.
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what is the difference between using brainstorming and the delphi technique for risk identification? what are some of the advantages and disadvantages of each approach? describe the contents of a risk register and how the risk register is used in several risk management processes.
Answers
The brainstorming are the based interactive group. Delphi technique are thinking problem based in risk.
What is risk?The term risk refers to the situation of the danger. As the possibility of the situation as the creation of the circumstances. The risk of the loss of something.
The main difference between the brainstorming interactive group and the Delphi technique are thinking issue based. The brainstorming are the risk identification to used solely for generating ideas. Delphi technique for risk identification in their area of expertise.
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Taggart inc.'s stock has a 50% chance of producing a 39% return, a 30% chance of producing a 13% return, and a 20% chance of producing a -25% return. what is the firm's expected rate of return
Answers
The expected rate of return for Taggart Inc.'s stock is 8.7%.
What is rate of return?Rate of return is a measure of the profitability of an investment. It is usually expressed as a percentage and is calculated by dividing the total return of an investment (e.g. dividends, capital gain, etc.) by the amount of money invested. It is a way to measure the efficiency of an investment and can be used to compare different investments.
This is calculated by multiplying the probability of each return by the percentage of each return and then summing the results.
For example, the expected return for the 39% return is (50% x 39%) = 19.5%.
The expected return for the 13% return is (30% x 13%) = 3.9%.
The expected return for the -25% return is (20% x -25%) = -5%.
Finally, summing these three results gives the expected rate of return of 8.7%.
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For this assignment, you will prepare a written document (1 page) that identifies situations where effective financial control systems should be used.
For this assignment, we will focus on describing effective control systems and identifying situations where financial control systems should be used rather than non-financial controls systems. For a business you are familiar with:
Develop a one-page paper that describes how this business uses financial and non-financial controls.
Provide an example of each and discuss how effective each was at achieving the desired results.
Answers
In the business industry, the implementation of financial and non-financial controls is essential. The control systems are designed to ensure the firm's financial success, adherence to legal guidelines, and transparency of accounting practices.
Financial controls consist of any activities and processes that affect a company's finances, while non-financial controls are the strategies used to monitor and manage non-financial aspects of the business. For the company that I am familiar with, the financial and non-financial controls that they utilize are as follows: : Financial Controls:Financial controls are a set of procedures that aim to safeguard an organization's financial resources, prevent fraudulent activities, and ensure the accuracy of financial records.
An example of this control is Budgetary Control. This control system is used to make sure that the organization operates within its financial means. The budgetary control will set financial targets to be achieved and monitor expenses to make sure that the company does not go over budget. This control was effective in achieving the desired results by ensuring that the company maintains its financial stability.
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what is the money multiplier when the reserve ratio is 1/5 and people hold no currency?
Answers
The money multiplier when the reserve ratio is 1/5 and people hold no currency is 5.
The money multiplier represents the potential increase in the money supply through the fractional reserve banking system. In this case, with a reserve ratio of 1/5 (or 20%), it means that banks are required to hold 20% of deposits as reserves and can lend out the remaining 80%. Since people hold no currency, all deposits are kept within the banking system.
The formula for the money multiplier is given as the 1/reserve ratio. Therefore, when the reserve ratio is 1/5, the money multiplier is 1/(1/5) = 5. This means that for every $1 increase in reserves, banks can potentially create $5 of new money through lending. It indicates the expansionary effect on the money supply resulting from the initial injection of reserves into the banking system.
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ax Weber believed that bureaucracy prevents a firm from achieving a competitive advantage because it is inefficient and is plagued with management problems. Group startsTrue or False
Answers
The given statement that ax Weber believed that bureaucracy prevents a firm from achieving a competitive advantage because it is inefficient and is plagued with management problems is true.
Bureaucracy Bureaucracy is a type of organizational structure that is characterized by fixed and formal rules and procedures, hierarchical authority, and specialized roles for employees. It is a method of organization in which people, machines, and materials are coordinated to accomplish a specific objective efficiently. Max Weber, a German sociologist, developed the concept of bureaucracy in the early twentieth century.
He argued that bureaucracy is the most efficient and rational way to organize human activity. However, Weber also acknowledged that bureaucracy has several disadvantages that can prevent an organization from achieving a competitive advantage.
InefficiencyWeber claimed that bureaucracy is inefficient because it is rule-bound and lacks flexibility. Employees must adhere to strict procedures, which can cause delays and inefficiencies. Bureaucratic structures can also stifle creativity and innovation because they are resistant to change.
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