Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

16 Cards in this Set

  • Front
  • Back
The delegation of freedom to make decisions. The lower in the organization that this freedom exists, the greater the decentralization
Segment Autonomy
The delegation of decision-making power to managers of segments of an organization
Those informal and formal performance-based rewards that enhance managerial effort toward organizational goals
Agency Theory
A theory that deals with contracting between an organization and the managers that it hires to make decisions on its behalf
Return on Investment (ROI)
A measure of income or profit divided by the investmenet required to obtain that income or profit
Return on Sales
Income divided by revenue
Capital Turnover
Revenue divided by invested capital
Residual Income (RI)
After-tax operating income less a capital charge
Capital Charge
Company's cost of capital x amount of investment
Cost of Capital
What a firm must pay to acquire more capital, whether or not it actually has to acquire more capital
Economic Value Added (EVA)
Equals adjusted after-tax operating income minus the cost of invested capital multiplied by the adjusted average invested capital
Gross Book Value
The original cost of an asset before deducting accumulated depreciation
Net Book Value
The original cost of an asset less any accumulatged depreciation
Transfer Price
The price that one segment of an organization charges another segment of the same organizatgion for a product or service
Dysfunctional Decision
Any decision that is in conflict with organizational goals
Management By Objectives (MBO)
The joint formulation by a manager and his or her superior of a set of goals and plans for achieving the goals for a forthcoming period