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BUS 475 CAPSTONE FINAL EXAMINATION PART 1 – NEW

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All Possible Questions Are Below

From the following information calculate the net increase in cash.

• $88,780

• $18,620

• $13,220

• $23,380

Irvin’s Ice Creams a popular chain of ice cream parlors located only in the United States is looking for opportunities to grow its business. Which of the following suggestions, if provided by the company’s marketing manager, would present the least amount of risk to the firm?

• Leveraging the firm’s brand value by selling children’s toys

• Increasing sales by increasing the number of stores in the United States

• Selling Irvin’s branded clothing in a new market

• Selling its current products in an attractive new market

Claudia is a team lead in an organization. One day at work a team member Marc informs Claudia that he wants to speak to her about the problems that he faces at work. Marc tells her that he is being treated unfairly at work and that his colleagues often ridicule him because of his ethnicity. He goes on to say that his disturbed state of mind has caused a dip in the productivity and quality of his work. Claudia does not interrupt him when he is speaking and encourages him to talk openly. She also lets him know that she understands his situation and that his feelings are valid. In this scenario, Claudia is primarily engaged in __________.

• selective listening

• passive listening

• empathic listening

• defensive listening

Calculate the net working capital from the information given below. The figures are in millions of dollars.

• $(140)

• $520

• $610

• $1,030

TwissData Corp. is an electronics firm based in Damiya that manufactures motherboards. Because of a rapid growth in the personal computing industry, TwissData Corp. decides to produce personal desktops and laptops instead of motherboards. By doing so, which type of market-product strategy has TwissData Corp. applied?

• Product development

• Diversification

• Market penetration

• Market development

Zuckain Corp. has issued a 10-year coupon bond. The bond is issued at an annual coupon rate of 14%. The face value of the bond is $1,500, and the bond is currently trading at $1,232.56. Calculate the bond’s yield to maturity.

• 64%

• 32%

• 25%

• 95%

The current price of Latera Corporation’s common stock is $45 per share. The company expects to pay a dividend of $3.30 per share during the next year. The expected growth rate of the stock is 12%. Calculate the cost of equity using the constant-growth model.

• 33%

• 60%

• 64%

• 33%

General Pharmacy’s stock has a beta of 1.8 and an expected return of 14%, and Sicoras Corp.’s stock has a beta of 1.5 and an expected return of 16.2%. Assuming capital-asset pricing model holds, calculate the return on the market portfolio.

• 3%

• 2%

• 6%

• 9%

In 2006, Dexel Electronics Inc. introduced audio systems in the market for electronic gadgets. Because of an increase in sales volume as well as a growing proportion of repeat purchasers, the company has now upgraded the old version of audio systems by introducing new features. Given this information, in which stage of the product life cycle does Dexel Electronics lie?

• Growth

• Decline

• Introduction

• Maturity

FarmFresh Inc. partners with multiple retailers to sell its organic products. If stocks fall below a product’s threshold, the retail managers raise purchase orders to FarmFresh. It takes two days for FarmFresh to process the orders and dispatch the products. The process proves to be ineffective when the retail stores do not have the stock to meet a sudden increase in demand. How can supply chain management (SCM) systems solve this problem and make the process more efficient?

• The retail stores can track the status of a shipment.

• Managers from the retail stores can raise purchase orders over telephone.

• FarmFresh can have real-time access to sales information.

• Customers can track the status of a product delivery.

LaBelle, a famous cosmetic brand, introduces a new skin cleanser. Initially, the product does extremely well and reaps huge profits for the company. After using the product for few months, consumers having acne complain of rashes and allergies. An external chemical agency accuses that the company used a harsh chemical that causes allergies to people with acne, and it did not include it on the ingredients list displayed on the product’s label. These harsh chemicals did not cause allergies to people with normal skin. When enquired, the company’s CEO confesses that the products would have not done so well if they had listed the chemical. The company can be charged with __________.

• battery

• fraud

• defamation

• Assault

Ricalta Inc. earns a total of $500,000 before interest and taxes. Its total debt is $1,110,000 (costing 5%). It has 150,000 shares of common stock at $5 per share. The firm is considering reducing its debt by $450,000 by issuing an additional 90,000 shares of common stock. The firm is in the 35 percent tax bracket. Its earnings before interest and taxes will remain the same as the new capital structure will not impact the firm’s operations. Which of the following will be a consequence of the change in Ricalta’s capital structure?

• The firm’s earnings before taxes (EBT) will remain unchanged.

• The firm’s net income will decrease by $14,625.

• The firm’s earnings per share (EPS) will be reduced by $0.66.

• The firm’s net income will increase by $10,625.

The capital structure of Wilken Corporation is given below.

Calculate the weighted average cost of capital (WACC).

Additional details are as follows:

• 35%

• 65%

• 75%

• 45%

Mirabel Inc. has recently ventured into the home cleaning supplies market with its very own floor cleaner, Flofix, which does not contain any harmful chemicals such as phenol. The company has used aggressive marketing strategies and innovative advertising campaigns to promote the product. The company’s revenue analysis shows that the sales for the product are increasing steadily. However, when the market survey team of the company surveyed a large number of consumers in the target market, the consumers mentioned that they had not switched over to the new brand of floor cleaner. Which of the following, if true, best explains how the sales for the company went up in spite of consumers not purchasing the product?

• People prefer to use products that they are familiar with rather than trying out new products.

• Organizational buyers purchase new products before consumers do.

• Consumers sometimes wait to see how well a product performs in the market before purchasing it.

• Mirabel Inc. did not invest equal amounts of money on its different advertising campaigns.

A popular hypermarket chain came under criticism for failing to protect the e-mail addresses and credit card details of 50,000 customers. CloudCom Inc., a web services company, identified that the lapse was because of a worm that had breached the hypermarket’s internal servers through an unauthorized e-mail, and that the anti-malware system failed to catch the worm. Which of the following actions should CloudCom take to restrict such malwares from entering the hypermarket’s internal network?

• Install a firewall

• Use a virtual private network to connect its users

• Whitelist the malware

• Update the anti-malware system’s database

Robert, an ardent blogger, is approached by the marketing manager of LaBelle, a famous cosmetic brand, to write positive reviews about the company’s products. Robert knows that the company’s products cause allergic reactions and to write positive reviews about the products would be unethical. Which of the following decisions will be considered an ethical lapse?

• To write positive reviews about the product

• To turn down the company’s offer

• To write a review after testing the product

• To inform people about the products’ allergic reactions

After a series of thefts in an organization, the management is considering whether or not to install cameras inside the office. The management is torn between violating the privacy of employees and preventing future thefts from taking place. This scenario illustrates an __________.

• ethical dilemma

• ethical lapse

• absence of codes of professionalism

• absence of codes of ethics

Kwalkon Computing released a new software update for their calendar app. The update synchronizes both personal and business calendars seamlessly. The update has all the relevant bug fixes and promises to make the app work faster. Since there have been no recent complaints about the software, the update must have solved all the customers’ issues. Which of the following questions would be most relevant in evaluating the argument?

• Has enough time passed after the release of the update?

• What is the memory required in order to install the update?

• What is the pace at which the updated app will perform its functions?

• Has Kwalkon released any updates for their other software applications?

Hailey’s Food Inc. sells fish sticks at $3.00 a box. The government passes a law requiring sellers of food products to pay $0.50 as tax for each product they sell. Hailey’s has to pay the government $0.50 for every box of fish sticks it sells. The company decides to trade down to compensate for the tax. Which of the following is a likely outcome of the company’s decision?

• The company will increase the price of one box of fish sticks to $3.50 while also increasing the package size.

• The company will sell fish sticks worth $2.50 at $3.00 per box.

• The company will increase the price and quantity of fish sticks.

• The company will continue to sell the same quantity of fish sticks at the same price.

Michael deposits $35,000 today in his bank account. Calculate the approximate amount he will have at the end of six years if interest is 10% per year and is compounded semiannually.

$115,560

$70,060

$50,180

$62,860

Irvin’s Ice Creams, a popular chain of ice cream parlors present only in the United States, is looking for opportunities to grow its business. If the firm conducts a SWOT analysis of its performance, which of the following would be categorized as a threat?

• The growing demand for ice creams in international markets

• The entry of international ice cream brands in the U.S. market

• The firm’s inability to scale up in terms of revenue

• The firm’s positive brand value among customers

The intensive 45-day training program for new employees at Zed Inc. requires trainees to take several tests that trainers at Zed Inc. have to grade. Recently, there has been a 30% increase in hiring. With the present number of trainers, it is not possible to finish grading all the tests in time.

HR manager: The training team should transfer all the tests for the trainees to software that will grade them automatically. Our hiring budget will not allow the hiring of additional people to manage the increased number of trainees. Using auto-grading software will not require any funds from our hiring budget.

Which of the following is assumed by the HR manager?

• Using auto-grading software will allow Zed Inc. to support all of its potential training needs in the future.

• Trainees will need a shorter duration of time to answer the tests after the auto-grading software is implemented.

• Zed Inc. will not need to hire additional people to operate the auto-grading software.

• The duration of the training cannot be reduced without negatively affecting the quality of the training.

Hush Sports Inc., sellers of sportswear, transitioned from being just a brick-and-mortar store to an online marketplace for sports goods. Hush Sports still relied on customers to call the store for feedbacks or complaints. To speed up the process, the company updated its Web site with options for the customers to review the products they purchased. Positive reviews attracted more customers, and negative reviews helped the company improve its products. Which of the following strategies has Hush Sports included in its business process?

• Crowdsourcing

• Cooperative advertising

• Blogging

• Conversational marketing

A shift in the demand curve for pretzels increases the price of pretzels from $1.25 to $1.75 and its quantity demanded from 30 million to 35 million. The price elasticity of demand for pretzels is _____.

5 million pretzels per dollar

2.32

$1.50 per pretzel

0.46

Dupon Inc. is a leading manufacturer of handheld game consoles. Each console manufactured by the firm has a different game. Although the video game industry faced a sharp decline in demand with the introduction of mobile games, Dupon still holds a significant market share for handheld games compared to its competitors. To hold the market share, Dupon provides discounts to customers purchasing more than one console. Which of the following stages of the product life cycle is Dupon’s products going through?

• The decline stage

• The growth stage

• The maturity stage

• The introduction stage

LaBelle, a famous cosmetic brand, introduces a new skin cleanser. The company pays bloggers to write positive reviews about the product. The consumers who follow these blogs assume that the bloggers are sharing their personal experiences and decide to try the product. They are unaware that the blogs are part of a marketing campaign. After a few days of using the product, they complain of rashes and allergies. The bloggers can be charged with __________.

• assault

• negligence

• battery

• Defamation

Mark is expected to receive $950 at the end of two years. Calculate the present value of this amount if the discount rate is 6%.

• $1690.99

• $896.23

• $845.50

• $1792.45

Marketers at Cream & Fresh Ice Creams update the company’s web site and online journals regularly with information about new ice creams. Readers who are interested in the articles updated on the company’s web site and online journals share the links with their friends who further share it with more people. Some readers try the ice creams and add their own comments to the web site and online journals. Which of the following strategies is the company using to promote its products?

• Telemarketing

• Wholesaling

• Stealth marketing

• Blogging

Managers at Hush Sports Inc., leading manufacturers of sports apparel, are contemplating manufacturing high-end maple baseball bats. To understand the existing demand for the product, the marketing managers decide to set an online campaign, promoting the product through blogs, videos, and interactive forums. Which of the following approaches should the company adapt in its campaign?

• Posting messages that the company would not prefer to convey to an audience face-to-face

• Replying to the consumer queries about the advantages of using high-end maple baseball bats

• Restricting the consumers from posting comments on the company’s Web site

• Withholding information that would cause potential concern over the product’s quality

Sophie owns SugarCream bakery that produces 20 pastries in a day. The price of one pastry is $12. If she hires another worker, she will be able to produce 24 pastries in a day. Assuming that she operates in a competitive market and aims to maximize her profits, she decides not to hire the additional worker. Which of the following explains why Sophie did not hire the additional worker?

• The cost of hiring the additional worker was greater than the value of producing additional pastries.

• The cost of hiring the additional worker was less than the average product of the additional worker.

• The cost of hiring the additional worker was less than the marginal product of the additional worker.

• The opportunity cost of hiring the additional worker was zero.

Rikan Inc.’s credit sales for the year 2016 are $5,000,000, and its gross profit is $1,500,000. The company’s average inventories are $595,000. Its average accounts receivable is $750,000 and average accounts payable is $640,000. From this information, calculate the company’s cash cycle. (Round the answer to one decimal.)

50.1 days

199.5 days

36.8 days

183.5 days

Sam’s stores, a popular retail store, uses barcode scanners to scan each product that it sells. The data generated from the scanners are saved in a database. The database is updated every time a product is scanned and sold. This computer-based information system helps managers access and analyze sales data. Which of the following systems is the store using for its business?

Transaction processing system

Supply chain management system

Expert system

Electronic commerce system

Colneith Corp. is a pharmaceutical firm that mainly produces drugs for Alzheimer’s disease. The Medical Association of Zachary Islands conducted a study on the effectiveness of the firm’s drugs and found that multiple dosages of drugs were fatal. This discovery would most likely lead to:

• short-run profits for the firm.

• a decline in the production of the drug.

• an increase the production of the drug.

• the exit of the firm from the market.

Dupon Inc., a leading manufacturer of handheld game consoles, decides to enter the global marketplace. It decides to sell its products directly in a foreign country. The foreign government denies permission to the company on the grounds of protecting domestic manufacturers. However, the government is willing to change its decision if the company contributes to local employment. Which of the following strategies of entering the foreign market will present the least risk to the company while also meeting the government’s condition?

• Direct exporting

• Joint venture

• Direct investment

• Contract assembly

Which of the following alternatives will give the lowest present value?

• Receiving $650 at the end of three years at an interest rate of 10% compounded annually

• Receiving $500 at the end of three years at an interest rate of 11% compounded annually

• Receiving $450 at the end of two years at an interest rate of 9% compounded annually

• Receiving $550 at the end of two years at an interest rate of 8% compounded annually

Tony holds 350 shares of a company’s stock. At the end of 2015, the market price of each share was $32. During the year 2016, the company pays $2.25 in dividends per share. At the end of 2016, the company’s stock is priced at $39.50. Calculate the percentage return for holding the company’s stock during the year 2016. (Round the answer to one decimal place.)

• 8%

• 5%

• 6%

• 4%

Rodriquez works as a scriptwriter in an advertising agency. He has been assigned the task of developing a script for a television commercial. He prepares a rough draft of the script and submits it to his manager, Carl. Carl reads the script but derives a different meaning from it than what Rodriquez intended. According to the basic communication model, which of the following will be the next step?

• Carl will refuse to provide feedback to Rodriquez.

• Carl will respond with his interpretation of the script.

• Rodriquez will be asked to narrate his script to an audience.

• Rodriquez will choose a communication channel to transmit his message.

The owners of Brizzels’ Food Truck send live notifications to their customers when their truck is close to the customers’ locations. Their strategy was in response to a customer’s blog post about having to wait for long hours till the truck arrives. Which of the following strategies does this scenario illustrate?

• Social commerce

• Social intelligence

• Social publishing

• Social analytics

Managing Director: Our business has expanded over the past couple of years. The profit margin and revenue earned have both gone up. On careful analysis of our client base, we have found that all of our clients belong to the same culture as us. They also hold ethical values that are similar to ours. Based on this finding, it would be best if our company stops training our employees on cultural sensitivity and instead gives our employees specialized training in market research analysis.

The Managing Director’s argument is flawed because it:

• disregards the influence that a training on cultural sensitivity could have on the company’s profit margin.

• fails to consider that the suppliers for the company might belong to a different culture than the clients.

• takes for granted the continued increase in revenue that the company will experience.

• assumes that training in market research analysis is less expensive than training in cultural sensitivity.

Calculate the cost of preferred stock from the information given below:

• 73%

• 27%

• 45%

• 98%

When Ronike Ltd. decided to change its logo, it encouraged its employees to get involved in the decision-making process. Employees were asked to engage in brainstorming sessions by forming groups and working together in teams. Which of the following is a likely outcome of their teamwork?

• Increased diversity of views among team members will help improve decision making.

• The dangers of groupthink will be reduced.

• Team members are less likely to support the final decision regarding the change in logo.

• Team members who have hidden agendas will be automatically filtered and removed.

Harry is receiving a loan of $3,000 from his friend to pay off some outstanding bills. The loan is structured in such a manner that the interest rate is 6% for the first year, after which the interest rate increases by 2% per year until the loan is paid. Calculate the amount that Harry will have to pay his friend if he waits for a period of four years to pay off the loan. (Round the answer to one decimal place.)

• $4,231.20

• $4,005.50

• $3,777.80

• $2,127.10

Five years ago, Rigatani Corp. introduced its new energy drink, Energize. According to recent market surveys, the product is in its decline stage. At the same time Energize was introduced, Panne Inc. introduced White Unicorn, another new energy drink. Therefore, White Unicorn must also be in its decline stage now.

Which of the following is an assumption on which the conclusion is based?

• Market surveys are not a reliable method to determine the stages in a product’s life cycle.

• Consumers have realized that the presence of caffeine in energy drinks is detrimental to their health.

• Both products were not well received in the market.

• White Unicorn did not spend more time in the maturity stage than Energize did.

Rosa Maria attends an interview for a sales manager position at Pixxels Inc. As part of the interview process, she is asked to reveal personal information. The company gets Rosa’s consent to share the information with a security company for background verification. Which of the following actions, if taken by the security company, will be unethical?

• Contacting Rosa’s previous employer for verification

• Selling Rosa’s personal information to a third party

• Requesting for additional information

• Providing Pixxels Inc. reports on Rosa’s online behavior

The government of Seronia is deeply concerned about the rate of obesity in the country. It has framed a policy that requires food and beverage manufacturers to be taxed according to the sugar and fat content in their products. This will make high-sugar and high-fat products more expensive for consumers. The government believes that this policy will surely benefit the health of Seronian citizens.

Which of the following statements, if true, would undermine the government’s argument?

• The policy is not applicable to food products that are not manufactured within Seronia.

• Recent campaigns done by nutritionists have increased consumer awareness about the adverse effects of a high-calorie diet.

• The Seronian government’s expenditure on providing health care to its citizens has steadily increased over the last ten years.

• Consumers tend to decrease the consumption of some healthy food products to afford the prices of high-sugar and high-fat products, which are tastier.

Marketing head of Tosel Inc.: Our company has been using an advanced CRM platform, Inito, which is popular among businesses for its sophisticated functionality. Inito allows us to store customers’ psychographic data as well as their recent shopping behavior. However, since we began using Inito, we have not been able to generate a significant greater number of leads. Clearly then, using CRM software does not help in generating any business.

Which of the following statements, if true, would weaken the argument above?

• It is difficult to create a successful marketing strategy for a customer base that greatly varies in demographic and psychographic factors.

• Inito is the most commonly used CRM platform.

• Tosel has integrated Inito into the other information systems used by the company.

• Tosel has not invested the resources required to maintain its database of customers’ psychographic data and shopping behavior.

Cream & Fresh Ice Creams pays bloggers to write positive reviews about its ice creams. Readers who are interested in the product read these reviews and share the link with their friends who further share the reviews with more people. Some readers try the ice creams and add their own comments to the blog. Which of the following strategies is the company using to promote its products?

• Stealth marketing

• Wholesaling

• Online word-of-mouth marketing

• Telemarketing

In 2005, Susana purchased a 7-year zero coupon bond for $967.23. The face value of the bond was $1,200. Calculate the capital gain on this bond in 2006.

• $42.56

#BUS 475 CAPSTONE FINAL EXAMINATION PART 1 – NEW

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studentehelp8 · 8 years ago

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BUS 475 CAPSTONE FINAL EXAMINATION PART 2

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BUS 475 Capstone Final Examination Part 2

This is the latest BUS/475 Capstone Final Examination Part 2 (100%)

1. Which of the following is not a current liability on December 31, 2014?

· A lawsuit judgment to be decided on January 10,2015

· A Note Payable due December 31 2015

· Accrued salaries payable from 2014

· An Accounts Payable due January 31,2015

2. Continuous monitoring, in the contemporary approach, is beneficial because_____________.

· it increases the time it takes to detect changes in the competitive environment

· organization response time is increased

· organizational flexibility is reduced

· It reduces time lags

3. The acquisition of treasury stock by a corporation:

· requires that a gain or loss be recognized on the income statement.

· increases its total assets and total stockholders’ equity.

· has no effect on total assets and total stockholders’ equity.

· decreases its total assets and total stockholders’ equity.

4. You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard deviation of 14 days. For an upcoming ad campaign, you need to know the percent of the pairs that last longer than six months-that is, 180 days. Use the empirical rule to approximate this percent.

· 97.5%

· 95%

· 2.5%

· 5%

5. __________involves ensuring proper strategic controls and organizational designs.

· Corporate governance

· Strategy implementation

· Business-level strategy

· Corporate-level strategy

6. A post-closing trial balance will show:

· only income statement accounts

· zero balances for balance sheet accounts

· only balance sheet accounts

· zero balances for all accounts

7. The preparation of adjusting entries is:

· straightforward because the accounts that need adjustment will be out of balance

· needed to ensure that the expense recognition principle is followed.

· only required for accounts that do not have a normal balance.

· optional when financial statements are prepared.

8. In a simple linear regression model, if the plots on a scatter diagram lie on a straight line, what is the standard error of the estimate?

· Infinity

· 0

· +1

· -1

9. The fraud triangle applies to:

· U.S. and Canadian companies, but not other international companies.

· U.S companies but not international companies.

· U.S and international companies.

· international companies but not U.S. companies.

10. According to value-chain analysis, which of the following would be considered part of the general administration in a firm?

· information systems

· procurement

· technology development

· human resource management

11. Which of the following can be represented by a discrete random variable?

· The circumference of a randomly generated circle

· The number of defective light bulbs in a sample of five

· The time of a flight between Chicago and New York

· The average distance achieved in a series of long jumps

12. What is an advantage of the correlation coefficient over the covariance?

· It falls between 0 and 1.

· It falls between -1 and 1.

· It falls between -1 and 1; and it is a unit free measure, therefore making it easier to interpret.

· It is a unit-free measure, therefore making it easier to interpret.

13. GAAP, compared to IFRS, tends to be more:

· rules-based

· simple in accounting requirements

· principles-based

· simple in disclosure requirements

14. The resource-based view (RBV) of the firm combines two perspectives:

· the internal analysis of the firm and the external analysis of the industry and competitive environment

· the primary and support activities of the firm

· the industry and the competitive environment

· the interrelationships among the primary activities of the firm and corporate management

15. Sarbanes Oxley applies to:

· U.S and international companies.

· U.S. and Canadian companies but not other international companies.

· U.S companies but not international companies.

· international companies but not U.S. companies.

16. Is it possible for a data set to have no mode?

· No, unless there is an odd number of observations

· Yes, if two observations occur twice

· Yes, if there are no observations that occur more than once

· No, if the data set is nonempty, there is always a mode

17. Under the accrual basis of accounting:

· events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.

· the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.

· cash must be received before revenue is recognized.

· net income is calculated by matching cash outflows against cash inflows.

18. Which trial balance will consist of the greatest number of accounts?

· Trial balance

· Adjusted trial balance

· Balance

· Post-closing trial balance

19. Vertical analysis is a technique that expresses each item in a financial statement:

· in dollars and cents.

· as a percent of a base amount.

· as a percent of the item in the previous year.

· starting with the highest value down to the lowest value.

20. Cost allocation of an intangible asset is referred to as:

· accretion

· amortization

· depreciation

· capitalization

21. According to the text, the triple bottom line approach to corporate accounting includes three components:

· financial, environmental, and social

· financial, organizational, and customer

· financial, environmental, and customer

· financial, organizational, and psychological

22. An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a 5-year period is based on personal assessment. This type of probability is best characterized as a(n) ____________.

· Subjective probability

· Objectivity probability

· Empirical probability

· A priori probability

23. Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was:

· 2-for-8

· 1-for-8

· 8-for-1

· 4-for-1

24. Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is:

· the expectation that business will strive to improve the overall welfare of society

· the fact that court costs could impact the financial bottom line

· the idea that organizations are solely responsible to local citizens

· the idea that businesses are responsible to maintain a healthy social climate for their employees

25. Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally:

· expensed when incurred.

· not recorded until they become material in amount.

· debited to the Accumulated Depreciation account.

· capitalized as a part of the cost of the asset.

26. For both qualitative and quantitative data, what is the difference between the relative frequency and the percent frequency?

· The relative frequency equals the percent frequency multiplied by 100.

· The percent frequency equals the relative frequency multiplied by 100

· As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set.

· As opposed to the percent frequency, the relative frequency is divided by the number of observations in the data set.

27. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________.

· using related diversification to achieve value by leveraging core competencies to achieve economies of scope

· using related diversification to achieve value by pooling negotiating power to achieve market power

· using related diversification to achieve value by integrating vertically in order to attain economies of scope

· using related diversification to achieve value by integrating vertically in order to acquire market power

28. Which of the following can be represented by a continuous random variable?

· The average temperature in Tampa, Florida, during the month of July

· The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays

· The number of students who will get financial assistance in a group of 50 randomly selected students

· The number of typos found on a randomly selected page of this test bank

29. Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company's checkbook for subsequent misappropriation of funds?

· An accounting policies manual

· Tracing any debit memorandums from the bank to the company's records

· A review of the cash budget

· The use of pre-numbered checks

30. A SWOT analysis is a framework for analyzing a firm’s environments. A SWOT is made up of

· Internal environmental analysis of threats and weaknesses.

· Internal strengths and weaknesses; external threats and opportunities.

· Internal threats and weakness and external strengths and opportunities.

· External analysis of strengths and opportunities.

31. Trumpeting Trumpets has the following inventory data:

July 1: Beginning inventory

30 units at $120

July 5: Purchases

180 units at $112

July 14: Sale

120 units

July 21: Purchases

90 units at $115

July 30: Sale

84 units

Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

· $23,088

· $11,022

· $10,992

· $23,118

32. Which of these statements regarding the industry life cycle is correct?

· It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously.

· Trends suggested by the market life cycle model are generally not reversible or repeatable.

· It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives.

· Part of the power of the market life cycle is its ability to serve as a short-run forecasting device.

33. What is a difference between merchandising companies and service enterprises?

· Merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements.

· Cost of goods sold is an expense for service enterprises but not for merchandising companies.

· The operations in merchandising companies and service enterprises are identical.

· Merchandising companies generally have a longer operating cycle than service enterprises.

34. Which of the following meets the requirements of a simple random sample?

· A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six males chosen at random, without regard to age.

· A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people who volunteer for the sample.

· A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people chosen at random, without regard to age.

· A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include two people chosen at random under the age of 25 and four people chosen at random over 25.

35. The acquisition of treasury stock by a corporation:

· increases its total assets and total stockholders’ equity.

· requires that a gain or loss be recognized on the income statement.

· has no effect on total assets and total stockholders’ equity.

· decreases its total assets and total stockholders’ equity.

36. WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a:

· Vision statement

· Vague statement of direction

· Strategic objective

· Line manger’s individual goal

37. If a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?

· $400,000

· $120,000

· $4,000,000

· $280,000

38. International Financial Reporting Standards (IFRS):

· implies that receivables with different characteristics should be reported separately.

· implies that receivables with different characteristics should be reported as one un-segregated amount.

· requires that receivables with different characteristics should be reported as one un-segregated amount.

· requires that receivables with different characteristics should be reported separately.

39. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows.

· Does not represent a cash flow.

· Operating activities section.

· Financing activities section.

· Investing activities section.

40. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________.

· using related diversification to achieve value by integrating vertically in order to acquire market power

· using related diversification to achieve value by leveraging core competencies to achieve economies of scope

· using related diversification to achieve value by pooling negotiating power to achieve market power

· using related diversification to achieve value by integrating vertically in order to attain economies of scope

41. In multiple regression, plot the residuals against ____ to detect changing variability.

· The response variable

· The predicted values

· Collinear variables

· All explanatory variables

42. On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31st balance sheet should report what balance in their supplies account?

· $2,800

· $1,500

· $1,600

· $2,900

43. Which of the following requirements about internal controls were enacted under the Sarbanes Oxley Act:

· Companies must assess the functionality of internal controls only when a violation occurs.

· Companies must develop sound internal controls over financial reporting.

· Independent outside auditors must eliminate redundant internal controls.

· Internal auditors replace independent outside auditors when evaluating the level of internal control.

44. The four key attributes of strategic management include the idea that:

· Strategy must be focused on competitor strengths.

· Strategy must be directed toward overall organizational goals and objectives.

· Strategy must be focused on one specific area of an organization.

· Strategy must be focused on long-term objectives.

45. Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets?

· Statement of cash flows

· Retained earnings statement

· Income statement

· Balance sheet

46. When collection is made on Accounts Receivable,

· total assets will decrease.

· stockholders equity will increase.

· total assets will increase.

· total assets will remain the same.

47. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO?

· $12,600

· $9,000

· $6,300

· $1,800

48. Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate?

· Cell phone manufacturing

· Custom cabinet making

· Computer assembly

· Technical support by phone

49. Interest may be included in the acquisition cost of a plant asset:

· if the asset is purchased on credit.

· during the construction period of a self-constructed asset.

· if it is a part of a lump-sum purchase.

· if the asset acquisition is financed by a long-term note payable.

50. The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise?

· Median only

· Mean and median only

· Mean only

· Mean, median, and mode

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