Which of the following conclusions would be true if you earn a higher

Uncategorized

Which of the following conclusions would be true if you earn a higher rate of return on

your investments?

a. The greater the present value would be for any lump sum you would receive in the

future.

b. The lower the present value would be for any lump sum you would receive in the

future.

c. Your rate of return would not have any effect on the present value of any sum to be

received in the future.

d. The greater the present value would be for any annuity you would receive in the

future.

2) At what rate must $500 be compounded annually for it to grow to $1,079.46 in 10

years?

a. 6 percent

b. 7 percent

c. 8 percent

d. 5 percent

3) What is the present value of $12,500 to be received 10 years from today? Assume a

discount rate of 8% compounded annually and round to the nearest $10.

a. $17,010

b. $9,210

c. $11,574

d. $5,790

4) The appropriate measure for risk according to the capital asset pricing model is:

a. the standard deviation of a firm’s cash flows

b. alpha

c. the standard deviation of a firm’s stock returns

d. beta

5) How much money must you pay into an account at the end of each of 20 years in

order to have $100,000 at the end of the 20th year? Assume that the account pays

6% per year, and round to the nearest $1.

a. $2,195

b. $1,840

c. $2,028

d. $2,718

Unit 2 Examination

Introduction to Financial Management

6) You have the choice of two equally risk annuities, each paying $5,000 per year for

8 years. One is an annuity due and the other is an ordinary annuity. If you are going

to be receiving the annuity payments, which annuity would you choose to maximize

your wealth?

a. The annuity due

b. Either one because they have the same present value.

c. The ordinary annuity

d. Since we don’t know the interest rate, we can’t find the value of the annuities and

hence we cannot tell which one is better.

7) If you put $1,000 in a savings account that yields 8% compounded semi-annually,

how much money will you have in the account in 20 years (round to nearest $10)?

a. $4,660

b. $4,801

c. $2,190

d. $1,480

8) You want $20,000 in 5 years to take your spouse on a second honeymoon. Your

investment account earns 7% compounded semiannually. How much money must you

put in the investment account today? (round to the nearest $1)

a. $14,178

b. $15,985

c. $13,349

d. $12,367

9) You invest $1,000 at a variable rate of interest. Initially the rate is 4% compounded

annually for the first year, and the rate increases one-half of one percent annually for

five years (year two’s rate is 4.5%, year three’s rate is 5.0%, etc.). How much will you

have in the account after five years?

a. $1,462

b. $1,359

c. $1,276

d. $1,338

10) Assume that you have $165,000 invested in a stock that is returning 11.50%,

$85,000 invested in a stock that is returning 22.75%, and $235,000 invested in a

stock that is returning 10.25%. What is the expected return of your portfolio?

a. 14.8%

b. 12.9%

c. 18.3%

d. 15.6%

Unit 2 Examination

Introduction to Financial Management

11) Which of the following statements is most correct concerning diversification and risk?

a. Risk-averse investors often select portfolios that include only companies from the

same industry group because the familiarity reduces the risk.

b. Risk-averse investors often choose companies from different industries for their portfolios because the correlation of returns is less than if all the companies came from

the same industry.

c. Only wealthy investors can diversify their portfolios because a portfolio must contain

at least 50 stocks to gain the benefits of diversification.

d. Proper diversification generally results in the elimination of risk.

12) The yield to maturity on a bond ________.

a. is fixed in the indenture

b. is lower for higher risk bonds

c. is the required rate of return on the bond

d. is generally below the coupon interest rate

13) You are considering buying some stock in Continental Grain. Which of the following

are examples of non-diversifiable risks?

I. Risk resulting from a general decline in the stock market.

II. Risk resulting from a possible increase in income taxes.

III. Risk resulting from an explosion in a grain elevator owned by Continental.

IV. Risk resulting from a pending lawsuit against Continental.

a. III and IV

b. II, III, and IV

c. I and II

d. I only

14) Of the following, which differs in meaning from the other three?

a. Systematic Risk

b. Market Risk

c. Asset-unique Risk

d. Undiversifiable Risk

Unit 2 Examination

100

Introduction to Financial Management

15) You must add one of two investments to an already well- diversified portfolio.

Security A Security B

Expected Return = 12% Expected Return = 12%

Standard Deviation of Standard Deviation of

Returns = 20.9% Returns = 10.1%

Beta = .8 Beta = 2

If you are a risk-averse investor, which one is the better choice?

a. Security A

b. Security B

c. Either security would be acceptable.

d. Cannot be determined with information given.

16) Which of the following is true of a zero coupon bond?

a. The bond has a zero par value.

b. The bond sells at a premium prior to maturity.

c. The bond makes no coupon payments.

d. The bond has no value until the year it matures because there are no positive cash

flows until then.

17) In an efficient securities market the market value of a security is equal to

a. par value.

b. its intrinsic value.

c. its book value.

d. its liquidation value.

18) In 1998 Fischer Corp. issued bonds with an 8 percent coupon rate and a $1,000

face value. The bonds mature on March 1, 2023. If an investor purchased one of

these bonds on March 1, 2008, determine the yield to maturity if the investor paid

$1,050 for the bond.

a. 8.5%

b. The yield to maturity must be greater than 8% because the price paid for the bond

exceeds the face value.

c. The yield to maturity is $950 ($1,000 interest less $50 capital loss).

d. 7.44%

Unit 2 Examination

101

Introduction to Financial Management

19) A bond’s yield to maturity depends upon all of the following except:

a. the maturity of the bond

b. the coupon rate

c. the individual investor’s required return

d. the bond’s risk as reflected by the bond rating

20) A bond will sell at a discount (below par value) if:

a. The economy is booming.

b. Current market interest rates are moving in the same direction as bond values.

c. The market value of the bond is less than the present value of the discount rate of the

bond.

d. Investor’s current required rate of return is above the coupon rate of the bond.

21) How is preferred stock similar to bonds?

a. Investors can sue the firm if preferred dividend payments are not paid (much like

bondholders can sue for non-payment of interest payments).

b. Dividend payments to preferred shareholders (much like bond interest payments to

bondholders) are tax deductible.

c. Preferred stockholders receive a dividend payment (much like interest payments to

bondholders) that is usually fixed.

d. Preferred stock is not like bonds in any way.

22) Many preferred stocks have a feature that requires a firm to periodically set aside

an amount of money for the retirement of its preferred stock. What is the name of this

feature?

a. Callable

b. Cumulative

c. Sinking fund

d. Convertible

23) How is preferred stock affected by a decrease in the required rate of return?

a. The value of a share of preferred stock increases.

b. The dividend increases.

c. The dividend yield increases.

d. The dividend decreases.

Unit 2 Examination

102

Introduction to Financial Management

24) Modem Development, Inc. paid a dividend of $5.00 per share on its common stock

yesterday. Dividends are expected to grow at a constant rate of 10% for the next two

years, at which point the dividends will begin to grow at a constant rate indefinitely.

If the stock is selling for $50 today and the required return is 15%, what it the expected annual dividend growth rate after year two?

a. 5.000%

b. 3.365%

c. 4.556%

d. 3.878%

25) Market efficiency implies which of the following?

a. book value = intrinsic value

b. market value = intrinsic value

c. book value = market value

d. liquidation value = book value

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July 1, 2023

90 exam questions

BUS 599: Strategic Management Exam

Question 1

Which of the following IS NOT an argument in favor of corporate social responsibility?

(a) Imposes unequal costs among competitors.

(b) Responds to changing stakeholders’ demands.

(d) Discourages government regulation.

Question 2

The ethical roots of the classical model of corporate social responsibility are found in which statement?

(a) The idea that the interests of stakeholders are as important as the interests of a corporation’s stockholders.

(b) The free market theory which holds that managers are ethically obliged to make as much money as possible for their.

(d) The ethical imperative to prevent harm.

Question 4

Which one of the following propositions correctly describes the concept of a right?

(a) Rights protect a person’s wants.

(b) There is really no distinction between a person’s wants and interests. Rights protect both.

(d) My rights never correspond to your duties and your duties never correspond to my rights.

Question 5

Human rights are:

(a) The standards of treatment to which all people are entitled.

(b) Can safely be ignored by international companies.

(d) Of no interest to customers of international companies.

Question 6

Which statement characterizes the moral reasoning typically found in a child?

(a) When in ROME, do as the Romans do.

(b) I’II scratch your back, if you’II scratch mine.

(d) Respect the rights of others.

Question 7

The Iron Law of Responsibility says that:

(a) In the long run, those who do not use power responsibly will lose it.

(b) In the short run, sacrifice social goals for economic goals.

(d) In the long run, economic responsibility leads to social responsibility.

Question 8

External rewards and internal rewards relate to which part of the ethical decision-making framework?

(a) Individual factors

(b) Significant others

(d) Intentions

(e) Opportunity

Question 10

Which one of the following statements about multinational corporations is FALSE?

(a) MNCs are corporate organizations that operate on a global scale without significant ties to any one nation or region.

(b) MNCs are inherently unethical.

(d) Some MNCs are so large and powerful that their revenues are greater than the gross domestic products of some countries.

(e) Because of their size and power, MNCs have been the subject of much ethical criticism and the source of a number of ethical issues.

Question 11

The most intense rivalry results from:

(a) Numerous equally balanced competitors, slow industry growth, and high fixed or storage costs.

(b) Few competitors, slow industry growth, lack of differentiation, and high fixed or storage costs.

(c) Numerous equally balanced competitors, manufacturing capacity increasing only in large increments, and low exit barriers.

(d) A high level of differentiation.

Question 12

A crash R&D program by one firm cannot replicate a successful technology developed by another firm when research findings cumulate.

(a) Social complexity.

(b) Path dependency.

(d) Causal ambiguity

Question 13

Emotional intelligence, as proposed by Daniel Goleman, is manifest in self-awareness, self-regulation, social skills, empathy, and:

(a) Ambition

(b) Motivation

(d) Open mindedness

Question 14

Which of the following is not characteristic of well-constructed goals?

(a) They are precise and measurable.

(b) They are the result of a group decision process.

(d) They are challenging but realistic.

(e) They address critical issues.

Question 15

There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that:

(a) All parts of the organizations gain at no loss.

(b) In order for someone to gain, others must experience no gain or benefit.

(d) Everyone in the organization shares gains and losses equally.

Question 16

Kaizen means:

(a) radical innovation.

(b) Incremental innovation.

(d) Continuous improvement.

Question 17

Costs associated with efforts to prevent errors are:

(a) Appraisal costs.

(b) Direct costs.

(d) Expected costs.

Question 18

Emerging sociocultrual changes in the environment include:

(a) Changes in the ethnic composition.

(b) The increasing educational attainment of women in the past decade.

(d) Changes in the geographic distribution of the population.

Question 19

In value chain analysis, the activities of organizations are divided into two major categories of value activities: primary and support. Which of the following is a primary activity?

(a) Purchasing key inputs.

(b) Recruiting and training employees.

(d) Monitoring the cost of producing the product through a cost accounting system.

Question 20

The balanced scorecard enables managers to consider their business from all of the following perspectives except:

(a) Customer perspective.

(b) Internal perspective.

(d) Ethical perspective.

Question 21

Imagine your boss wants you to investigate ways your company might be able enhance customer satisfaction, create an attractive loyalty program, and reward your customers. Most likely, your company’s immediate goal is to:

(a) Delight customers.

(b) Make more money.

(d) Redefine its position.

Question 22

Giant Grocery Retailer tells Small Cereal Manufacturer that it will not stock or sell Small Cereal Manufacture’s product line until and unless a better trade margin is provided. What type of power is Giant Grocery Retailer exhibiting?

(a) Purchasing power.

(b) Information power.

(d) Distribution power.

Question 23

Company ABC is interested in better understanding how different groups of customers feel about its product. In order to this, company ABC will need to :

(a) Position its product in the market.

(b) Segment the market.

(d) Target market.

Question -24

The terms manufacturer , service provider ,government agency, and wholesaler are designations used to segment business and organization markets according to:

(a) The type of customer.

(b) Demographics.

(d) Buying situations.

Question-25

Which of the following is defined to be an exchange between a firm and its customers?

(a) Advertising.

(b) Consumer behavior.

(d) Distribution.

Questions:-26

Which is an approach for creating a perceptual map?

(a) Attribute based.

(b) Demography based.

(d) Survey based.

Question-27

Marketing information should be gathered _________ so the can be in the know and poised for action.

(a) Quarterly

(b) Annually

(d) Every two years

Question-28

There are two major class of franchising. One is business format franchising. What is the other one?

(a) Market franchising.

(b) Product franchising.

(d) Multisite franchising.

Questin-29

Which of the following is not part of Michael porter’s five forces model?

(a) Industry competitors.

(b) Threat of competition imitation strategies.

(d) Bargaining power of buyer and suppliers.

Question-30

In order for an exchange to occur (marketing):

(a) A complex societal system must be involved.

(b) Organized marketing activities must also accur.

(d) Each party must have something of value to the other party.

Question-31

At a price above the equilibrium price, there is ______.

(a) A shortage

(b) A surplus

(d) Super –equilibrium

(e) None of the above

Question-32

At a price for which quantity demanded exceeds quantity supplied ,a __________ is experienced , which pushes the price______ toward its equilibrium value.

(a) Surplus; downward

(b) Surplus: upward

(d) Shortage: upward

Question-33

The minimum wage is an example of a ___________.

(a) Price door

(b) Price wall

(d) Price ceiling

Question-34

The supply of product X is perfectly inelastic if the price of X rises by _________.

(a) 5 percent and quantity supplied rises by 7 percent

(b) 8 percent and quantity supplied rises by 8 percent

(d) 10 percent and quantity supplied remains the same

Question-35

If the purchase and sale of a currently illegal drug such as marijuana were decriminalized , we would expect _______.

(a) An increase in demand and supply of this drug

(b) An increase in demand and a decrease in supply of this drug

(d) A decrease in demand and supply of this drug

Question-36

John just bought shares of stock in IBM for $10,000 and paid a $90 commission to his broker . How did this affect GDP (Gross domestic Product)?

(a) It had no impact on GDP.

(b) GDP (Gross Domestic Product) increased by $90

(d) GDP (Gross Domestic Product) increased by $9,990

(e) GDP (Gross Domestic Product ) increased by $10,0903

Question-37

Which one of the following will cause a movement down along an economy’s consumption schedule?

(a)An increase in stock prices.

(b) A decrease in stock prices.

(d) A decrease in disposable income.

Question-38

The largest component of national income is __________.

(a) Rental income

(b) Proprietor’s income

(d) Corporate profits

(e) Net interest

Question-39

According to the theory of efficiency wages:

(a) The most profitable firms keep wages low.

(b) Above –equilibrium wages are paid by the firm to increase worker productivity.

(d) Differences in human capital explain why firms pay high wages.

Question-40

If the CPI (Consumer Price Index ) is 170 and nominal income is $ 75,000, approximately what does real income equal?

(a) $127,500

(b) $74,825

(d) $44,118

Question-41

Dexter Hemingway is the CEO and Todd Bradley is the CFO of Maxwell Inc. Unknowingly, both signed the financial report for the financial year 2006/07, Which was misleading. Can they be held liable for punishment?

(a) Under the Sarbanes – Oxley Act, both of them must reimburse the company.

(b) Under the Sarbanes – Oxley Act, only the CEO will be liable for punishment.

(c) Under the Racketeer Influenced and Corrupt Organization Act(RICO) ,both of them are required to reimburse the company.

(d) Under the Racketeer Influenced and Corrupt Organization Act(RICO),only the CFO will be liable for punishment.

Question 42

A______ is a public offer to all the shareholders of a corporation to buy their shares at a stated price.

(a) Leveraged buy out

(b) Tender offer

(d) Merger

Question 43

If incorporators cannot show substantial compliance with statutes regarding incorporation but can show that they were unaware of any defect and acted in good faith, a court may trat the entity as a(n)___________.

(a) De jure corporation

(b) Real corporation

(d) Equitable corporation

Question 44

IF Tosca’s negligence causes Scarpia, who has an especially weak heart, to die of a heart attack, Scarpia,s surviving spouse_______.

(a) Will not be able to recover against TOSCA because Scarpia assumed the risk of harm when he allowed himself to interact with Tosca, knowing all the while that he had an especially weak heart.

(b) Will not be able to recover against Tosca if her negligence would not have caused a heart attack in normal person

(d) Will generally be able to recover against Tosca.

Question 45

Today, you might be buying from a regulated natural monopoly when you purchase:

(a) A house, a condominium, or a plot of land.

(b) Natural gas or electricity.

(d) A car, a truck, or a bicycle.

Question 46

Under the Equal protection clause,______.

(a) The government must treat like cases alike.

(b) States are prohibited from arbitrarily discriminating against persons.

(d) The government can uphold restrictions on property.

Question 47

A person who shares in the profits of the business but NOT in its_______ is not a partner.

(a) Management

(b) Losses

(d) voting

Question 48

Under rational basis analysis,_________.

(a) A government action will be upheld as long as it has a reasonable relationship to the achievement of a legitimate purpose, even if those provisions are foolish.

(b) Discrimination on the basis of a suspect category will received highest scrutiny

(d) Discrimination on the basis of economic interest will receive highest scrutiny.

Question 49

______ is a process used mainly in the area of public international law whereby a third party, often a disinterested government, brings the parties together by establishing communication and providing a site where the parties can meet, often in secret.

(a) Public involvement.

(b) Good offices

(d) Best transitions.

Question 50

________ law legal systems primarily rely on case law and precedents.

(a) Common

(b) Civil

(d) Codified

Question 51

A firm changes from Last I n First Out to First In First Out; this change will be found in the:

(a) The balance sheet.

(b) The income statement.

(d) Notes to the financial statements.

Question 52

Financial leverage impacts the performance of the firm by:

(a) Increasing the volatility of the firm’s earnings before interest & taxes.

(b) Decreasing the volatility of the firm’s earnings before interest & taxes.

(d) Increasing the volatility of the firm’s net income.

Question 53

In the financial planning model, external funds needed (EFN) is equal to changes in;

(a) Assets-(liabilities-equity).

(b) Assets-(liabilities + equity).

(d) (Assets + equity-liabilities).

Question 54

Use the following information and horizontal analysis to compute the percentage increase in sales: Year X sales were $200,000 and year (X+1) sales were $250,000.

(a) Sales increased by 80%.

(b) Sales increased by 25%

(d) Sales increased by 125%

Question 55

The counting house Inc., purchased a 5-year property class equipment for $60,000. The firm uses the MACRS method of depreciation. What is tax depreciation for the second year of the asset’s life”?

(a) 12000

(b) 19200

(d) 24000

Question 56

Which one of the following would not be counted as part of incremental cash flow?

(a) Opportunity cost.

(b) Sunk cost.

(d) External benefit such as acquisition of new technology which can be applied to other projects.

Question 57

The financial ratio days’ sales in receivables is measured as:

(a) Receivables turnover plus 365 days.

(b) Accounts receivable times 365 days.

(d) 365 days divided by the receivables turnover.

Question 58

The firm’s _______ are primarily interested in ratios that measure the short-term liquidity of the company and its ability to make principal and interest payments.

(a) Board of directors

(b) Creditors

(d) Financial managers

(e) Customers

Question 59

Which one of the following would not be counted after the end of a project?

(a) Scarp value.

(b) Continuation value.

(d) Change in working capital.

Question 60

An increase in which one of the following accounts increases a firm’s current ratio without affecting its quick ratio?

(a) Accounts payable

(b) Cash

(d) Accounts receivable

Question 61

Which structure is usually optimal for project based organizations with fluctuating workloads?

(a) Functional.

(b) Divisional

(d) Network.

Question 62

The right to self-determination and freedom from the control of others is called:

(a) Beneficence.

(b) Justice.

(d) Autonomy.

Question 63

An important activity in _______ is taking corrective action.

(a) Strategy formulation

(b) Strategy evaluation

(d) Strategy implementation

Question 64

For a culture to exist, it must be all of the following EXCEPT________.

(a) Shared by the vast majority of members.

(b) Be passed from generation to generation.

(d) Be distinct from decisions and behaviors.

Question 65

Advantages of the place design include all of the following except:

(a) Direct contact with customers in each locale.

(b) Managers in each market become generalists.

(d) Proximity to customers.

Question 66

A main force pushing toward a network structure is that an organizations has_________ core competencies.

(a) Undefined

(b) A few

(d) Independent

Question 67

A flat organizational structure creates a(n)______ span of control.

(a) Tall

(b) Narrow

(d) Centralized

Question 68

The term______refers to formal statements specifying acceptable and unacceptable behaviors and decisions by employees.

(a) Strategies

(b) Impersonality

(d) Rules

Question 69

________ refers to the lack of information regarding what needs to be done in a role, as well as unpredictability regarding the consequences of performance in that role.

(a) Time pressure

(b) Daily hassles

(d) Role ambiguity

(e) Role conflict

Question 70

The strategy that is based on an organization’s ability to provide a product or service at a lower cost than its rivals is referred to as________.

(a) Discount

(b) Differentiation

(d) Low-cost

Question 71

Paid-in Capital represents:

(a) Earnings retained for use in the business.

(b) The amount invested in the entity by the owners.

(d) Net assets of the entity at the date of the statement.

Question 72

At the beginning of the fiscal year, the balance sheet showed assets of $1,364 and owners equity of $836. During the year, assets increased $ 74 and liabilities decreased $38. Owner’s equity at the end of the year totaled:

(a) $836

(b) $872

(d) $1438

Question 73

The number of times interest charges are earned is computed as:

(a) Net income plus interest charges, divided by interest charges.

(b) Income before income tax plus interest charges, divided by interest charges.

(d) Income before income tax divided by interest charges.

Question 74

The tendency of the rate earned on stockholders equity to vary disproportionately from the rate earned on total assets is sometimes referred to as:

(a) Leverage.

(b) Solvency.

(d) Quick assets.

Question 75

Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?

(a) Internal rate of return

(b) Cash Payback

(d) Average rate of return

Question 76

Statements in which all items are expressed only in relative terms (percentages of a common bas )are:

(a) Horizontal statements.

(b) Percentage statements

(d) Common-size statements.

Question 77

The reason for recoding a prepaid expense as a current asset is:

(a) That the prepaid item will be returned for a cash refund.

(b) That the prepaid item has not yet become an expense.

(d) To avoid recognizing an expense so net income will be higher for the current accounting period.

Question 78

Current generally accepted Accounting Principles and auditing standards require that financial statements of an entity for the reporting period to include:

(a) Earnings and gross receipts of cash for the period.

(b) Projected earnings for the subsequent period.

(d) Current market values of all assets at the end of the period.

Question 79

Which of the flowing ratios provides a solvency measure that shows the margin of safety of note holders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?

(a) Ratio of fixed assets to long-term liabilities.

(b) Ratio of net sales to assets

(d) Rate earned on stockholders’ equity

Question 80

Sage, Inc has 20 employees who each earn $ 100 per day and are paid every Friday. The end of the accounting period is on a Wednesday.

(a) $2,000

(b) $1,000

(d) $6,000

Question 81

Testing the probability of a relationship between variables occurring by chance alone if there really was no difference in the population from which that sample was drawn is knows as:

(a) Multiple regression analysis.

(b) Chi-squared test.

(d) Significance testing.

Question 82

A Type II error is defined as ________.

(a) Rejecting a true null hypothesis

(b) Rejecting a false null hypothesis

(d) Not rejecting a false null hypothesis

Question 83

The numbers of rooms for 15 homes recently sold were (mean=7.4):8,8,8,5,9,8,7,6,6,7,7,7,7,9, and 9. What is the variance?

(a) 1.183

(b) 1.4

(d) 16

(e) 1.96

Question 84

Which of the following is an Excel add-in for simulation?

(a) Precision tree

(b) TopRank

(d) @Risk

(e) Riskview

Question 85

ANOVA is:

(a) A government body which collects social statistics.

(b) A two-way analysis variance.

(d) A one-way analysis of variance.

Question 86

Which of the following statements are false?

(a) The modeling process discussed in Data analysis & Decision making book is a five-step process.

(b) Dealing with uncertainty requires a basis understanding of probability.

(d) Data description and data inference are included under data analysis.

Question 87

In a criminal trial, a type II error is made when__________.

(a) A guilty defendant is acquitted

(b) An innocent person is convicted

(d) An innocent person is acquitted

Question 88

What is the name of the test that is used to assess the relationship two ordinal variables?

(a) Spearman’s rho.

(b) Phi.

(d) Chi square.

Question 89

Which one of the following would be considered a state of nature for a business firm?

(a) Inventory levels.

(b) Salaries for employees.

(d) Worker safety laws.

Question 90

The number of miles a truck is divine before it is overhauled is an examples of a(n)_______variable.

(a) Nominative

(b) Ordinal

(d) Ratio

Answers 0

July 1, 2023

90 exam questions

BUS 599: Strategic Management Exam

Question 1

Which of the following IS NOT an argument in favor of corporate social responsibility?

(a) Imposes unequal costs among competitors.

(b) Responds to changing stakeholders’ demands.

(d) Discourages government regulation.

Question 2

The ethical roots of the classical model of corporate social responsibility are found in which statement?

(a) The idea that the interests of stakeholders are as important as the interests of a corporation’s stockholders.

(b) The free market theory which holds that managers are ethically obliged to make as much money as possible for their.

(d) The ethical imperative to prevent harm.

Question 4

Which one of the following propositions correctly describes the concept of a right?

(a) Rights protect a person’s wants.

(b) There is really no distinction between a person’s wants and interests. Rights protect both.

(d) My rights never correspond to your duties and your duties never correspond to my rights.

Question 5

Human rights are:

(a) The standards of treatment to which all people are entitled.

(b) Can safely be ignored by international companies.

(d) Of no interest to customers of international companies.

Question 6

Which statement characterizes the moral reasoning typically found in a child?

(a) When in ROME, do as the Romans do.

(b) I’II scratch your back, if you’II scratch mine.

(d) Respect the rights of others.

Question 7

The Iron Law of Responsibility says that:

(a) In the long run, those who do not use power responsibly will lose it.

(b) In the short run, sacrifice social goals for economic goals.

(d) In the long run, economic responsibility leads to social responsibility.

Question 8

External rewards and internal rewards relate to which part of the ethical decision-making framework?

(a) Individual factors

(b) Significant others

(d) Intentions

(e) Opportunity

Question 10

Which one of the following statements about multinational corporations is FALSE?

(a) MNCs are corporate organizations that operate on a global scale without significant ties to any one nation or region.

(b) MNCs are inherently unethical.

(d) Some MNCs are so large and powerful that their revenues are greater than the gross domestic products of some countries.

(e) Because of their size and power, MNCs have been the subject of much ethical criticism and the source of a number of ethical issues.

Question 11

The most intense rivalry results from:

(a) Numerous equally balanced competitors, slow industry growth, and high fixed or storage costs.

(b) Few competitors, slow industry growth, lack of differentiation, and high fixed or storage costs.

(c) Numerous equally balanced competitors, manufacturing capacity increasing only in large increments, and low exit barriers.

(d) A high level of differentiation.

Question 12

A crash R&D program by one firm cannot replicate a successful technology developed by another firm when research findings cumulate.

(a) Social complexity.

(b) Path dependency.

(d) Causal ambiguity

Question 13

Emotional intelligence, as proposed by Daniel Goleman, is manifest in self-awareness, self-regulation, social skills, empathy, and:

(a) Ambition

(b) Motivation

(d) Open mindedness

Question 14

Which of the following is not characteristic of well-constructed goals?

(a) They are precise and measurable.

(b) They are the result of a group decision process.

(d) They are challenging but realistic.

(e) They address critical issues.

Question 15

There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that:

(a) All parts of the organizations gain at no loss.

(b) In order for someone to gain, others must experience no gain or benefit.

(d) Everyone in the organization shares gains and losses equally.

Question 16

Kaizen means:

(a) radical innovation.

(b) Incremental innovation.

(d) Continuous improvement.

Question 17

Costs associated with efforts to prevent errors are:

(a) Appraisal costs.

(b) Direct costs.

(d) Expected costs.

Question 18

Emerging sociocultrual changes in the environment include:

(a) Changes in the ethnic composition.

(b) The increasing educational attainment of women in the past decade.

(d) Changes in the geographic distribution of the population.

Question 19

In value chain analysis, the activities of organizations are divided into two major categories of value activities: primary and support. Which of the following is a primary activity?

(a) Purchasing key inputs.

(b) Recruiting and training employees.

(d) Monitoring the cost of producing the product through a cost accounting system.

Question 20

The balanced scorecard enables managers to consider their business from all of the following perspectives except:

(a) Customer perspective.

(b) Internal perspective.

(d) Ethical perspective.

Question 21

(a) Delight customers.

(b) Make more money.

(d) Redefine its position.

Question 22

(a) Purchasing power.

(b) Information power.

(d) Distribution power.

Question 23

Company ABC is interested in better understanding how different groups of customers feel about its product. In order to this, company ABC will need to :

(a) Position its product in the market.

(b) Segment the market.

(d) Target market.

Question -24

The terms manufacturer , service provider ,government agency, and wholesaler are designations used to segment business and organization markets according to:

(a) The type of customer.

(b) Demographics.

(d) Buying situations.

Question-25

Which of the following is defined to be an exchange between a firm and its customers?

(a) Advertising.

(b) Consumer behavior.

(d) Distribution.

Questions:-26

Which is an approach for creating a perceptual map?

(a) Attribute based.

(b) Demography based.

(d) Survey based.

Question-27

Marketing information should be gathered _________ so the can be in the know and poised for action.

(a) Quarterly

(b) Annually

(d) Every two years

Question-28

There are two major class of franchising. One is business format franchising. What is the other one?

(a) Market franchising.

(b) Product franchising.

(d) Multisite franchising.

Questin-29

Which of the following is not part of Michael porter’s five forces model?

(a) Industry competitors.

(b) Threat of competition imitation strategies.

(d) Bargaining power of buyer and suppliers.

Question-30

In order for an exchange to occur (marketing):

(a) A complex societal system must be involved.

(b) Organized marketing activities must also accur.

(d) Each party must have something of value to the other party.

Question-31

At a price above the equilibrium price, there is ______.

(a) A shortage

(b) A surplus

(d) Super –equilibrium

(e) None of the above

Question-32

At a price for which quantity demanded exceeds quantity supplied ,a __________ is experienced , which pushes the price______ toward its equilibrium value.

(a) Surplus; downward

(b) Surplus: upward

(d) Shortage: upward

Question-33

The minimum wage is an example of a ___________.

(a) Price door

(b) Price wall

(d) Price ceiling

Question-34

The supply of product X is perfectly inelastic if the price of X rises by _________.

(a) 5 percent and quantity supplied rises by 7 percent

(b) 8 percent and quantity supplied rises by 8 percent

(d) 10 percent and quantity supplied remains the same

Question-35

If the purchase and sale of a currently illegal drug such as marijuana were decriminalized , we would expect _______.

(a) An increase in demand and supply of this drug

(b) An increase in demand and a decrease in supply of this drug

(d) A decrease in demand and supply of this drug

Question-36

John just bought shares of stock in IBM for $10,000 and paid a $90 commission to his broker . How did this affect GDP (Gross domestic Product)?

(a) It had no impact on GDP.

(b) GDP (Gross Domestic Product) increased by $90

(d) GDP (Gross Domestic Product) increased by $9,990

(e) GDP (Gross Domestic Product ) increased by $10,0903

Question-37

Which one of the following will cause a movement down along an economy’s consumption schedule?

(a)An increase in stock prices.

(b) A decrease in stock prices.

(d) A decrease in disposable income.

Question-38

The largest component of national income is __________.

(a) Rental income

(b) Proprietor’s income

(d) Corporate profits

(e) Net interest

Question-39

According to the theory of efficiency wages:

(a) The most profitable firms keep wages low.

(b) Above –equilibrium wages are paid by the firm to increase worker productivity.

(d) Differences in human capital explain why firms pay high wages.

Question-40

If the CPI (Consumer Price Index ) is 170 and nominal income is $ 75,000, approximately what does real income equal?

(a) $127,500

(b) $74,825

(d) $44,118

Question-41

(a) Under the Sarbanes – Oxley Act, both of them must reimburse the company.

(b) Under the Sarbanes – Oxley Act, only the CEO will be liable for punishment.

(c) Under the Racketeer Influenced and Corrupt Organization Act(RICO) ,both of them are required to reimburse the company.

(d) Under the Racketeer Influenced and Corrupt Organization Act(RICO),only the CFO will be liable for punishment.

Question 42

A______ is a public offer to all the shareholders of a corporation to buy their shares at a stated price.

(a) Leveraged buy out

(b) Tender offer

(d) Merger

Question 43

(a) De jure corporation

(b) Real corporation

(d) Equitable corporation

Question 44

IF Tosca’s negligence causes Scarpia, who has an especially weak heart, to die of a heart attack, Scarpia,s surviving spouse_______.

(a) Will not be able to recover against TOSCA because Scarpia assumed the risk of harm when he allowed himself to interact with Tosca, knowing all the while that he had an especially weak heart.

(b) Will not be able to recover against Tosca if her negligence would not have caused a heart attack in normal person

(d) Will generally be able to recover against Tosca.

Question 45

Today, you might be buying from a regulated natural monopoly when you purchase:

(a) A house, a condominium, or a plot of land.

(b) Natural gas or electricity.

(d) A car, a truck, or a bicycle.

Question 46

Under the Equal protection clause,______.

(a) The government must treat like cases alike.

(b) States are prohibited from arbitrarily discriminating against persons.

(d) The government can uphold restrictions on property.

Question 47

A person who shares in the profits of the business but NOT in its_______ is not a partner.

(a) Management

(b) Losses

(d) voting

Question 48

Under rational basis analysis,_________.

(a) A government action will be upheld as long as it has a reasonable relationship to the achievement of a legitimate purpose, even if those provisions are foolish.

(b) Discrimination on the basis of a suspect category will received highest scrutiny

(d) Discrimination on the basis of economic interest will receive highest scrutiny.

Question 49

(a) Public involvement.

(b) Good offices

(d) Best transitions.

Question 50

________ law legal systems primarily rely on case law and precedents.

(a) Common

(b) Civil

(d) Codified

Question 51

A firm changes from Last I n First Out to First In First Out; this change will be found in the:

(a) The balance sheet.

(b) The income statement.

(d) Notes to the financial statements.

Question 52

Financial leverage impacts the performance of the firm by:

(a) Increasing the volatility of the firm’s earnings before interest & taxes.

(b) Decreasing the volatility of the firm’s earnings before interest & taxes.

(d) Increasing the volatility of the firm’s net income.

Question 53

In the financial planning model, external funds needed (EFN) is equal to changes in;

(a) Assets-(liabilities-equity).

(b) Assets-(liabilities + equity).

(d) (Assets + equity-liabilities).

Question 54

Use the following information and horizontal analysis to compute the percentage increase in sales: Year X sales were $200,000 and year (X+1) sales were $250,000.

(a) Sales increased by 80%.

(b) Sales increased by 25%

(d) Sales increased by 125%

Question 55

(a) 12000

(b) 19200

(d) 24000

Question 56

Which one of the following would not be counted as part of incremental cash flow?

(a) Opportunity cost.

(b) Sunk cost.

(d) External benefit such as acquisition of new technology which can be applied to other projects.

Question 57

The financial ratio days’ sales in receivables is measured as:

(a) Receivables turnover plus 365 days.

(b) Accounts receivable times 365 days.

(d) 365 days divided by the receivables turnover.

Question 58

The firm’s _______ are primarily interested in ratios that measure the short-term liquidity of the company and its ability to make principal and interest payments.

(a) Board of directors

(b) Creditors

(d) Financial managers

(e) Customers

Question 59

Which one of the following would not be counted after the end of a project?

(a) Scarp value.

(b) Continuation value.

(d) Change in working capital.

Question 60

An increase in which one of the following accounts increases a firm’s current ratio without affecting its quick ratio?

(a) Accounts payable

(b) Cash

(d) Accounts receivable

Question 61

Which structure is usually optimal for project based organizations with fluctuating workloads?

(a) Functional.

(b) Divisional

(d) Network.

Question 62

The right to self-determination and freedom from the control of others is called:

(a) Beneficence.

(b) Justice.

(d) Autonomy.

Question 63

An important activity in _______ is taking corrective action.

(a) Strategy formulation

(b) Strategy evaluation

(d) Strategy implementation

Question 64

For a culture to exist, it must be all of the following EXCEPT________.

(a) Shared by the vast majority of members.

(b) Be passed from generation to generation.

(d) Be distinct from decisions and behaviors.

Question 65

Advantages of the place design include all of the following except:

(a) Direct contact with customers in each locale.

(b) Managers in each market become generalists.

(d) Proximity to customers.

Question 66

A main force pushing toward a network structure is that an organizations has_________ core competencies.

(a) Undefined

(b) A few

(d) Independent

Question 67

A flat organizational structure creates a(n)______ span of control.

(a) Tall

(b) Narrow

(d) Centralized

Question 68

The term______refers to formal statements specifying acceptable and unacceptable behaviors and decisions by employees.

(a) Strategies

(b) Impersonality

(d) Rules

Question 69

________ refers to the lack of information regarding what needs to be done in a role, as well as unpredictability regarding the consequences of performance in that role.

(a) Time pressure

(b) Daily hassles

(d) Role ambiguity

(e) Role conflict

Question 70

The strategy that is based on an organization’s ability to provide a product or service at a lower cost than its rivals is referred to as________.

(a) Discount

(b) Differentiation

(d) Low-cost

Question 71

Paid-in Capital represents:

(a) Earnings retained for use in the business.

(b) The amount invested in the entity by the owners.

(d) Net assets of the entity at the date of the statement.

Question 72

(a) $836

(b) $872

(d) $1438

Question 73

The number of times interest charges are earned is computed as:

(a) Net income plus interest charges, divided by interest charges.

(b) Income before income tax plus interest charges, divided by interest charges.

(d) Income before income tax divided by interest charges.

Question 74

The tendency of the rate earned on stockholders equity to vary disproportionately from the rate earned on total assets is sometimes referred to as:

(a) Leverage.

(b) Solvency.

(d) Quick assets.

Question 75

Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?

(a) Internal rate of return

(b) Cash Payback

(d) Average rate of return

Question 76

Statements in which all items are expressed only in relative terms (percentages of a common bas )are:

(a) Horizontal statements.

(b) Percentage statements

(d) Common-size statements.

Question 77

The reason for recoding a prepaid expense as a current asset is:

(a) That the prepaid item will be returned for a cash refund.

(b) That the prepaid item has not yet become an expense.

(d) To avoid recognizing an expense so net income will be higher for the current accounting period.

Question 78

Current generally accepted Accounting Principles and auditing standards require that financial statements of an entity for the reporting period to include:

(a) Earnings and gross receipts of cash for the period.

(b) Projected earnings for the subsequent period.

(d) Current market values of all assets at the end of the period.

Question 79

(a) Ratio of fixed assets to long-term liabilities.

(b) Ratio of net sales to assets

(d) Rate earned on stockholders’ equity

Question 80

Sage, Inc has 20 employees who each earn $ 100 per day and are paid every Friday. The end of the accounting period is on a Wednesday.

(a) $2,000

(b) $1,000

(d) $6,000

Question 81

Testing the probability of a relationship between variables occurring by chance alone if there really was no difference in the population from which that sample was drawn is knows as:

(a) Multiple regression analysis.

(b) Chi-squared test.

(d) Significance testing.

Question 82

A Type II error is defined as ________.

(a) Rejecting a true null hypothesis

(b) Rejecting a false null hypothesis

(d) Not rejecting a false null hypothesis

Question 83

The numbers of rooms for 15 homes recently sold were (mean=7.4):8,8,8,5,9,8,7,6,6,7,7,7,7,9, and 9. What is the variance?

(a) 1.183

(b) 1.4

(d) 16

(e) 1.96

Question 84

Which of the following is an Excel add-in for simulation?

(a) Precision tree

(b) TopRank

(d) @Risk

(e) Riskview

Question 85

ANOVA is:

(a) A government body which collects social statistics.

(b) A two-way analysis variance.

(d) A one-way analysis of variance.

Question 86

Which of the following statements are false?

(a) The modeling process discussed in Data analysis & Decision making book is a five-step process.

(b) Dealing with uncertainty requires a basis understanding of probability.

(d) Data description and data inference are included under data analysis.

Question 87

In a criminal trial, a type II error is made when__________.

(a) A guilty defendant is acquitted

(b) An innocent person is convicted

(d) An innocent person is acquitted

Question 88

What is the name of the test that is used to assess the relationship two ordinal variables?

(a) Spearman’s rho.

(b) Phi.

(d) Chi square.

Question 89

Which one of the following would be considered a state of nature for a business firm?

(a) Inventory levels.

(b) Salaries for employees.

(d) Worker safety laws.

Question 90

The number of miles a truck is divine before it is overhauled is an examples of a(n)_______variable.

(a) Nominative

(b) Ordinal

(d) Ratio

Answers 0

July 1, 2023

90 exam questions

BUS 599: Strategic Management Exam

Question 1

Which of the following IS NOT an argument in favor of corporate social responsibility?

(a) Imposes unequal costs among competitors.

(b) Responds to changing stakeholders’ demands.

(d) Discourages government regulation.

Question 2

The ethical roots of the classical model of corporate social responsibility are found in which statement?

(a) The idea that the interests of stakeholders are as important as the interests of a corporation’s stockholders.

(b) The free market theory which holds that managers are ethically obliged to make as much money as possible for their.

(d) The ethical imperative to prevent harm.

Question 4

Which one of the following propositions correctly describes the concept of a right?

(a) Rights protect a person’s wants.

(b) There is really no distinction between a person’s wants and interests. Rights protect both.

(d) My rights never correspond to your duties and your duties never correspond to my rights.

Question 5

Human rights are:

(a) The standards of treatment to which all people are entitled.

(b) Can safely be ignored by international companies.

(d) Of no interest to customers of international companies.

Question 6

Which statement characterizes the moral reasoning typically found in a child?

(a) When in ROME, do as the Romans do.

(b) I’II scratch your back, if you’II scratch mine.

(d) Respect the rights of others.

Question 7

The Iron Law of Responsibility says that:

(a) In the long run, those who do not use power responsibly will lose it.

(b) In the short run, sacrifice social goals for economic goals.

(d) In the long run, economic responsibility leads to social responsibility.

Question 8

External rewards and internal rewards relate to which part of the ethical decision-making framework?

(a) Individual factors

(b) Significant others

(d) Intentions

(e) Opportunity

Question 10

Which one of the following statements about multinational corporations is FALSE?

(a) MNCs are corporate organizations that operate on a global scale without significant ties to any one nation or region.

(b) MNCs are inherently unethical.

(d) Some MNCs are so large and powerful that their revenues are greater than the gross domestic products of some countries.

(e) Because of their size and power, MNCs have been the subject of much ethical criticism and the source of a number of ethical issues.

Question 11

The most intense rivalry results from:

(a) Numerous equally balanced competitors, slow industry growth, and high fixed or storage costs.

(b) Few competitors, slow industry growth, lack of differentiation, and high fixed or storage costs.

(c) Numerous equally balanced competitors, manufacturing capacity increasing only in large increments, and low exit barriers.

(d) A high level of differentiation.

Question 12

A crash R&D program by one firm cannot replicate a successful technology developed by another firm when research findings cumulate.

(a) Social complexity.

(b) Path dependency.

(d) Causal ambiguity

Question 13

Emotional intelligence, as proposed by Daniel Goleman, is manifest in self-awareness, self-regulation, social skills, empathy, and:

(a) Ambition

(b) Motivation

(d) Open mindedness

Question 14

Which of the following is not characteristic of well-constructed goals?

(a) They are precise and measurable.

(b) They are the result of a group decision process.

(d) They are challenging but realistic.

(e) They address critical issues.

Question 15

There are several perspectives of competition. One perspective is zero-sum thinking. Zero-sum thinking means that:

(a) All parts of the organizations gain at no loss.

(b) In order for someone to gain, others must experience no gain or benefit.

(d) Everyone in the organization shares gains and losses equally.

Question 16

Kaizen means:

(a) radical innovation.

(b) Incremental innovation.

(d) Continuous improvement.

Question 17

Costs associated with efforts to prevent errors are:

(a) Appraisal costs.

(b) Direct costs.

(d) Expected costs.

Question 18

Emerging sociocultrual changes in the environment include:

(a) Changes in the ethnic composition.

(b) The increasing educational attainment of women in the past decade.

(d) Changes in the geographic distribution of the population.

Question 19

In value chain analysis, the activities of organizations are divided into two major categories of value activities: primary and support. Which of the following is a primary activity?

(a) Purchasing key inputs.

(b) Recruiting and training employees.

(d) Monitoring the cost of producing the product through a cost accounting system.

Question 20

The balanced scorecard enables managers to consider their business from all of the following perspectives except:

(a) Customer perspective.

(b) Internal perspective.

(d) Ethical perspective.

Question 21

(a) Delight customers.

(b) Make more money.

(d) Redefine its position.

Question 22

(a) Purchasing power.

(b) Information power.

(d) Distribution power.

Question 23

Company ABC is interested in better understanding how different groups of customers feel about its product. In order to this, company ABC will need to :

(a) Position its product in the market.

(b) Segment the market.

(d) Target market.

Question -24

The terms manufacturer , service provider ,government agency, and wholesaler are designations used to segment business and organization markets according to:

(a) The type of customer.

(b) Demographics.

(d) Buying situations.

Question-25

Which of the following is defined to be an exchange between a firm and its customers?

(a) Advertising.

(b) Consumer behavior.

(d) Distribution.

Questions:-26

Which is an approach for creating a perceptual map?

(a) Attribute based.

(b) Demography based.

(d) Survey based.

Question-27

Marketing information should be gathered _________ so the can be in the know and poised for action.

(a) Quarterly

(b) Annually

(d) Every two years

Question-28

There are two major class of franchising. One is business format franchising. What is the other one?

(a) Market franchising.

(b) Product franchising.

(d) Multisite franchising.

Questin-29

Which of the following is not part of Michael porter’s five forces model?

(a) Industry competitors.

(b) Threat of competition imitation strategies.

(d) Bargaining power of buyer and suppliers.

Question-30

In order for an exchange to occur (marketing):

(a) A complex societal system must be involved.

(b) Organized marketing activities must also accur.

(d) Each party must have something of value to the other party.

Question-31

At a price above the equilibrium price, there is ______.

(a) A shortage

(b) A surplus

(d) Super –equilibrium

(e) None of the above

Question-32

At a price for which quantity demanded exceeds quantity supplied ,a __________ is experienced , which pushes the price______ toward its equilibrium value.

(a) Surplus; downward

(b) Surplus: upward

(d) Shortage: upward

Question-33

The minimum wage is an example of a ___________.

(a) Price door

(b) Price wall

(d) Price ceiling

Question-34

The supply of product X is perfectly inelastic if the price of X rises by _________.

(a) 5 percent and quantity supplied rises by 7 percent

(b) 8 percent and quantity supplied rises by 8 percent

(d) 10 percent and quantity supplied remains the same

Question-35

If the purchase and sale of a currently illegal drug such as marijuana were decriminalized , we would expect _______.

(a) An increase in demand and supply of this drug

(b) An increase in demand and a decrease in supply of this drug

(d) A decrease in demand and supply of this drug

Question-36

John just bought shares of stock in IBM for $10,000 and paid a $90 commission to his broker . How did this affect GDP (Gross domestic Product)?

(a) It had no impact on GDP.

(b) GDP (Gross Domestic Product) increased by $90

(d) GDP (Gross Domestic Product) increased by $9,990

(e) GDP (Gross Domestic Product ) increased by $10,0903

Question-37

Which one of the following will cause a movement down along an economy’s consumption schedule?

(a)An increase in stock prices.

(b) A decrease in stock prices.

(d) A decrease in disposable income.

Question-38

The largest component of national income is __________.

(a) Rental income

(b) Proprietor’s income

(d) Corporate profits

(e) Net interest

Question-39

According to the theory of efficiency wages:

(a) The most profitable firms keep wages low.

(b) Above –equilibrium wages are paid by the firm to increase worker productivity.

(d) Differences in human capital explain why firms pay high wages.

Question-40

If the CPI (Consumer Price Index ) is 170 and nominal income is $ 75,000, approximately what does real income equal?

(a) $127,500

(b) $74,825

(d) $44,118

Question-41

(a) Under the Sarbanes – Oxley Act, both of them must reimburse the company.

(b) Under the Sarbanes – Oxley Act, only the CEO will be liable for punishment.

(c) Under the Racketeer Influenced and Corrupt Organization Act(RICO) ,both of them are required to reimburse the company.

(d) Under the Racketeer Influenced and Corrupt Organization Act(RICO),only the CFO will be liable for punishment.

Question 42

A______ is a public offer to all the shareholders of a corporation to buy their shares at a stated price.

(a) Leveraged buy out

(b) Tender offer

(d) Merger

Question 43

(a) De jure corporation

(b) Real corporation

(d) Equitable corporation

Question 44

IF Tosca’s negligence causes Scarpia, who has an especially weak heart, to die of a heart attack, Scarpia,s surviving spouse_______.

(a) Will not be able to recover against TOSCA because Scarpia assumed the risk of harm when he allowed himself to interact with Tosca, knowing all the while that he had an especially weak heart.

(b) Will not be able to recover against Tosca if her negligence would not have caused a heart attack in normal person

(d) Will generally be able to recover against Tosca.

Question 45

Today, you might be buying from a regulated natural monopoly when you purchase:

(a) A house, a condominium, or a plot of land.

(b) Natural gas or electricity.

(d) A car, a truck, or a bicycle.

Question 46

Under the Equal protection clause,______.

(a) The government must treat like cases alike.

(b) States are prohibited from arbitrarily discriminating against persons.

(d) The government can uphold restrictions on property.

Question 47

A person who shares in the profits of the business but NOT in its_______ is not a partner.

(a) Management

(b) Losses

(d) voting

Question 48

Under rational basis analysis,_________.

(a) A government action will be upheld as long as it has a reasonable relationship to the achievement of a legitimate purpose, even if those provisions are foolish.

(b) Discrimination on the basis of a suspect category will received highest scrutiny

(d) Discrimination on the basis of economic interest will receive highest scrutiny.

Question 49

(a) Public involvement.

(b) Good offices

(d) Best transitions.

Question 50

________ law legal systems primarily rely on case law and precedents.

(a) Common

(b) Civil

(d) Codified

Question 51

A firm changes from Last I n First Out to First In First Out; this change will be found in the:

(a) The balance sheet.

(b) The income statement.

(d) Notes to the financial statements.

Question 52

Financial leverage impacts the performance of the firm by:

(a) Increasing the volatility of the firm’s earnings before interest & taxes.

(b) Decreasing the volatility of the firm’s earnings before interest & taxes.

(d) Increasing the volatility of the firm’s net income.

Question 53

In the financial planning model, external funds needed (EFN) is equal to changes in;

(a) Assets-(liabilities-equity).

(b) Assets-(liabilities + equity).

(d) (Assets + equity-liabilities).

Question 54

Use the following information and horizontal analysis to compute the percentage increase in sales: Year X sales were $200,000 and year (X+1) sales were $250,000.

(a) Sales increased by 80%.

(b) Sales increased by 25%

(d) Sales increased by 125%

Question 55

(a) 12000

(b) 19200

(d) 24000

Question 56

Which one of the following would not be counted as part of incremental cash flow?

(a) Opportunity cost.

(b) Sunk cost.

(d) External benefit such as acquisition of new technology which can be applied to other projects.

Question 57

The financial ratio days’ sales in receivables is measured as:

(a) Receivables turnover plus 365 days.

(b) Accounts receivable times 365 days.

(d) 365 days divided by the receivables turnover.

Question 58

The firm’s _______ are primarily interested in ratios that measure the short-term liquidity of the company and its ability to make principal and interest payments.

(a) Board of directors

(b) Creditors

(d) Financial managers

(e) Customers

Question 59

Which one of the following would not be counted after the end of a project?

(a) Scarp value.

(b) Continuation value.

(d) Change in working capital.

Question 60

An increase in which one of the following accounts increases a firm’s current ratio without affecting its quick ratio?

(a) Accounts payable

(b) Cash

(d) Accounts receivable

Question 61

Which structure is usually optimal for project based organizations with fluctuating workloads?

(a) Functional.

(b) Divisional

(d) Network.

Question 62

The right to self-determination and freedom from the control of others is called:

(a) Beneficence.

(b) Justice.

(d) Autonomy.

Question 63

An important activity in _______ is taking corrective action.

(a) Strategy formulation

(b) Strategy evaluation

(d) Strategy implementation

Question 64

For a culture to exist, it must be all of the following EXCEPT________.

(a) Shared by the vast majority of members.

(b) Be passed from generation to generation.

(d) Be distinct from decisions and behaviors.

Question 65

Advantages of the place design include all of the following except:

(a) Direct contact with customers in each locale.

(b) Managers in each market become generalists.

(d) Proximity to customers.

Question 66

A main force pushing toward a network structure is that an organizations has_________ core competencies.

(a) Undefined

(b) A few

(d) Independent

Question 67

A flat organizational structure creates a(n)______ span of control.

(a) Tall

(b) Narrow

(d) Centralized

Question 68

The term______refers to formal statements specifying acceptable and unacceptable behaviors and decisions by employees.

(a) Strategies

(b) Impersonality

(d) Rules

Question 69

________ refers to the lack of information regarding what needs to be done in a role, as well as unpredictability regarding the consequences of performance in that role.

(a) Time pressure

(b) Daily hassles

(d) Role ambiguity

(e) Role conflict

Question 70

The strategy that is based on an organization’s ability to provide a product or service at a lower cost than its rivals is referred to as________.

(a) Discount

(b) Differentiation

(d) Low-cost

Question 71

Paid-in Capital represents:

(a) Earnings retained for use in the business.

(b) The amount invested in the entity by the owners.

(d) Net assets of the entity at the date of the statement.

Question 72

(a) $836

(b) $872

(d) $1438

Question 73

The number of times interest charges are earned is computed as:

(a) Net income plus interest charges, divided by interest charges.

(b) Income before income tax plus interest charges, divided by interest charges.

(d) Income before income tax divided by interest charges.

Question 74

The tendency of the rate earned on stockholders equity to vary disproportionately from the rate earned on total assets is sometimes referred to as:

(a) Leverage.

(b) Solvency.

(d) Quick assets.

Question 75

Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?

(a) Internal rate of return

(b) Cash Payback

(d) Average rate of return

Question 76

Statements in which all items are expressed only in relative terms (percentages of a common bas )are:

(a) Horizontal statements.

(b) Percentage statements

(d) Common-size statements.

Question 77

The reason for recoding a prepaid expense as a current asset is:

(a) That the prepaid item will be returned for a cash refund.

(b) That the prepaid item has not yet become an expense.

(d) To avoid recognizing an expense so net income will be higher for the current accounting period.

Question 78

Current generally accepted Accounting Principles and auditing standards require that financial statements of an entity for the reporting period to include:

(a) Earnings and gross receipts of cash for the period.

(b) Projected earnings for the subsequent period.

(d) Current market values of all assets at the end of the period.

Question 79

(a) Ratio of fixed assets to long-term liabilities.

(b) Ratio of net sales to assets

(d) Rate earned on stockholders’ equity

Question 80

Sage, Inc has 20 employees who each earn $ 100 per day and are paid every Friday. The end of the accounting period is on a Wednesday.

(a) $2,000

(b) $1,000

(d) $6,000

Question 81

Testing the probability of a relationship between variables occurring by chance alone if there really was no difference in the population from which that sample was drawn is knows as:

(a) Multiple regression analysis.

(b) Chi-squared test.

(d) Significance testing.

Question 82

A Type II error is defined as ________.

(a) Rejecting a true null hypothesis

(b) Rejecting a false null hypothesis

(d) Not rejecting a false null hypothesis

Question 83

The numbers of rooms for 15 homes recently sold were (mean=7.4):8,8,8,5,9,8,7,6,6,7,7,7,7,9, and 9. What is the variance?

(a) 1.183

(b) 1.4

(d) 16

(e) 1.96

Question 84

Which of the following is an Excel add-in for simulation?

(a) Precision tree

(b) TopRank

(d) @Risk

(e) Riskview

Question 85

ANOVA is:

(a) A government body which collects social statistics.

(b) A two-way analysis variance.

(d) A one-way analysis of variance.

Question 86

Which of the following statements are false?

(a) The modeling process discussed in Data analysis & Decision making book is a five-step process.

(b) Dealing with uncertainty requires a basis understanding of probability.

(d) Data description and data inference are included under data analysis.

Question 87

In a criminal trial, a type II error is made when__________.

(a) A guilty defendant is acquitted

(b) An innocent person is convicted

(d) An innocent person is acquitted

Question 88

What is the name of the test that is used to assess the relationship two ordinal variables?

(a) Spearman’s rho.

(b) Phi.

(d) Chi square.

Question 89

Which one of the following would be considered a state of nature for a business firm?

(a) Inventory levels.

(b) Salaries for employees.

(d) Worker safety laws.

Question 90

The number of miles a truck is divine before it is overhauled is an examples of a(n)_______variable.

(a) Nominative

(b) Ordinal

(d) Ratio

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