Use of Well-Known Public Companies

Chapter 25 Capital Investment Analysis

• New chapter

Chapter 26 Pricing Decisions, Including Target Costing and Transfer Pricing

• LO1 reorganized and shortened • Updated Focus on Business Practice box on Internet fraud • Discussions of steps followed in gross margin pricing and return on assets

pricing in LO3 reformatted for greater clarity • Discussion of the differences between cost-based pricing and target costing in

LO4 revised and made more succinct • Section on developing a transfer price in LO5 revised

Chapter 27 Quality Management and Measurement

• In LO2, formula for computing delivery cycle time added and displayed; for-

mula for computing waste time also displayed • In LO4, discussion of Motorola’s Sigma Six quality goal revised, with disad-

vantages noted

Chapter 28 Financial Analysis of Performance

• Section on the management process in LO1 revised to increase the focus on

management’s objectives • Revised Focus on Business Practice box on pro forma earnings • In LO3, two-year coverage of the comprehensive ratio analysis extended to

three years • Revised Focus on Business Practice box on performance measurement and

management compensation

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