Question

A disadvantage of decentralization is that decision-making is spread throughout the organization. This is a disadvantage because

	a.	lower-level managers may not fully understand the ramifications of their localized decisions on the organization as a whole.
	b.	managers tend to focus on interacting with others in the organization.
	c.	lower-level managers are often not trained well enough to run operations.
	d.	the potential for sharing ideas throughout the organization is increased.

In order to determine the present value of any future amount, all of the following are required except?

	a.	the interest rate.
	b.	when the future amount will be received.
	c.	the future amount to be received.
	d.	the preference decision.

Answer 1

Solution 1:

A disadvantage of decentralization is that decision-making is spread throughout the organization. This is a disadvantage because "lower-level managers may not fully understand the ramifications of their localized decisions on the organization as a whole"

Hence option a is correct.

Solution 2:

In order to determine the present value of any future amount, all of the following are required except "the preference decision:

Hence option d is correct.