Identify three major non-financial factors that AB would need to consider in mak-新东方在线职业题库

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Identify three major non-financial factors that AB would need to consider in making its eventual decision as to what to do.

考点：Chapter7Riskanduncertainty

(i) The maximax decision rule involves choosing the outcome with the best possible result, in this instance choosing the outcome which maximises contribution. The decision-maker would therefore choose a client fee of $180 per day, which could result in a contribution of $1,732,500.

(ii) The maximin decision rule involves choosing the outcome that offers the least unattractive worst outcome, in this instance choosing the outcome which maximises the minimum contribution. The decision-maker would therefore choose a client fee of $200 per day, which has a lowest possible contribution of $1,378,125. This is better than the worst possible outcomes from client fees per day of $180 and $220, which would provide contributions of $1,338,750 and $1,312,500 respectively.

(iii) The minimax regret decision rule involves choosing the outcome that minimises the maximum regret from making the wrong decision, in this instance choosing the outcome which minimises the opportunity lost from making the wrong decision. We can use the calculations performed in (a) to draw up an opportunity loss table.

The minimax regret decision strategy would be to choose a client fee of $200 to minimise the maximum regret at $26,250.

Workings

1 At a variable cost of $95 per day, the best strategy would be a client fee of $200 per day. The opportunity loss from using a fee of $180 would be $(1,378,125 – 1,338,750) = $39,375.

2 The opportunity loss in this case is $(1,378,125 – 1,378,125) = $0.

3 The opportunity loss in this case is $(1,378,125 – 1,312,500) = $65,625.

4 At a variable cost of $85 per day, the best strategy would be a client fee of $200 per day. The opportunity loss from using a fee of $180 would be $(1,509,375 – 1,496,250) = $13,125.

5 The opportunity loss in this case is $(1,509,375 – 1,509,375) = 0.

6 The opportunity loss in this case is $(1,509,375 – 1,417,500) = $91,875.

7 At a variable cost of $70 per day, the best strategy would be a client fee of $180 per day. The opportunity loss from using a fee of $180 would be $(1,732,500 – 1,732,500) = $0.

8 The opportunity loss in this case is $(1,732,500 – 1,706,250) = $26,250.

9 The opportunity loss in this case is $(1,732,500 – 1,575,000) = $157,500.

多做几道

A public health clinic is the subject of a scheme to measure its efficiency and effectiveness. Among a number of factors, the 'quality of care provided' has been included as an aspect of the clinic's service to be measured. Three features of 'quality of care provided' have been listed.

(1) Clinic's adherence to appointment times

(2) Patients' ability to contact the clinic and make appointments without difficulty

(3) The provision of a comprehensive patient health monitoring programme

Required

(i) Suggest a set of quantitative measures which can be used to identify the effective level of achievement of each of the features listed.

(ii) Indicate how these measures could be combined into a single 'quality of care' measure.

材料全屏

18

【论述题】

The absence of the profit measure in non profit seeking organisations causes problems for the measurement of their efficiency and effectiveness.

Required

(i) Explain why the absence of the profit measure should be a cause of the problems referred to.

(ii) Explain how these problems extend to activities within business entities which have a profit motive. Support your answer with examples.

材料全屏

24

【论述题】

Compare and contrast the use of residual income and return on investment in divisionalperformance measurement, stating the advantages and disadvantages of each.

Division Y of Chardonnay currently has capital employed of $100,000 and earns an annual profit after depreciation of $18,000. The divisional manager is considering an investment of $10,000 in an asset which will have a ten-year life with no residual value and will earn a constant annual profit after depreciation of $1,600. The cost of capital is 15%.

Calculate the following and comment on the results.

(i) The return on divisional investment before and after the new investment

(ii) The divisional residual income before and after the new investment

Explain the potential benefits of operating a transfer pricing system within a divisionalised company.

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