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ACC 564 Week 9 Discussion Questions – Strayer NEW
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Week 9 Discussion 1
"Systems Analysis" Please respond to the following:
Implementing a new AIS system could prove to be beneficial or detrimental to an organization’s IT infrastructure. Assess the risks associated with integrating a new AIS system and suggest what management can do to minimize those risks.
You have been selected as the change agent for the implementation of a new AIS system that will ultimately affect the way all employees complete their daily tasks. The new AIS system will also require online approvals for all source documents. This will result in significant cost savings for the firm; however, in the past, employees have been resistant to radical changes such as this. Evaluate the risks and rewards of such a move by the firm. Provide specific examples to support your response.
Week 9 Discussion 2
"AIS" Please respond to the following:
You are part of a project management team evaluating accounting software packages that could be used by S&S (i.e., the case company referenced in Chapters 1 through 4), which would incorporate its four basic transaction cycles. Suggest five factors that the team should consider when selecting the package. Rank the factors in order of importance, and then justify your ranking.
From the e-Activity, evaluate two different software packages and propose how you would promote one package over the other to the management committee. Provide specific examples to support your response.
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ECO 302 Week 9 Quiz - Strayer
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Chapter 14 and 15
TRUE/FALSE
1. When a country has a deficit, its debt is growing.
2. A pay as you go social security system raises the capital stock.
3. If government budget is in deficit, then real government saving is in surplus.
4. If the government runs a deficit, households will feel wealthier.
5. A budget deficit caused by changing labor income taxes changes the labor and production.
6. The debt-to-GDP ratio typically rises during a recession.
7. The major peaks in the ratio of public debt to GDP in the U.S. reflect expenditures on Social Security.
8. Real national saving equals net investment.
9. Real government saving is positive when the real public debt increases.
10. If government expediture exceeds government revenue, then the government has a budget surplus.
MULTIPLE CHOICE
1. The governments sources of funds include:
a. taxes. c. borrowing.
b. printing money. d. all of the above.
2. The governments sources of funds include:
a. taxes. c. paying interest on past bonds.
b. government purchases. d. all of the above.
3. The governments sources of funds include:
a. transfer payments. c. paying interest on the government debt.
b. printing money. d. all of the above.
4. The governments sources of funds include:
a. government purchases. c. borrowing.
b. transfer payments. d. all of the above.
5. The governments uses of funds include:
a. government purchases. c. paying interest on the past government debt.
b. transfer payments. d. all of the above.
6. The governments uses of funds include:
a. government purchases. c. printing money.
b. borrowing. d. all of the above.
7. The governments uses of funds include:
a. printing money. c. taxes.
b. transfer payments. d. all of the above.
8. The governments uses of funds include:
a. borrowing. c. paying interest on the past government debt.
b. printing money. d. all of the above.
9. A balanced government budget is one where:
a. government purchases equal taxes. c. the governments real savings is zero.
b. government debt is zero. d. all of the above.
10. Total bond holding of all households is Bgt because:
a. the quantity of all private bonds held by the public is zero. c. the public views government bonds as less risky than private bonds.
b. the quantity of all government bonds held by the public is zero. d. the public views private bonds as less risky than government bonds.
11. Total bond holding of all households is equal to
a. the quantity of all private bonds. c. the quantity of all private bonds plus all government bonds.
b. the quantity of all government bonds. d. the quantity of all private bonds minus all government bonds.
12. If money and the price level are constant, then the government’s real budget deficit is:
a. (Bgt - Bgt-1)/P. c. (Bt + Bgt)/P.
b. Bgt/P. d. none of the above.
13. If money and the price level are constant, then the government’s real budget debt is:
a. (Bgt - Bgt-1)/P. c. (Bt + Bgt)/P.
b. Bgt/P. d. none of the above.
14. If the government reduces taxes by $1 this year without raising taxes or printing more money, then
a. future tax liabilities will rise by $1 plus the interest, R, that must be paid on the borrowing. c. future tax liabilities will fall by $1 plus the interest, R, that must be paid on the borrowing.
b. future tax liabilities will rise by $1 less the interest, R, that must be paid on the borrowing. d. future tax liabilities will fall by $1 less the interest, R, that must be paid on the borrowing.
15. Ricardian equivalence implies that a government budget deficit:
a. increases current consumption. c. reduces national saving.
b. increases future tax liabilities. d. all of the above.
16. Ricardian equivalence holds:
a. only for year to year changes in the governments budget. c. only with a government deficit not a surplus.
b. no matter how long until the bonds are to be paid off. d. only with a government surplus not a deficit.
17. A strategic budget deficit is designed to:
a. increase GDP. c. constrain the behavior of future governments.
b. increase economic activity. d. all of the above.
18. The standard view of the budget deficit is that it:
a. reduces the GDP in the long run. c. reduces the capital stock in the long run.
b. reduces investment. d. all of the above.
19. The standard view of the budget deficit is that it:
a. reduces the GDP in the long run. c. increases the capital stock in the long run.
b. increases investment. d. all of the above.
20. The standard view of the budget deficit is that it:
a. increases the GDP in the long run. c. increases the capital stock in the long run.
b. reduces investment. d. all of the above.
21. The standard view of the budget deficit is that it:
a. increases the GDP in the long run. c. reduces the capital stock in the long run.
b. increases investment. d. all of the above.
22. The standard view of the budget deficit is that a deficit:
a. does not affect the economy in the long run. c. does not affect the economy in the short run.
b. and the public debt are a burden on the economy. d. encourages economic growth.
23. Households may feel wealthier due to a tax cut, if:
a. they are very concerned about future generations. c. they are using an infinite planning horizon.
b. they expect the bonds created by the deficit to be paid off after their lifetime. d. they plan to leave a bequest to their heirs.
24. Households may feel wealthier due to a tax cut, if:
a. they are not able to borrow as much against future earnings as they wish. c. they care a lot about future generations.
b. they are not able to lend present earnings as much as they wish. d. they plan to leave a bequest to their heirs.
25. If households ignore effects on future generations, a pay as you go social security system:
a. reduces current national savings. c. reduces the future capital stock.
b. reduces investment. d. all of the above.
26. If households ignore effects on future generations, a pay as you go social security system:
a. reduces current national savings. c. raises the future capital stock.
b. raises investment. d. all of the above.
27. If households ignore effects on future generations, a pay as you go social security system:
a. raises current national savings. c. raises the future capital stock.
b. reduces investment. d. all of the above.
28. If households ignore effects on future generations, a pay as you go social security system:
a. raises current national savings. c. reduces the future capital stock.
b. raises investment. d. all of the above.
29. If households ignore effects on future generations when a pay as you go social security system starts, the then elderly:
a. have a positive income effect on their consumption. c. receive low returns on any taxes paid into the system.
b. receive benefits that in present value is less the present value of their contributions. d. all of the above.
30. If households ignore effects on future generations, when a pay as you go social security system starts, the then elderly:
a. have a negative income effect on their consumption. c. receive low returns on any taxes paid into the system.
b. receive benefits that in present value is greater than the present value of their contributions to the system. d. all of the above.
31. If households ignore effects on future generations, a pay as you go social security system:
a. increases consumption. c. reduces national saving.
b. reduces the capital stock in the long run. d. all of the above.
32. If households ignore effects on future generations, a pay as you go social security system:
a. increases consumption. c. increases national saving.
b. increases the capital stock in the long run. d. all of the above.
33. If households ignore effects on future generations, a pay as you go social security system:
a. decreases consumption. c. raises national saving.
b. reduces the capital stock in the long run. d. all of the above.
34. If households ignore effects on future generations, a pay as you go social security system:
a. decreases consumption. c. reduces national saving.
b. increases the capital stock in the long run. d. all of the above.
35. If households ignore effects on future generations, a pay as you go social security system:
a. reduces investment. c. reduces private saving.
b. reduces GDP in the long run. d. all of the above.
36. If households ignore effects on future generations, a pay as you go social security system:
a. reduces investment. c. increases private saving.
b. increases GDP in the long run. d. all of the above.
37. If households ignore effects on future generations, a pay as you go social security system:
a. raises investment. c. raises private saving.
b. reduces GDP in the long run. d. all of the above.
38. If households ignore effects on future generations, a pay as you go social security system:
a. raises investment. c. reduces private saving.
b. increases GDP in the long run. d. all of the above.
39. A pay as you go social security system only increase consumption and reduces investment, if:
a. households leave bequests. c. if the planning horizon is overlapping generations.
b. if households neglect the adverse affects on their descendants. d. households increase their savings.
40. If currently alive households take full account of the negative affects of a pay as you go social security system on their descendants, then the:
a. effects are magnified. c. effects are exponential.
b. effects are nil. d. effects are unchanged.
41. Open market operations amount to:
a. printing more money and raising taxes and lowering taxes and raising the public debt. c. printing more money and raising taxes and lowering taxes and raising the public debt.
b. printing less money and reducing taxes and raising taxes and reducing the public debt. d. printing more money and reducing taxes and raising taxes and reducing the public debt.
42. By varying its budget deficit, a government can:
a. change the timing of taxes. c. avoid accumulation of government debt.
b. avoid having to raise taxes to pay for a deficit. d. all of the above.
43. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. real GDP does not change. c. real gross investment does not change.
b. real consumption does not change. d. all of the above.
44. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. real GDP does not change. c. real gross investment falls.
b. real consumption increases. d. all of the above.
45. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. real GDP does rise. c. real gross investment rises.
b. real consumption does not change. d. all of the above.
46. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. real GDP falls. c. real gross investment does not change.
b. real consumption falls. d. all of the above.
47. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. the interest rate does not change. c. the future capital stock does not change.
b. the real wage rate does not change. d. all of the above.
48. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. the interest rate rises. c. the future capital stock does not change.
b. the real wage rate falls. d. all of the above.
49. If the time path of government purchases does not change and the government cuts lump sum taxes, then:
a. the interest rate does not change. c. the future capital stock falls.
b. the real wage rate rises. d. all of the above.
50. If the time path of government purchases does not change and the government cuts current labor income taxes, then:
a. labor supply is shifted to the future. c. present GDP is reduced.
b. labor supply is shifted to the present. d. future GDP is increased.
51. If the time path of government purchases does not change and the government cuts current assets income taxes, then:
a. households save more and consume less in the present. c. households save less and consume more in the present.
b. households save and consume less in the present. d. households save and consume more in the present.
52. The major peaks in the ratio of public debt to GDP in the U.S. reflect
a. financing of wartime expenditures. c. major economic expansions.
b. financing of Social Security. d. major increases in technology.
53. In a business cycle recession, the debt-to-GDP ratio typically
a. falls. c. does not change.
b. rises. d. either (a) or (c).
54. In a business cycle recession, the debt-to-GDP ratio typically
a. falls because of an increase in debt. c. rises because of an increase in debt.
b. falls because of an increase in GDP. d. rises because of an increase in GDP.
55. In a business cycle recession, the debt-to-GDP ratio typically
a. falls because of an increase in debt. c. rises because of a decrease in debt.
b. falls because of an increase in GDP. d. rises because of a decrease in GDP.
56. In a business cycle expansion, the debt-to-GDP ratio typically
a. falls because of an increase in GDP. c. rises because of an increase in debt.
b. falls because of a decrease in GDP. d. rises because of a decrease in debt.
57. Assuming that the nominal quantity of money is constant and there is no inflation, if the real public debt decreases, the government budget shows
a. an increase in the real deficit. c. a decrease in private bonds.
b. an increase in real saving. d. a decrease in printing money.
58. Assuming that the nominal quantity of money is constant and there is no inflation, if the real public debt increases, the government’s
a. rate of money printing is greater than 50%. c. real saving is less than zero
b. real saving equals zero. d. rate of money printing is greater than zero.
59. A government budget surplus
a. is the same as the government’s real saving. c. means that government saving is positive.
b. means that government revenue exceeds its expenditure. d. all of the above.
60. Real national saving equals
a. the change in the capital stock. c. both (a) and (b).
b. net investment. d. net depreciation.
61. Real national saving is
a. the difference between government and household saving. c. both (a) and (b).
b. the sum of government and household saving. d. net depreciation.
62. An open-market operation in which the Federal Reserve purchases bonds will
a. increase the money supply and increase the price level. c. decrease the money supply and decrease real GDP.
b. decrease the money supply and increase the price level. d. decrease the money supply and increase real GDP.
63. An open-market operation in which the Federal Reserve sells bonds will
a. increase the money supply and increase the price level. c. decrease the money supply and decrease the price level.
b. decrease the money supply and increase real GDP. d. decrease the money supply and increase the price level.
64. An open-market operation in which the Federal Reserve purchases bonds will
a. decrease the money supply and increase real GDP. c. decrease the money supply and decrease real GDP.
b. increase the money supply but not change real GDP. d. increase the money supply and increase real GDP.
65. An open-market operation in which the Federal Reserve sells bonds will
a. decrease the money supply and increase real GDP. c. decrease the money supply and decrease real GDP.
b. increase the money supply and increase real GDP. d. increase the money supply but not change real GDP.
SHORT ANSWER
1. What is the government budget constraint when government borrowing is allowed?
2. What are public, private and national saving and what is the implication of real national saving?
3. What are the effects of the government lowering taxes by $1 for one period in the market clearing model with no transfer payments, the money stock fixed, no inflation and with a given time path of government purchases?
4. What is the Ricardian equivalence theorem?
5. Why might a budget deficit make households feel wealthier after a tax cut?
6. In the equillibrium business cycle model, what is the impact of an open market operation purchase by the Federal Reserve?
Chapter 15
TRUE/FALSE
1. If households misperceive prices, they may change real decisions in response to changes in the money supply in the long run.
2. If the actual price level is above the expected price level, then workers’ actual real wage will be below their expected real wage.
3. The real effect of a given monetary shock is larger the more stable the underlying monetary environment.
4. Money can only effect real variables in the short run, if people expect the increase in the money supply.
5. If monetary authorities follow a monetary rule, then monetary policy is more effective in affecting real variables like real GDP.
6. In the price-misperceptions model, market prices adjust to clear markets only very slowly.
7. In the price-misperceptions model, an increase in the price level increases the equilibrium labor input and capital services in the short- and long-run.
8. Discretionary monetary policy is more likely than a policy rule to promote a reputation for the central bank of promoting low inflation.
9. A formal provision in the law to target inflation requires secrecy about the central bank’s activities.
10. Discretionary monetary policy suffers from an incentive for the central bank to sometimes renege on its commitment to low inflation.
MULTIPLE CHOICE
1. We would expect households to have the most complete information about:
a. their own wage rate. c. products purchased occasionally like a automobile.
b. the wage rate available on other jobs. d. all of the above.
2. We would expect households to have the most complete information about:
a. the wage rate available on other jobs. c. products purchased occasionally like a automobile.
b. products they purchase frequently. d. all of the above.
3. We would expect households to have incomplete information about:
a. their own wage rate. c. products purchased occasionally like a automobile.
b. products they purchase frequently. d. all of the above.
4. We would expect households to have incomplete information about:
a. their own wage rate. c. wage rates available on other jobs.
b. products they purchase frequently. d. all of the above.
5. The workers’ perceived real wage rate is:
a. their nominal wage rate divided by the actual price level. c. their nominal wage rate divided by the expected price level.
b. the actual price level divided by their nominal wage rate. d. the expected price level divided by their nominal wage rate.
6. If the nominal wage is $10 per hour and the expected price level is 2 and the actual price level is 4, then:
a. the expected real wage rate is greater than the actual real wage rate. c. the expected real wage rate is greater than the actual nominal wage rate.
b. the expected real wage rate is less than the actual real wage rate. d. the actual real wage rate is greater than the actual nominal wage rate.
7. If the nominal wage is $10 per hour and the expected price level is 2 and the actual price level is 4, then expected real wage rate is:
a. $10. c. $2.50.
b. $5. d. none of the above.
8. If the nominal wage is $10 per hour and the expected price level is 2 and the actual price level is 4, then actual real wage rate is:
a. $10. c. $2.50.
b. $5. d. none of the above.
9. If the nominal wage is $10 per hour and the expected price level is 2 and the actual price level is 4, then actual nominal wage rate is:
a. $10. c. $2.50.
b. $5. d. none of the above.
10. If the nominal wage is $10 per hour and the expected price level is 5 and the actual price level is 4, then:
a. the expected real wage rate is greater than the actual real wage rate. c. the expected real wage rate is greater than the actual nominal wage rate.
b. the expected real wage rate is less than the actual real wage rate. d. the actual real wage rate is greater than the actual nominal wage rate.
11. If the nominal wage is $10 per hour and the expected price level is 2 and the actual price level is 4, then actual real wage rate is:
a. $10. c. $2.
b. $2.50. d. none of the above.
12. If the nominal wage is $10 per hour and the expected price level is 5 and the actual price level is 4, then expected real wage rate is:
a. $10. c. $2.
b. $2.50. d. none of the above.
13. If the nominal wage is $10 per hour and the expected price level is 5 and the actual price level is 4, then actual nominal wage rate is:
a. $10. c. $2.
b. $2.50. d. none of the above.
14. If the nominal wage rises from $10 per hour in period one to $15 per hour in period 2 as the expected price level rises from 1 to 3 while the actual price level rises from 4 to 5, then from period 1 to period 2:
a. the nominal wage is rising. c. the actual real wage is falling.
b. the expected real wage is rising. d. all of the above.
15. If the nominal wage rises from $10 per hour in period 1 to $15 per hour in period 2 as the expected price level rises from 1 to 3 while the actual price level rises from 4 to 5, then from period 1 to period 2:
a. the nominal wage is falling. c. the actual real wage is falling.
b. the expected real wage is falling. d. all of the above.
16. If the nominal wage rises from $10 per hour in period one to $15 per hour in period 2 as the expected price level rises from 1 to 3 while the actual price level rises from 4 to 5, then from period 1 to period 2:
a. the nominal wage is rising. c. the actual real wage is rising.
b. the expected real wage is falling. d. all of the above.
17. If the nominal wage rises from $10 per hour in period one to $15 per hour in period 2 as the expected price level rises from 1 to 3 while the actual price level rises from 4 to 5, then from period 1 to period 2:
a. the nominal wage is falling. c. the actual real wage is rising.
b. the expected real wage is rising. d. all of the above.
18. In the current period a perceived increase in the real wage, will cause households to:
a. work more. c. consume less leisure.
b. consume more goods. d. all of the above.
19. In the current period a perceived increase in the real wage, will cause households to:
a. work more. c. consume more leisure.
b. consume fewer goods. d. all of the above.
20. In the current period a perceived increase in the real wage, will cause households to:
a. work less. c. consume more leisure.
b. consume more goods. d. all of the above.
21. In the current period a perceived increase in the real wage, will cause households to:
a. work less. c. consume less leisure.
b. consume fewer goods. d. all of the above.
22. If the perceive real wage goes up, workers will supply more labor:
a. unless the actual real wage remains the same or falls. c. in the short run.
b. in the long run. d. all of the above.
23. If the perceive real wage goes up, real GDP increases:
a. unless the actual real wage remains the same or falls. c. in the short run.
b. in the long run. d. all of the above.
24. While price misperceptions can cause an increase labor supply and GDP in the short-run, in the long run:
a. money is neutral. c. labor supply returns to its initial position.
b. money does not affect real GDP. d. all of the above.
25. While price misperceptions can cause an increase in labor supply and GDP in the short-run, in the long run:
a. money is no longer neutral in the model. c. labor supply returns to its initial position.
b. money negatively impacts real GDP. d. all of the above.
26. While price misperceptions can cause an increase in labor supply and GDP in the short-run, in the long run:
a. money is neutral. c. labor supply ultimately declines.
b. money negatively affects real GDP. d. all of the above.
27. While price misperceptions can cause an increase in labor supply and GDP in the short-run, in the long run:
a. money is no longer neutral in the model. c. labor supply falls by more than its initial increase.
b. money does not affect real GDP. d. all of the above.
28. An increase in the money supply:
a. can affect real variables temporarily in the short run. c. can affect nominal variables in the long run.
b. can not affect real variables in the long run. d. all of the above.
29. An increase in the money supply:
a. can affect real variables temporarily in the short run. c. can affect real variables in the long run.
b. can not affect nominal variables in the short run. d. all of the above.
30. An increase in the money supply:
a. can not affect real variables temporarily in the short run. c. can not affect nominal variables in the long run.
b. can not affect real variables in the long run. d. all of the above.
31. An increase in the money supply:
a. can not affect real variables temporarily in the short run. c. can affect nominal variables in the long run.
b. can affect real variables in the long run. d. all of the above.
32. An increase in the money supply and inflation can only affect real variables only:
a. if households perceive it is happening. c. in the long run.
b. if households do not perceive all of the inflation. d. if households expect it.
33. In the short run if households’ perceived money growth and inflation equals the actual money growth and inflation, then
a. money affects real variables like labor supply. c. the model is still neutral even in the short run.
b. money affects real variables like GDP. d. all of the above.
34. Monetary policy authorities can only affect the real economy, if:
a. their actions are anticipated by the public. c. their actions are fully communicated to the public.
b. their actions are consistent and predictable. d. their actions systematically fool the public.
35. A monetary shock of a given size has a larger real effect:
a. the more it is anticipated by the public. c. the more fully it is explained and communicated to the public.
b. the more stable the underlying monetary environment. d. all of the above.
36. Price misperception during a positive technology shock would cause:
a. output or GDP to rise by less than it would without price misperception. c. the expected price level to fall less than the actual price level falls.
b. labor supply to rise by less than it would without price misperception. d. all of the above.
37. Price misperception during a positive technology shock would cause:
a. output or GDP to rise by less than it would without price misperception. c. the expected price level to fall more than the actual price level falls.
b. labor supply to fall by more than it would without price misperception. d. all of the above.
38. Price misperception during a positive technology shock would cause:
a. output or GDP to fall by more than it would without price misperception. c. the expected price level to fall more than the actual price level falls.
b. labor supply to rise by less than it would without price misperception. d. all of the above.
39. Price misperception during a positive technology shock would cause:
a. output or GDP to fall by more than it would without price misperception. c. the expected price level to fall less than the actual price level falls.
b. labor supply to fall by more than it would without price misperception. d. all of the above.
40. Discretionary monetary policy is when the monetary authority:
a. does not commit to future monetary actions. c. never produces a monetary surprise to households.
b. commits to future monetary actions. d. always behaves in a predictable way.
41. A monetary policy rule is when the monetary authority:
a. does not commit to future monetary actions. c. often produces a monetary surprise to households.
b. commits to future monetary actions. d. always behaves in unpredictable ways.
42. The price misperception model predicts:
a. the price level will be procyclical while in US data the price level is countercyclical. c. the real wage is countercyclical while in US data the real wage is procyclical.
b. the nominal quantity of money is procyclical and in US data money is weakly procyclical. d. all of the above.
43. The price misperception model predicts:
a. the price level will be procyclical while in US data the price level is countercyclical. c. the real wage is procyclical and in US data the real wage is procyclical.
b. the nominal quantity of money is countercyclical while in US data money is weakly procyclical. d. all of the above.
44. The price misperception model predicts:
a. the price level will be countercyclical while in US data the price level is countercyclical. c. the real wage is procyclical and in US data the real wage is procyclical.
b. the nominal quantity of money is procyclical and in US data money is weakly procyclical. d. all of the above.
45. The price misperception model predicts:
a. the price level will be countercyclical and in US data the price level is countercyclical. c. the real wage is countercyclical while in US data the real wage is procyclical.
b. the nominal quantity of money is countercyclical while in US data money is weakly procyclical. d. all of the above.
46. Real variables can only be affected by:
a. unperceived changes in the price level. c. expected changes in the price level.
b. perceived changes in the price level. d. actual changes in the price level.
47. Monetary policy can affect real variables in the short run if monetary policy:
a. surprises households. c. is unpredictable.
b. is random. d. all of the above.
48. Monetary policy can affect real variables in the short run if monetary policy:
a. surprises households. c. is predictable.
b. is consistent. d. all of the above.
49. Monetary policy can affect real variables in the short run if monetary policy:
a. is fully explained to households. c. is predictable.
b. is random. d. all of the above.
50. Monetary policy can affect real variables in the short run if monetary policy:
a. is fully communicated to households. c. is unpredictable.
b. is consistent. d. all of the above.
51. In the price-misperceptions model, market prices of goods, wage rates, and rental prices
a. adjust rapidly to clear markets. c. give households complete information.
b. adjust slowly to clear markets. d. give households perfect information.
52. The price-misperceptions model differs from the equilibrium business cycle model in that households
a. no longer serve as providers of capital services. c. find that market-clearing prices move to equilbrium slowly.
b. sometimes misinterpret changes in nominal prices as changes in real prices. d. typically face disequilibrium because prices fail to clear markets.
53. Empirical evidence suggests that money is not always neutral, which is consistent with
a. an equilibrium business-cycle model. c. a price-misperceptions model.
b. a real business-cycle model. d. a wage-imperfections model.
54. In the price-misperceptions model, employers have
a. inaccurate information about wages and accurate information about the price of the output. c. accurate information about wages and the price of the output.
b. inaccurate information about wages and the price of the output. d. accurate information about wages and inaccurate information about the price of the output.
55. In the price-misperceptions model, workers have
a. inaccurate information about wages and accurate information about the price level. c. accurate information about wages and the price level.
b. accurate information about wages and inaccurate information about the price level. d. inaccurate information about wages and the price level.
56. In the price-misperceptions model, a rise in the real wage rate makes the demand curve for labor, in the short run, to
a. become steeper than in an equilibrium business-cycle model. c. depend about expectations about prices, not the actual price used in an equilibrium business-cycle model.
b. become less steep than in an equilibrium business-cycle model. d. remain the same as in an equilibrium business-cycle model.
57. In the price-misperceptions model, a rise in the nominal wage rate makes the supply curve of labor, in the short run,
a. shift to the right compared to an equilibrium business-cycle model. c. shift to the left compared to an equilibrium business-cycle model.
b. become less steep than in an equilibrium business-cycle model. d. remain the same as in an equilibrium business-cycle model.
58. In the price-misperceptions model, an increase in the price level in the short run,
a. lowers the quantity of labor supplied at a given real wage. c. leaves the quantity of labor supplied unchanged.
b. lowers the quantity of labor supplied at a given nominal wage. d. increases the quantity of labor supplied at a given real wage.
59. In the price-misperceptions model, an increase in the price level will, in the long run,
a. lower the quantity of labor supplied at a given real wage. c. leave the quantity of labor supplied unchanged.
b. lower the quantity of labor supplied at a given nominal wage. d. increase the quantity of labor supplied at a given real wage.
60. In the price-misperceptions model, an increase in the price level will, in the short run,
a. increase the equilibrium quantity of labor input and real GDP. c. leave the equilibrium quantity of labor input and real GDP unchanged.
b. lower the equilbirum quantity of labor input and increase real GDP. d. lower the equilibrium quantity of labor input and real GDP.
61. In the price-misperceptions model, an increase in the price level in the short-run
a. decreases the equilibrium quantity of labor input and capital services. c. leaves the equilibrium quantity of labor input and capital services unchanged.
b. increases the equilibrium quantity of labor input and capital services. d. increases the equilibrium quantity of labor input and decreases the equilibrium quantity of capital services.
62. In the price-misperceptions model, an increase in the price level in the long-run
a. decreases the equilibrium quantity of labor input and capital services. c. increases the equilibrium quantity of labor input and decreases the equilibrium quantity of capital services.
b. increases the equilibrium quantity of labor input and capital services. d. leaves the equilibrium quantity of labor input and capital services unchanged.
63. The Lucas hypothesis on monetary shocks says that the real effect of a given size monetary shock is
a. larger, the more stable the underlying monetary environment. c. larger, the less stable the underlying monetary environment.
b. smaller, the more stable the underlying monetary environment. d. independent of the stability of the underlying moentary environment.
64. Empirical evidence shows that, for countries such as the U.S., a monetary shock has
a. little or no relation to real GDP. c. little or no relation to nominal GDP.
b. a significant positive relation to real GDP. d. a signficant negative relation to real GDP.
65. In the price-misperception model, money is
a. endogenous, just as it is in the equilibrium business-cycle model. c. exogenous, but it is endogenous in the equilibrium business-cycle model.
b. exogenous, just as it is in the equilibrium business-cycle model. d. endogenous, but it is exogenous in the equilibrium business-cycle model.
66. Friedman and Schwartz’s Monetary History concludes that the procyclical pattern for money
a. does not exist in historical data for the U.S. from 1867 to 1960. c. cannot be explained entirely by endogenous money.
b. can only be explained during the times the U.S. used a commodity money. d. can be explained entirely by exogenous money.
67. One reason for preferring a rule for monetary policy is that a rule
a. allows for additional discretionary policy. c. ensures that the economy would have a negative rate of inflation.
b. ensures that the economy would have a positive rate of inflation. d. improves the credibility of the monetary authority.
68. Which of the following is likely to promote low and stable inflation?
a. inflation targeting c. a large benefit from temporarily reneging on a stated policy
b. discretionary monetary policy d. none of the above
SHORT ANSWER
1. On what types of prices do households have the best information and on what types of products may they have incomplete information?
2. What are the short run effects of a real wage misperception in the market clearing model?
3. Why even with the possibility of real wage misperceptions is the market clearing model still neutral in the long run?
4. Under what conditions do monetary policy changes have the larger real effects on an economy?
5. What is the difference between discretionary monetary policy and monetary policy under a policy rule?
6. Why might a monetary-policy rule be more likely than discretionary policy to promote low inflation?
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BUS 325 Week 9 Quiz – Strayer New
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Quiz 8 Chapter 8
International Compensation
TRUE/FALSE
1. Increased complexities in global pay include the decreased use of outsourced activities and subsequent labor pricing needs.
2. The competing objectives of the international firm and the expatriate employee are fundamentally different from that which exists in a domestic environment.
3. The term “base salary” acquires a somewhat different meaning when employees go abroad.
4. Base salary must be paid in local country currency.
5. Foreign service inducements are usually made in the form of a percentage of salary and usually amount to 30 to 60 percent of base pay.
6. The provision of a relocation allowance implies that employees should be entitled to maintain their home country living standards.
7. Many employers cover the expense of one or more trips back to the home country each year.
8. The provision of a cost-of-living allowance implies that the cost-of-living in the foreign assignment is higher than at home.
9. PCNs and TCNs do not usually receive the same treatment concerning educational expenses.
10. Pension plans are very easy to deal with from country-to-country, as national practices are similar
11. The Going Rate Approach is based on local market rates.
12. With the Going Rate Approach, if the location is in a low-pay country, the multinational usually supplements base pay with additional benefits and payments.
13. The Balance Sheet Approach links the base salary for PCNs and TCN to the salary structure of the relevant home country.
14. Generally the developed countries tend to rank as more expensive than developing countries because their wage costs are higher.
15. It is a common practice for MNEs to use a home-country balance sheet approach for TCNs except in the USA.
16. “Universal” pay systems may be preferred by corporate pay planners rather than having to deal with myriad “Local” systems.
17. Firms will never provide standardized “core” pay in the global firm.
18. Paying TCNs according to their home-country base salary can be less expensive than paying all expatriates on a PCN scale.
19. MNEs using the Balance Sheet approach to international compensation are constantly updating compensation packages for cost of living changes.
20. Obtaining up to date information on international living costs is a constant issue for multinationals.
MULTIPLE CHOICE
1. Successfully managing compensation and benefits in a multinational context:
a.
Requires knowledge of employment and taxation law, customs, environment, and employment practices of many foreign countries
b.
Requires the use of both the going rate approach and the balance sheet approach to international compensation
c.
Does not require familiarity with currency fluctuations
d.
Does not require the use of any kind of base salary
2. In a domestic context, base salary:
a.
Is the primary component of a package of allowances
b.
Includes cost-of-living allowance
c.
Denotes the amount of cash compensation serving as a benchmark for other compensation elements
d.
Is determined by using the Going Rate Approach
3. Which of the following is the foundation block for international compensation whether the employee is a PCN or TCN?
a.
Tax protection
b.
Foreign service inducement/hardship premium
c.
Allowances
d.
Base salary
4. Which of the following involves a payment to compensate for differences in expenditures between the home country and the foreign country?
a.
Home leave allowance
c.
Cost-of-living allowance
b.
Housing allowance
d.
Relocation allowance
5. The provision of a housing allowance:
a.
Is not often assessed on a case-by-case basis
b.
Does not ever include a fixed housing allowance
c.
Implies higher living standards
d.
May include company-provided housing
6. The purpose of home leave allowances is to:
a.
Compensate for differences in expenditures between the home country and the foreign country
b.
Give expatriates the opportunity to renew family and business ties, thereby helping them to avoid adjustment problems when they are repatriated
c.
Cover moving, shipping and storage charges, and temporary living expenses
d.
Give employees a chance to leave their homes to tour their potential foreign assignment
7. Relocation allowances:
a.
Do not usually cover temporary living expenses
b.
Usually cover temporary living expenses
c.
Cover discretionary items
d.
Do not usually cover moving
8. MNEs generally pay allowances in order to:
a.
Change the living standards of employees
b.
Encourage employees to take international assignments
c.
Avoid certain taxes
d.
Discourage employees from taking international assignments
9. Most US PCNs typically:
a.
Remain under their home country benefit plan
b.
Adopt US benefit plans
c.
Take advantage of both their home countries’ and the US’s benefit plans
d.
Do not receive benefits, only allowances
10. Firms need to address many issues when considering benefits, including:
a.
Whether or not to maintain expatriates in home-country programs
b.
Whether or not to use the Going Rate Approach
c.
Whether or not to use the Balance Sheet Approach
d.
Whether or not expatriates should receive any social security benefits
11. Benefits that may be provided to employees include:
a.
Base pay
c.
Vacations and special leave
b.
Tax protection
d.
Cost-of-living allowances
12. The base salary for an international transfer is linked to the salary structure in the host country using:
a.
Tax protection
c.
The Going Rate Approach
b.
Tax equalization
d.
The Balance Sheet Approach
13. The Balance Sheet Approach:
a.
Is the most widely used approach to international compensation
b.
Relies on survey comparisons
c.
Creates potential re-entry problems
d.
Creates variation between expatriates of the same nationality in different countries
14. An advantage of the Going Rate Approach is that:
a.
There is variation between assignments for the same employee
b.
There is equality in pay with local nationals
c.
There is equity between assignments
d.
It results in fewer taxes
15. A disadvantage of the Balance Sheet Approach is that:
a.
There can be variations between assignments for the same employee
b.
There can be variations between expatriates of the same nationality in different countries
c.
There may be potential re-entry problems
d.
It can result in great disparities between expatriates of different nationalities and between expatriates and local nationals
16. The four categories of outlay incurred by expatriates that are incorporated in the Balance Sheet Approach are:
a.
Goods and services, housing, income tax and reserve
b.
Housing, base pay, goods and services and taxation
c.
Taxation, housing, exchange rate and goods and services
d.
Reserve, housing, taxation and evaluation cost
17. The most common taxation policy used by multinationals is:
a.
Tax protection
c.
Tax equalization
b.
Parent country national taxation
d.
No taxation
18. “Globals” are:
a.
Expatriates
c.
Commuters
b.
Permanent international assignees
d.
International travelers
19. Many multinationals respond to complexity of tax issues across countries by:
a.
Ignoring all tax issues except for the Parent company
b.
Retaining the services of international accounting firms
c.
Having an in-house tax division to prepare all tax related forms and addresses all country tax issues
d.
Leaving all tax issues up to the employee
20. A firm-external theory of job worth is influenced by:
a.
Behavioral theory
c.
Cultural and institutional perspectives
b.
Level of internationalization
d.
Local market conditions
21. Pay strategy may be defined in terms of a series of interlocking strategic choices on:
a.
Basis of pay, units of aggregations, patterns of variation in pay and job evaluations
b.
Industry/competition, size of organization, organizational structure and job evaluations
c.
Employment relationships, corporate culture, basis of pay and job evaluation
d.
Local market conditions, laws, basis of pay and job evaluations
22. An external, environmental norm in global pay strategy would be:
a.
Traditional employment relationships
c.
Resource-based view of the firm
b.
Labor unions and educational systems
d.
Institutional economics
23. Performance verses seniority is a strategic choice of pay strategy considered in:
a.
Job evaluation system
c.
Internal equity
b.
Units of aggregation
d.
Basis of pay
24. In a recent cost of living survey, the most expensive city to live in is:
a.
London
c.
Zurich
b.
New York
d.
Tokyo
25. The Top Five highest taxation countries are:
a.
Netherlands, Belgium, Germany, Australia and Italy
b.
USA, Netherlands, France, Germany and China
c.
China, Australia, Belgium, France and Malaysia
d.
Taiwan, France, Netherland, Belgium and Australia
26. International compensation is characterized by:
a.
Complexity, culture and corporation
c.
Complexity, challenges and choices
b.
Complexity, cultural challenges
d.
Complexity, cooperation and competition
27. Global pay practices consist of firm level decisions about:
a.
Pay mix, pay level and standardization versus localization
b.
Pay levels, pay mix and hierarchy versus egalitarian basis
c.
Pay levels, cultural norms and pay bases
d.
Pay mix, pay culture and standardization versus localization
28. International compensation is:
a.
On a practical level, simpler than a domestic pay system
b.
Not considered critical for most multinational enterprises
c.
Still essentially equivalent to the topic of expatriate pay practices in all multinational enterprises
d.
More complex than domestic pay due to outsourcing and balancing centralizations and decentralization of pay forms
29. National and regional differences in the meaning practice and tradition of pay:
a.
Are rapidly diminishing
b.
Have practically disappeared with global cultural integration
c.
Remain significant sources of variation in the international firm
d.
Are actually increasing due to national and regional protectionist legislative mandates
30. A seamless network of pay providing members, made up of global firms, their specialist consultant and local and regional public and private interests are:
a.
A reality
b.
An impossibility
c.
Not considered critical to MNEs executives
d.
A goal not yet a reality
31. The “Local Plus” approach to international compensation
a.
Pays expatriates solely based on prevailing local wage conditions
b.
Provides nothing but benefits in transportation assistance, housing and dependent’s education
c.
Combines some local pay practices with some expatriate benefits
d.
Always includes tax equalization policies
SHORT ANSWER
1. Present the general objectives of international compensation for a firm.
2. List the objectives of international compensation for an employee.
3. Discuss the key components of an international compensation program.
4. Describe the advantages and disadvantages of the Going Rate Approach to international compensation and the Balance Sheet Approach.
5. What are the three vertical levels of global pay strategies?
6. Describe some categories of Basis-for-Pay of strategic pay systems.
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BUS 335 Week 9 Quiz– Strayer New
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Quiz 8 Chapter 11 and 12
Student: ___________________________________________________________________________
1. Practical significance is the sign of a correlation coefficient.
True False
2. Validity refers to the relationship between predictor and criterion scores.
True False
3. A useful predictor is one where the sign of the relationship is consistent with the logic or theory behind the predictor.
True False
4. Statistical significance is stated as a probability and indicates a given predictor's chances of yielding similar validity coefficients with different sets of applicants.
True False
5. A significance level of p<0.05 means that there are fewer than 5 chances in 100 of concluding there is a relationship in the population of job applicants, when in fact, there is not.
True False
6. In general, the greater the correlation of a given predictor with other predictors of a criterion, the more useful the predictor will be.
True False
7. The usefulness of a predictor is determined by the value it adds to the prediction of job success above and beyond the forecasting powers of other available predictors.
True False
8. There are no cases in which a predictor has high validity and high adverse impact.
True False
9. All other things being equal, if a selection specialist must decide between two predictors, the one that causes the least adverse impact would be the best choice.
True False
10. Utility refers to the expected gains to be derived from using a predictor.
True False
11. The selection ratio is the number of people hired divided by the number of applicants, and it is desirable that this ratio be high.
True False
12. It is desirable that the denominator of a selection ratio be small.
True False
13. The base rate is the number of hirees divided by the number of employees.
True False
14. When deciding whether or not to use a new predictor, the validity coefficient, the base rate, and the selection ratio should be considered in combination, not independently.
True False
15. The most fundamental concern regarding utility analysis is that it lacks realism.
True False
16. If you are using the "economic gains formula," and you have just increased the validity of your selection procedures with no change in cost, your economic gain value should increase.
True False
17. The most difficult factor in the economic gain formula to estimate is "cost per applicant".
True False
18. Utility analysis models do not take factors like EEO/AA concerns into account.
True False
19. Research suggests that managers prefer the results of utility analysis to the presentation of simple validity coefficients.
True False
20. Utility decreases as the number of valid predictors used in the selection process increases.
True False
21. If you are evaluating the usefulness of a given predictor in predicting job success, and you are interested in the value the predictor adds to the prediction of job success, you want to know the predictor's ________.
A. validity coefficient
B. practical significance
C. sign
D. statistical significance
22. When HR specialists state that a new predictor "adds value" to the prediction of job success, they mean that _____.
A. the predictor provides economic benefit to prediction
B. the predictor has a high validity coefficient
C. the predictor adds to the prediction of job success over and beyond the forecasting powers of current predictors
D. the predictor is highly correlated with other predictors, thus increasing efficiency
23. A significance level of p<0.05 in a validity study means _________.
A. that there are fewer than 5 chances in 100 of concluding there is a relationship in the population of job applicants, when in fact, there is not
B. that there are 5 chances in 100 of concluding that there is not a relationship in the population of job applicants, when in fact, there is
C. that the practical significance of the observed relationship is very low
D. that there are fewer than 5 chances in 100 that a predictor has adverse impact
24. Validity refers to __________.
A. the number of individuals hired by a predictor
B. the number of individuals hired divided by the number of applicants
C. the relationship between predictor and criterion scores
D. the inverse of the adverse impact ratio
25. If an HR specialist is assessing the usefulness of predictors in forecasting job success, and it is noted that a given predictor has both high validity and high adverse impact, the HR specialist should conclude ___________.
A. this can never happen and the method of calculating validity must be incorrect
B. this is a common circumstance and the predictor should be used
C. if the predictor is highly correlated with other predictors, this will compensate for adverse impact
D. legal problems could result and alternative predictors should be sought
26. Under which circumstances is "hiring success gain" likely to be optimal?
A. Low selection ratio, low base rate, high validity
B. High selection ratio, high base rate, high validity
C. High selection ratio, low base rate, high validity
D. High selection ratio, low base rate, low validity
27. Which of the following is the most difficult to estimate term in the economic gain formula?
A. Average tenure of employees.
B. Number of applicants.
C. Dollar value of job performance.
D. Cost per applicant.
28. Taylor-Russell tables are an effective decision making tool in that they ________.
A. allow for calculating selection ratios
B. enable HR specialists to calculate utility ratios
C. allow simultaneous consideration of a predictor's base rate, selection ratio, and validity
D. help to increase validity coefficients to more acceptable levels
29. Economic gain formulas provide the HR specialist with an estimate of ______.
A. the economic gain derived from using a predictor versus random selection
B. the economic gain from using random selection
C. the economic gain of the standard deviation of job performance
D. the economic gain of the validity coefficient
30. A compensatory approach to selection decisions means that applicants must earn a passing score on each predictor before advancing in the selection process.
True False
31. The clinical prediction method of determining an applicant's score on a job assessment instrument relies on adding the individual predictor scores together to arrive at the applicant's total score.
True False
32. The "unit weighting" method of determining the score of a job applicant on an assessment instrument considers the relative importance of each predictor.
True False
33. Multiple regression will be more precise than unit weighting if there is a small number of predictors, low correlations between predictors, and a large sample.
True False
34. The multiple hurdles method of setting a passing score for a job predictor would be a cost efficient method for making decisions about hiring.
True False
35. The _________ approach means that selection decisions means that scores on one predictor can make up for low scores on another.
A. multiple hurdles
B. Markov process
C. compensatory model
D. none of the above
36. The _________ method of determining an applicant's score is based on the expert judgment of the manager.
A. multiple regression
B. clinical prediction
C. unit weighting
D. none of the above
37. The _________ method of determining an applicant's score is based on assigning weights by statistical procedures and then adding predictor scores together.
A. multiple regression
B. clinical prediction
C. unit weighting
D. none of the above
38. The _________ approach means that an applicant must earn a passing score on each predictor before advancing in the selection process.
A. multiple hurdles
B. Markov process
C. compensatory model
D. none of the above
39. In establishing procedures for setting cutoff scores, organizations should stress the job-relatedness of the assessment procedure and de-emphasize validity.
True False
40. In assessing cutoff scores, a "false negative" is an applicant who is assessed as not likely to succeed, but who would have been successful if hired.
True False
41. In assessing cutoff scores, a "false positive" is an applicant who is assessed as not likely to succeed, but who would have been successful if hired.
True False
42. The minimum competency method involves setting the cut score on the basis of the minimum qualifications deemed necessary to perform a job.
True False
43. In top down hiring, all individuals who are above a minimum competency point are hired.
True False
44. There is little evidence that individuals who perceive themselves to be overqualified are less satisfied or have higher intentions to turnover.
True False
45. The law prohibits using different norms for test scores of minority and majority groups.
True False
46. Banding is a procedure whereby applicants who score in different score ranges or bands are considered to have scored equivalently.
True False
47. Applicants react positively when banding is associated with affirmative action.
True False
48. An applicant who is hired but does not perform successfully is a ______________.
A. true positive
B. false positive
C. true negative
D. false negative
49. An applicant who is not hired but who would have performed successfully if hired is a ______________.
A. true positive
B. false positive
C. true negative
D. false negative
50. If a cutoff score is lowered, the effect of this on hiring results is likely to be ______________.
A. fewer false negatives only
B. both fewer false negatives and more true positives
C. fewer false negatives and fewer false positives
D. more false negatives and more false positives
51. If a cutoff scores is set based on the qualifications deemed necessary to perform a job, it is most likely the ______ method of determining cut scores.
A. top-down
B. criterion-related
C. minimum competency
D. banding
52. When applicants who score within a certain score range are considered to have scored equivalently ________.
A. top-down
B. criterion-related
C. minimum competency
D. banding
53. Which of the following statements is a useful guideline for setting cutoff scores?
A. Cutoff scores should be consistent with normal expectations of acceptable proficiency within the workforce.
B. The job relatedness of assessment procedures should not be correlated with validity.
C. A single "best" method of setting cutoff scores should be identified.
D. Cutoff scores should be set to maximize true positives.
54. When random selection is used to select the finalist to whom a job offer will be made, discretionary assessment methods should be used.
True False
55. In ranking finalists are ordered from the most desirable to the least desirable based on the results of discretionary assessments.
True False
56. One disadvantage of ranking is that it doesn't provide a clear suggestion of the order in which candidates should be offered jobs.
True False
57. Ongoing hiring is most common in organizations with very high turnover rates.
True False
58. When using ___________, each finalist has an equal chance of being selected.
A. ranking
B. random selection
C. clinical prediction
D. grouping
59. When using ___________, finalists are ordered from the most desirable to the least desirable based on results of discretionary assessments.
A. ranking
B. random selection
C. clinical prediction
D. grouping
60. When using ___________, finalists are banded together into rank-ordered categories.
A. ranking
B. random selection
C. clinical prediction
D. grouping
61. In general, HR specialists should orchestrate the development of staffing policies and procedures for all departments, but play a secondary, or supporting role in the ultimate decision to hire in areas outside of the HR department.
True False
62. Since line managers are not usually technical experts in staffing processes, their input comes to play only in regard to hiring decisions.
True False
63. In terms of who should participate in selection decision making (i.e., HR professionals vs. line managers), HR professionals would be least likely to ________.
A. make the hiring decision
B. establish selection procedures
C. ensure relevant laws and regulations are being followed
D. represent the interests of employees to management
64. In which of the following assessment procedures is the participation of line managers most needed?
A. initial assessment
B. substantive methods
C. discretionary methods
D. background investigations
65. Employees are most likely to be involved in hiring decision making if they are organized in __________.
A. solo work
B. functional harmony
C. teams
D. none of the above
66. If adverse impact occurs because of certain selection procedures, these procedures may be justified under UGESP through validity studies.
True False
67. The two options the UGESP recommends for minimizing adverse impact are use of within-group norming and banding.
True False
68. The law suggests that unless the organization is under a formal AAP, protected characteristics should not be considered in selection decision making.
True False
69. If an organization wishes to comply with the law and still increase the diversity of its workforce, it should ___________.
A. de-emphasize selection based on KSAOs
B. use recruitment as a tool for attracting a more diverse and qualified applicant pool
C. use clinical and other subjective prediction methods
D. all of the above
70. Uniform Guidelines on Employee Selection Procedures establish guidelines for record-keeping ___________.
A. of applicants' sex
B. of applicants' race
C. for major job categories
D. all of the above
Chapter 12
Student: ___________________________________________________________________________
1. The three elements required for a contract to be legally binding are: offer, acceptance, and written documentation.
True False
2. It is very important for an organization to know, in advance, whether an individual will be classified as either an employee or an independent contractor.
True False
3. A third party is someone other than the employer or the offer receiver who speaks on their behalf in the establishment or modification of employment contracts.
True False
4. The law is relatively indifferent between the use of written contracts and the use of oral contracts.
True False
5. Statements in employee handbooks can be construed as employment contracts.
True False
6. The "one year rule" ensures that oral agreements for time intervals greater than one year are legally enforceable.
True False
7. If a letter of acceptance says an employee needs to work on weekends, but the employer makes an oral promise that the employee will not have to work on weekends, the oral statement could be legally binding.
True False
8. If a co-worker promises a prospective employee overtime hours while visiting the prospective employee in his/her home, this promised "term" of the employment would likely be legally enforceable.
True False
9. A disclaimer on an employment application blank stating that the employee can be terminated "with or without cause" and "with or without notice" is legally enforceable.
True False
10. It is extremely important for organizations to be sure to keep promises that they make to job applicants in order to avoid subsequent lawsuits.
True False
11. In order for "promissory estoppel" claim to apply when a job offer is made, the offer recipient must suffer a detrimental effect.
True False
12. Which of the following elements are required for a contract to be legally binding and enforceable?
A. offer
B. acceptance
C. consideration
D. all of the above
13. Consideration in a contract entails __________.
A. evidence that both parties agree to the terms as offered
B. a polite exchange of information
C. the exchange of something of value between the parties to the contract
D. none of the above
14. Which of the following statements about written contracts is false?
A. The law favors written contracts over oral contracts.
B. A statement on a job application blank could be construed as a written contract.
C. Written statements in employee handbooks that are unintended as contracts cannot be construed as contracts.
D. Internal job posting notices can be construed as written job contracts.
15. Which of the following circumstances makes it less likely an oral statement about weekend work would be legally enforceable as a contract term?
A. The statement was made in the workplace.
B. The statement is not supported by a written policy.
C. The statement was made by an organizational manager.
D. The statement was a specific one.
16. Which of the following statements about disclaimers is false?
A. They can appear in almost any written documents made available to job applicants or employees.
B. They can be used to limit employee rights.
C. They are never oral.
D. Their receipt by employees should be acknowledged in some formal way.
17. In order to improve the chances of winning a law suit based on "promissory estoppel," the most important point the plaintiff must demonstrate is that ____.
A. the promise was accurate
B. the promise was made in good faith
C. the defendant reneged on the promise
D. the promise was withdrawn, resulting in a detrimental effect
18. Upon acceptance, a formal job offer in which consideration is provided to employees becomes a contract.
True False
19. Terms and conditions of employment offered by employers unintentionally are not legally enforceable.
True False
20. With a tight labor market, the organization will be in a position to provide lower cost offers.
True False
21. The strategic approach to job offers involves considering the total package of extrinsic and intrinsic rewards that the offered job will provide to the finalist.
True False
22. An organization should provide a definite starting date for an offer, or else the acceptance and consideration of the offer occur whenever the new hire actually begins to work.
True False
23. Most organizations provide some form of specific "just cause" guarantee regarding terminations during their job offers.
True False
24. One reason organizations often opt out of flat pay rates in favor of differential pay rates, is because job applicants are similar in KSAO quality.
True False
25. The use of short-term incentive pay, like commissions or production bonuses, is common among private sector organizations.
True False
26. Hiring bonuses tend to enhance employee performance motivation.
True False
27. The least common form of long-term variable pay in the private sector is the cost of living adjustment.
True False
28. Hiring bonuses can be problematic because recipients of these bonuses might take the bonus and then quit soon after.
True False
29. A hot skill premium is a permanent pay premium added to the regular base pay to account for market escalation in pay for certain skills in extreme shortage.
True False
30. Non-compete agreements that would keep employees from indefinitely practicing their trade or profession are not enforceable.
True False
31. A non-compete agreement restricts a departing employee from competing against the organization.
True False
32. Golden handcuff agreements legally bar employees from quitting a job for a specific period of time.
True False
33. Written job offers should normally contain terms of acceptance that require acceptance without revision.
True False
34. Which of the following is likely to be a contingency related to a job offer?
A. satisfactory reference checks
B. job salary
C. job benefits
D. job vacation privileges
35. Which of the following is not a choice involved in a strategic approach to job offers?
A. determining a compelling offer the finalists will find difficult to turn down
B. deciding which short and long term pressures to respond to in an offer
C. deciding on specific pay levels that will apply to all individuals
D. determine whether there will be a "standard offer" for all finalists or whether "enhanced offers" will be possible for some finalists
36. A _____ contract provides certainty to both the new hire and the organization regarding the length of the employment relationship.
A. variable premium
B. fixed annuity
C. fixed-term
D. latent variable
37. Flat pay rate job offers are least appropriate for _______.
A. situations where applicants have very dissimilar KSAOs
B. jobs with a plentiful supply of applicants
C. situations where management desires to avoid inequities in starting pay among new employees
D. jobs where applicants have KSAOs of similar quality
38. Terms and conditions that the organization states the employee is entitled to upon departure from the organization constitute _________.
A. pay rates
B. health benefits
C. severance packages
D. life insurance
39. Long-term variable pay plans provide employees ownership opportunities as the value of the organization increases are applicable only in the ____.
A. public sector
B. private sector
C. technology sector
D. none of the above
40. Which of the following is true regarding long-term variable pay?
A. Stock options qualify for special tax treatment for employees.
B. Small public organizations are more likely to provide stock options than large public organizations.
C. Stock options guarantee a fixed rate of return on investment.
D. None of the above
41. Studies of job seekers graduating from hotel administration and engineering programs showed that job offers involving _____ are seen more favorably.
A. pay contingent on performance
B. pay raises based on group performance
C. a flexible benefits package
D. pay pegged to skills
42. A _____ is a right to purchase a share of stock for a predetermined price at a later date.
A. stock option
B. profit share
C. realized dividend
D. mutual fund
43. A temporary pay premium added to the regular base pay of an employee to account for a temporary market escalation in pay for certain skills in extreme shortage is called a(n) ____________.
A. hot skill premium
B. tight labor market adjustment
C. key skill premium
D. none of the above
44. ______ prohibit current or departing employees from the unauthorized use or disclosure of information during or after employment.
A. Non-compete agreements
B. Retainers
C. Confidentiality clauses
D. Mixed-motive contracts
45. Non-compete agreements should be drafted in such a way that they cover ____.
A. high-value employees
B. experienced employees
C. all employees
D. only managerial, technical, and scientific staff
46. Organizations can gauge the likely reactions of job applicants to job offers not only by conducting formal research, but also by gathering information about various preferences from the offer recipient during the actual recruitment/selection process.
True False
47. Access to typical salary information for various occupations or job titles is very hard to come by, especially for job seekers.
True False
48. Applicant dishonesty is a common problem as relates to the reporting of the applicant's current salary.
True False
49. A currently employed offer receiver normally incurs costs for leaving and will expect a "make whole" offer amounting to 20-30% of the offer receiver's current base pay.
True False
50. The lowball strategy will be especially effective for desperate or unknowledgeable employees.
True False
51. An advantage of the "competitive strategy" for negotiating initial job offers is that this strategy repeatedly yields acceptances from the highest quality (KSAOs) applicants.
True False
52. When job offer negotiating strategies are to be used as part of an aggressive EEO/AA recruitment program, the strategy most appropriate to be used in such a situation is the "competitive strategy."
True False
53. When rejecting job applicants, most organizations do so with a rejection message to the applicant that is short and vague in content.
True False
54. In using information about competitors to structure job offers, which of the following statements is not useful as a general guideline?
A. It makes a difference who the competitors are.
B. Competitive offers should always be matched to ensure acceptance.
C. Analysis of competitive advertisements should be performed in order to have the "market information" needed to prepare effective job offers.
D. Trade associations should be consulted for competitive information whenever possible.
55. The most sensible approach for addressing the issue of applicant truthfulness would be to ________.
A. receive applicant information in good faith since the majority of applicants will be honest and it is not fair to inconvenience everyone with more verification because of a few "bad apples"
B. treat applicants with trust and they will respond with honesty in most cases
C. have applicants provide independent, third-party documentation of all job information provided on application blanks
D. verify the applicant information provided that is deemed most vital
56. The most commonly negotiated element of a job offer is ___.
A. severance packages
B. educational assistance
C. salary
D. paid time off
57. As a general rule concerning job offers, it can be said that __________.
A. "low ball" job offers are expensive to the organization
B. "competitive" job offers have no important drawbacks
C. "competitive" job offers tend to leave room to negotiate
D. "competitive" offers usually stimulate the most positive reactions on the part of offer recipients
58. The sales approach to presenting a job offer has been adopted by many organizations because ________.
A. mechanical presentations of job offers have been proven not to work
B. they apply to all situations
C. they cost less than mechanical presentations
D. they may increase the likelihood of bringing job offers to closure
59. Most rejection messages sent to applicants are _________.
A. specific in terms of the reason for the rejection
B. not conveyed by formal means
C. vague in content
D. designed carefully to "soften the blow" of the rejection
60. Which of the following statements about reneging on job offers is false?
A. reneging is often caused by sudden changes in circumstances, such as a change in health status
B. there are substantial legal concerns about reneging
C. most employers feel the level of reneging has increased dramatically in recent years
D. solid evidence on reneging and why it occurs is lacking
61. Orientation is likely to be more effective when newcomers have realistic information about job requirements and rewards before the job begins.
True False
62. Orientation should focus on the person/job match exclusively.
True False
63. Whereas orientation focuses on the initial and immediate aspects of newcomer adaptation, socialization emphasizes helping the newcomer fit into the job and organization over time.
True False
64. One way to improve employee socialization outcomes is to provide realistic requirement information regarding job requirements and rewards.
True False
65. Clarifying job requirements and knowledge of skills are the only demonstrated methods for consistently improving employee socialization.
True False
66. Research suggests that socialization programs are equally effective when conducted online relative to person-to-person.
True False
67. Effective orientation training should include __________.
A. sources of influence in the organization
B. integrating the newcomer into the work unit and team
C. conducting active mentoring for the newcomer
D. all of the above
68. What is the relationship between orientation and socialization activities?
A. Orientation covers job content, socialization covers social content.
B. Orientation is usually a small group activity, socialization is one on one.
C. Orientation is typically an immediate activity for new hires, which overlaps with more long-term socialization.
D. Orientation is formal, socialization is informal.
69. The goal(s) of the socialization process is(are) ___________.
A. to achieve an effective person/job match
B. to achieve an effective person/organization match
C. to help the newcomer fit into the job in the long-term
D. all of the above are true
70. From the newcomer's perspective, likely components for inclusion in the socialization process include addressing _________.
A. performance proficiency
B. organization goals and values
C. politics
D. all of the above are correct
71. Research has shown that ____ facilitates employee socialization to a new job.
A. clarifying job requirements and knowledge and skills to be acquired
B. minimizing biasing contact from current co-workers
C. providing a highly positive recruitment message regarding job requirements at rewards
D. all of the above
72. The delivery of newcomer socialization should be the responsibility of __________.
A. his/her supervisor
B. a mentor or sponsor
C. the HR department
D. all of the above
73. Although organizations are strongly encouraged to check the authorization to work of all employees, they cannot discriminate against applicants on the basis of country of origin.
True False
74. It is best to ask for proof of employment eligibility prior to making a job offer.
True False
75. Negligent hiring claims are made when an employer fails to provide adequate compensation and benefits to a new hire.
True False
76. Having applicants sign release statements so the employer can do background investigations is a legal means for minimizing the possibility of negligent hiring.
True False
77. In general, the employment relationship is an at-will one.
True False
78. Under the requirements of the Immigration Reform and Control Act, employers must ___________.
A. adjust pay scales for alien status
B. verify employability status for aliens only
C. verify employability status for all potential employees
D. verify employability status for applicants before an offer is extended
79. Which of the following statements about negligent hiring lawsuits against employers is accurate?
A. monetary damages are usually leveled against the employee found to be at fault
B. the plaintiff must present evidence the injury or harm was a foreseeable consequence of hiring the unfit employee
C. the employer has the initial burden to present evidence of proper hiring practice in such cases
D. suits of this kind are decreasing as companies in the private sector recognize the liabilities involved
80. To reduce the likelihood of negligent hiring lawsuits organizations should _____.
A. emphasize characteristics like licensure requirements, criminal records, and references
B. avoid gathering too much KSAO information because it can be used to demonstrate that an organization "should have known" an employee would be a problem
C. refuse to fire individuals with a history of mental illnesses
D. none of the above are useful to prevent negligent hiring suits
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ECO 410 Week 9 Quiz – Strayer
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Quiz 8 Chapter 15 and 16
Multinational Tax Management
15.1 Tax Principles
Multiple Choice
1) The issue of ethics in the reporting of income and the payment of taxes is a considerable one. The authors state that most MNEs operating in foreign countries tend to follow the general principle of:
A) "when in Rome, do as the Romans do."
B) full disclosure to the tax authorities.
C) maintain a competitive playing field by cheating as much as the local competition, no more, no less.
D) none of the above
2) Which of the following is an unlikely objective of U.S. government policy for the taxation of foreign MNEs?
A) to raise revenues
B) to provide an incentive for U.S. private investment in developing countries
C) to improve the U.S. balance of payments
D) All of the above are objectives.
3) A ________ tax policy is one that has no impact on private decision-making, while a ________ policy is designed to encourage specific behavior.
A) flat; tax incentive
B) neutral; flat
C) neutral; tax incentive
D) none of the above
4) Which of the following is NOT an example of a tax incentive policy?
A) The federal government gives a tax credit to MNEs that make domestic capital improvements but not foreign capital improvements.
B) Corporations are allowed to take a direct tax credit for each dollar of matching donations they make to institutions of higher education.
C) A tax law is passed that makes interest on property non tax-deductible, but interest payments on durable goods are.
D) All are examples of a tax incentive policy.
5) Toyota Motor Company operates in many different countries and pays taxes at many different rates. However, they always pay the same rate as their local competitors. Toyota Motor Company is operating in an environment of ________ tax policy.
A) domestic neutrality
B) foreign neutrality
C) territorial approach
D) none of the above
6) The United States taxes the domestic and remitted foreign earnings of U.S. based MNEs no matter where the earnings occurred. This is an example of a/an ________ approach to levying taxes.
A) worldwide
B) territorial
C) neutral
D) equitable
7) The United States taxes all earnings on U.S. soil by both domestic and foreign firms. This is an example of a ________ approach to levying taxes.
A) worldwide
B) neutral
C) territorial
D) none of the above
8) Bacon Signs Inc. is based in a country with a territorial approach to taxation but generates 100% of its income in a country with a worldwide approach to taxation. The tax rate in the country of incorporation is 25%, and the tax rate in the country where they earn their income is 50%. In theory, and barring any special provisions in the tax codes of either country, Bacon should pay taxes at a rate of:
A) 75%.
B) 62.5%.
C) 0%.
D) 50%.
9) The territorial approach to taxation policy is also termed the ________ approach.
A) source
B) ethical
C) greedy
D) location
10) A tax that is effectively a sales tax at each stage of production is defined as a/an ________ tax.
A) flat
B) equitable
C) value-added tax
D) none of the above
11) What is the total value of taxes paid in the following example if the value added tax is 10%? A farmer raises wheat that he sells for $1.50 to the grain company. The grain company sells to the processor for $2.00 per bushel. The processor turns the wheat into a breakfast cereal and wholesales it for $3.00 per bushel. The retailer sells the cereal for $4.00 per bushel.
A) $0.15
B) $0.20
C) $0.30
D) $0.40
TABLE 15.1
Use the information to answer following question(s).
BayArea Designs Inc., located in Northern California, has two international subsidiaries, one located in the Ukraine, the other in Korea. Consider the information below to answer the next several questions.
12) Refer to Table 15.1. If BayArea pays out 50% of its earnings from each subsidiary, what are the additional U.S. taxes due on the foreign sourced income from the Ukraine and Korea respectively.
A) Ukraine = $0; Korea = ($30,000)
B) Ukraine = $100,000; Korea = $0
C) Ukraine = $0; Korea = $66,250
D) none of the above
13) Refer to Table 15.1. The additional U.S. taxes due on the repatriation of income from the Ukraine to the United States, alone, assuming a 50% payout rate, is:
A) excess foreign tax credits of $110,000.
B) additional U.S. taxes due of $97,000.
C) additional U.S. taxes due of $36,500.
D) excess foreign tax credits of $18,500.
14) Refer to Table 15.1. How much in additional U.S. taxes would be due if BayArea averaged the tax credits and liabilities of the two foreign units, assuming a 50% payout rate from each?
A) $3,750
B) $13,750
C) $2,500
D) $0
15) Refer to Table 15.1. If BayArea set the payout rate from the Ukraine subsidiary at 25%, how should BayArea set the payout rate of the Korean subsidiary (approximately) to more efficiently manage its total foreign tax bill?
A) 28.5%
B) 24.5%
C) 42.6%
D) 82.3%
16) Refer to Table 15.1. What is the minimum effective tax rate that BayArea can achieve on its foreign-sourced income?
A) 26%
B) 35%
C) 40%
D) 0%
17) Tax-haven subsidiaries are typically established in a country that can meet the following requirements:
A) a low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm.
B) the facilities to support financial services, for example, good communications, professional qualified office workers, and reputable banking services.
C) a stable government that encourages the establishment of foreign-owned financial and service facilities within its borders.
D) all of the above
18) A tax that is a form of social redistribution of income is defined as a/an ________ tax.
A) un-American
B) transfer
C) flat
D) none of the above
19) A ________ is a direct reduction of taxes whereas a ________ reduces the taxable income before taxes.
A) foreign tax credit; domestic tax credit
B) tax deduction; tax credit
C) tax credit; tax deduction
D) none of the above
Instruction 15.1:
Use the information to answer the following question(s).
Green Valley Exporters USA has $100,000 of before tax foreign income. The host country has a corporate income tax rate of 25% and the U.S. has a corporate income tax rate of 35%.
20) Refer to Instruction 15.1. If the U.S. has no bilateral trade agreement with the host country, what is the total amount of income taxes Green Valley Exporters will pay?
A) $25,000
B) $35,000
C) $51,250
D) $60,000
21) Refer to Instruction 15.1. If the U.S. has a bilateral trade agreement with the host country that calls for the total tax paid to be equal to the maximum amount that could be paid in the highest taxing country, what is the total amount of income taxes Green Valley Exporters will pay to the host country, and how much will they pay in U.S income taxes on the foreign earned income?
A) $25,000; $10,000
B) $25,000; $26,250
C) $35,000; $0
D) none of the above
22) Refer to Instruction 15.1. If the U.S. treated the taxes paid on income earned in the host country as a tax-deductible expense, then Green Valley's total U.S. corporate tax on the foreign earnings would be:
A) $10,000.
B) $26,250.
C) $35,000.
D) $51,250.
23) Refer to Instruction 15.1. If the U.S. treated the taxes paid on income earned in the host country as a tax-credit, then Green Valley's total U.S. corporate tax on the foreign earnings would be:
A) $51,250.
B) $35,000.
C) $26,250.
D) $10,000.
24) Tax treaties typically result in ________ between the two countries in question.
A) lower property taxes for U.S. citizens overseas
B) elimination of differential tax rates
C) increased double taxation
D) reduced withholding tax rates
25) Transfer pricing is a strategy that may be used by MNEs to:
A) reduce consolidated corporate income taxes.
B) partially finance a subsidiary in another country.
C) transfer funds from a subsidiary to the parent corporation.
D) all of the above
26) ________ is the pricing of goods, services, and technology between related companies.
A) Among pricing
B) Retail pricing
C) Transfer pricing
D) Wholesale pricing
True/False
1) The primary objective of multinational tax planning is to minimize the firm's worldwide tax burden.
2) A country CANNOT have both a territorial and a worldwide approach as a national tax policy.
3) Tax treaties generally have the effect of increasing the withholding taxes between the countries that are negotiating the treaties.
4) A value-added tax has gained widespread usage in Western Europe, Canada, and parts of Latin America.
5) All indications are that the value-added tax will soon be the dominant form of taxation in the U.S.
6) Among the G7 nations, the U.S. has a below average corporate income tax rate that makes it attractive for other countries to invest in the U.S.
7) In the mid 1980s the U.S. led the way to higher corporate income tax rates worldwide. Today, most of the G7 nations have surpassed the U.S. and have higher corporate income tax rates than the U.S.
8) The ideal tax should not only raise revenue efficiently but also have as few negative effects on economic behavior as possible.
9) The worldwide approach, also referred to as the residential or national approach to tax policy, levies taxes on the income earned by firms that are incorporated in the host country, regardless of where the income was earned (domestically or abroad).
10) The territorial approach, also referred to as the source approach to tax policy, levies taxes on the income earned by firms that are incorporated in the host country, regardless of where the income was earned (domestically or abroad).
11) Of the OECD 30 countries, most employ a worldwide approach to tax policy, but a few, including the United States, use the worldwide approach.
12) FEW governments rely on income taxes, both personal and corporate, for their primary revenue source.
13) Between 2006 - 2012, global corporate tax rates have trended upward.
14) Tax credits are LESS valuable on a dollar-for-dollar basis than are deductible expenses.
15) Tax treaties typically result in reduced withholding tax rates between the two signatory countries.
16) Tax credits are less valuable on a dollar-for-dollar basis than are tax-deductible expenses.
17) The U.S. Internal Revenue Service can reallocate revenues and expenses between parent corporations and their subsidiaries to more clearly reflect a proper allocation of income. In such instances it is the responsibility of the corporation to prove that the IRS has been arbitrary in its decision-making, thus establishing a "guilty until proved innocent" tax approach.
18) Tax haven subsidiaries of MNEs are categorically referred to as international offshore financial centers.
Essay
1) Explain the worldwide and territorial approaches of national taxation. The authors state that the United States uses both approaches. How can this be? Give an example of each taxation approach.
2) What is a value-added tax? Where is this type of tax in wide usage? Why do you suppose this form of taxation has NOT been widely accepted in the United States?
Chapter 16 International Portfolio Theory and Diversification
16.1 International Diversification and Risk
Multiple Choice
1) Beta may be defined as:
A) the measure of systematic risk.
B) a risk measure of a portfolio.
C) the ratio of the variance of the portfolio to the variance of the market.
D) all of the above
2) ________ risk is measured with beta.
A) Systematic
B) Unsystematic
C) International
D) Domestic
3) A fully diversified domestic portfolio has a beta of:
A) 0.0
B) 1.0
C) -1.0
D) There is not enough information to answer this question.
4) Unsystematic risk:
A) is the remaining risk in a well-diversified portfolio.
B) is measured with beta.
C) can be diversified away.
D) all of the above
5) A well-diversified portfolio has about ________ of the risk of the typical individual stock.
A) 8%
B) 19%
C) 27%
D) 52%
6) An internationally diversified portfolio:
A) should result in a portfolio with a lower beta than a purely domestic portfolio.
B) has the same overall risk shape as a purely domestic portfolio.
C) is only about 12% as risky as the typical individual stock.
D) all of the above
7) In some respects, internationally diversified portfolios are the same in principle as a domestic portfolio because:
A) the investor is attempting to combine assets that are perfectly correlated.
B) investors are trying to reduce systematic risk.
C) investors are trying to reduce the total risk of the portfolio.
D) all of the above
8) In some respects, internationally diversified portfolios are different from a domestic portfolio because:
A) investors may also acquire foreign exchange risk.
B) international portfolio diversification increases expected return but does not decrease risk.
C) investors must leave the country to acquire foreign securities.
D) all of the above
Instruction 16.1:
Use the information to answer the following question(s).
In September 2009 a U.S. investor chooses to invest $500,000 in German equity securities at a then current spot rate of $1.30/euro. At the end of one year the spot rate is $1.35/euro.
9) Refer to Instruction 16.1. How many euros will the U.S. investor acquire with his initial $500,000 investment?
A) €650,000
B) €370,370
C) €500,000
D) €384,615
10) Refer to Instruction 16.1. At an average price of €60/share, how many shares of stock will the investor be able to purchase?
A) 8333 shares
B) 6410 shares
C) 6173 shares
D) 10,833 shares
11) Refer to Instruction 16.1. At the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return before converting the stock back into dollars?
A) 5.0%
B) -3.0%
C) -5.0%
D) 3.0%
12) Refer to Instruction 16.1. At the end of the year the investor sells his stock that now has an average price per share of €57. What is the investor's average rate of return after converting the stock back into dollars?
A) -1.35%
B) 5.0%
C) -5.0%
D) -7.24%
13) A U.S. investor makes an investment in Britain and earns 14% on the investment while the British pound appreciates against the U.S. dollar by 8%. What is the investor's total return?
A) 22.00%
B) 23.12%
C) 6.00%
D) 4.88%
14) Which of the following statements is NOT true?
A) International diversification benefits induce investors to demand foreign securities.
B) An international security adds value to a portfolio if it reduces risk without reducing return.
C) Investors will demand a security that adds value.
D) All of the above are true.
True/False
1) Portfolio diversification can eliminate 100% of risk.
2) Increasing the number of securities in a portfolio reduces the unsystematic risk but not the systematic risk.
3) International diversification benefits may induce investors to demand foreign securities.
4) If the addition of a foreign security to the portfolio of the investor aids in the reduction of risk for a given level of return, then the security adds value to the portfolio.
5) If the addition of a foreign security to the portfolio of the investor decreases the expected return for a given level of risk, then the security adds value to the portfolio.
16.2 Internationalizing the Domestic Portfolio
Multiple Choice
1) Portfolio theory assumes that investors are risk-averse. This means that investors:
A) cannot be induced to make risky investments.
B) prefer more risk to less for a given return.
C) will accept some risk, but not unnecessary risk.
D) All of the above are true.
2) The efficient frontier of the domestic portfolio opportunity set:
A) runs along the extreme left edge of the opportunity set.
B) represents optimal portfolios of securities that represent minimum risk for a given level of expected portfolio return.
C) contains the portfolio of risky securities that the logical investor would choose to hold.
D) all of the above
3) The addition of foreign securities to the domestic portfolio opportunity set shifts the efficient frontier:
A) down and to the left.
B) up and to the right.
C) up and to the left.
D) down and to the right.
4) Relative to the efficient frontier of risky portfolios, it is impossible to hold a portfolio that is located ________ the efficient frontier.
A) to the left of
B) to the right of
C) on
D) to the right or left of
5) The ________ connects the risk-free security with the optimal domestic portfolio.
A) security market line
B) capital asset pricing model
C) capital market line
D) none of the above
Instruction 16.2:
Use the information to answer the following question(s).
A U.S. investor is considering a portfolio consisting of 60% invested in the U.S. equity index fund and 40% invested in the British equity index fund. The expected returns for the funds are 10% for the U.S. and 8% for the British, standard deviations of 20% for the U.S. and 18% for the British, and a correlation coefficient of 0.15 between the U.S. and British equity funds.
6) Refer to Instruction 16.2. What is the expected return of the proposed portfolio?
A) 9.2%
B) 9.0%
C) 19.2%
D) 19%
7) Refer to Instruction 16.2. What is the standard deviation of the proposed portfolio?
A) 38.00
B) 19.20
C) 19.00
D) 14.45
True/False
1) The graph for the efficient frontier has beta on the vertical axis and standard deviation of the horizontal axis.
2) The portfolio with the least risk among all those possible in the domestic portfolio opportunity set is called the minimum risk domestic portfolio.
3) The optimal domestic portfolio of risky securities is always the portfolio of minimum risk.
4) The standard deviation of a portfolio is the sum of the weighted average standard deviations of the individual assets.
5) The optimal domestic portfolio combines the risk-free asset and a portfolio of domestic securities found on the efficient frontier.
6) The internationally diversified portfolio opportunity set shifts TO THE RIGHT of the purely domestic opportunity set.
Essay
1) Draw the curve representing the Optimal Domestic Efficient Frontier. Be sure to draw and label the following: The vertical axis and the horizontal axis, the risk-free security, the minimum risk portfolio, the domestic portfolio opportunity set, the optimal domestic portfolio, and the capital market line. Choose a point along the domestic portfolio opportunity set between the optimal domestic portfolio and the minimum risk domestic portfolio and explain why that point is not the optimal risky domestic portfolio for investors to hold.
16.3 National Markets and Asset Performance
Multiple Choice
1) The authors present a comparison of correlation coefficients between major global equity markets over a variety of different periods. The comparison yields a number of conclusions listed here EXCEPT:
A) the correlation between equity markets for the full twentieth century shows quite low levels of correlation between some of the largest markets (close to 0.50 in some cases).
B) that same century of data, however, yields a high correlation between the U.S. and Canada (0.80).
C) the correlation coefficients between those same equity markets for selected sub periods over the last quarter of the twentieth century, however, show significantly different correlation coefficients.
D) None of the answers listed are inaccurate conclusions.
True/False
1) Capital markets around the world are on average less integrated today than they were 20 years ago.
2) In an empirical study on national market returns in the 20th century, Dimson, Marsh, and Staunton (2002) determined that the equity returns in the United States out-performed the other 15 countries in the study.
3) In an empirical study on national market returns in the 20th century, Dimson, Marsh, and Staunton (2002) found that just under one-half of the 16 countries in the study had negative average returns in their equity markets.
4) In an empirical study on national market returns in the 20th century, Dimson, Marsh, and Staunton (2002) determined that due to high levels of correlation or returns between countries, there is almost NO BENEFIT to international portfolio diversification.
5) Of the major trading partners with the United States, Canada has among the LOWEST correlation of returns with the U.S.
Essay
1) If an investor is able to determine a global beta for his portfolio and holds a portfolio that is well-diversified with international investments, which performance measure is more appropriate, the Sharpe Measure or the Treynor Measure? Why? Explain each performance measure.
16.4 Market Performance Adjusted for Risk: The Sharpe and Treynor Performance Measures
Multiple Choice
1) The Sharpe measure uses ________ as the measure of risk and the Treynor measure uses ________ as the measure of risk.
A) standard deviation; variance
B) beta; variance
C) standard deviation; beta
D) beta; standard deviation
TABLE 16.1
Use the information to answer following question(s).
2) Refer to Table 16.1. What is the value of the Sharpe Measure for France?
A) 0.113
B) 0.0071
C) either A or B
D) neither A nor B
3) Refer to Table 16.1. What is the value of the Treynor Measure for the Netherlands?
A) 0.197
B) 0.0109
C) either A or B
D) neither A nor B
4) Refer to Table 16.1. ________ appears to have the greatest amount of risk as measured by monthly standard deviation, but ________ has the best return per unit of risk according to the Sharpe Measure.
A) United States; Austria
B) France; Austria
C) United States; Netherlands
D) France; Netherlands
5) The Sharpe and Treynor Measures tend to be consistent in their ranking of portfolios when the portfolios:
A) are poorly diversified.
B) are properly diversified.
C) contain only U.S. equity investments.
D) none of the above
True/False
1) The Sharpe and Treynor measures are each measures of return per unit of risk.
2) Good financial advice would suggest that investors should examine returns by the amount of return per unit of risk accepted, rather than in isolation.
3) The denominator of the Treynor measure is portfolio risk as measured by the standard deviation of the portfolio.
4) The denominator of the Sharpe measure is portfolio risk as measured by the standard deviation of the portfolio.
5) The denominator of the Sharpe measure is the portfolio's beta, the systematic risk of the portfolio, as measured against the world market portfolio.
6) The denominator of the Treynor measure is the portfolio's beta, the systematic risk of the portfolio, as measured against the world market portfolio.
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CIS 560 Week 9 Assignment 3 – Strayer New
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Assignment 3: Secure Encrypted Communications
Transmitting personal and business data and information over secure communication channels is critical. In some cases it is required, especially when personally identifiable information is being transmitted. Credit card numbers, Social Security Numbers, online purchases, business orders, and so on must all be transmitted over secure communication channels. The Public Key Infrastructure (PKI) provides the most widely used secure communications technology. PKI relies on encryption.
Write a four to five (4-5) page paper in which you:
Compare and contrast symmetric encryption to asymmetric encryption.
PKI uses digital certificates to encrypt / decrypt data. Analyze the process of encrypting and decrypting data using a digital certificate.
Evaluate the advantages and disadvantages of using digital certificates.
Evaluate the challenges related to public and private key management when using PKI.
Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
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BUS 519 Week 9 Assignment 4 – Strayer New
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Assignment 4: Project Progress
Due Week 9 and worth 200 points
Note: The assignments are a series of papers that are based on the same case, which is located in the Student Center of the course shell. The assignments are dependent upon one another.
During the project life cycle, project risk reviews and reports are required as previously identified in the risk management plan. Two months after the project started, the following events have taken place:
1. The top-two (2) threats have occurred.
2. The top opportunity has been realized.
3. The project’s risk budget is already exhausted.
4. The risk management schedule has been shortened by two (2) months.
Write a five to seven (5-7) page paper in which you:
Analyze the impact of those events on the project.
Determine if any mitigation activities are required and explain why.
Determine if budget / schedule changes are necessary and explain why.
Update the risk register and highlight the changes made. Provide the justification for the changes.
Use at least four (4) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
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BUS 309 Week 9 Quiz – Strayer New
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Quiz 8 Chapter 9
The Workplace (2): Today's Challenges
MULTIPLE CHOICE
1. Privacy
a.
is an absolute value.
b.
must be respected if we are to function as complete, self-governing agents.
c.
is something that employees today don't care about.
d.
is guaranteed by Article 3, section 3, of the Constitution.
2. The right to privacy of employees
a.
takes priority over other moral considerations.
b.
is clearly and unambiguously spelled out by the law.
c.
may conflict with an organization's legitimate interests.
d.
has to be given up in an era of global competition.
3. When it comes to obtaining information about employees, a key concept is
a.
informed consent.
c.
economic efficiency.
b.
paternalism.
d.
positive externalities.
4. Which of the following is true?
a.
a company is never permitted to test for legal drugs
b.
drugs can't harm employee performance
c.
business writers agree that drug testing is more cost effective than voluntary drug assistance programs
d.
media sensationalism and political posturing can get in the way of sensible answers to the drug problem
5. One key questionable premise underlying personality tests is
a.
they sometimes screen out potentially creative or individualistic employees.
b.
they presuppose that all employees can be validly placed in a small number of categories.
c.
they can help determine job applicants' areas of adequacy and inadequacy.
d.
that all individuals can usefully and validly be placed into a relatively small number of categories of personality types and character traits.
6. Polygraph tests
a.
are extraordinarily accurate contrary to what the critics say.
b.
can produce false positives.
c.
cannot reveal with certainty whether a person is or is not telling the truth.
d.
are totally reliable because lying always triggers an involuntary response that truth telling does not.
7. The Hawthorne effect shows that
a.
quality control circles are important.
b.
middle managers are affected by the satisfaction and dissatisfaction of the workers they supervise.
c.
attention and recognition can enhance worker productivity and motivation.
d.
trade-offs have to be made between productivity and quality of work life.
8. Businesses cite several reasons for using polygraphs to detect lying. Which of the following is one of those reasons?
a.
the polygraph is a fast and economical way to verify the information provided by a job applicant.
b.
polygraph tests cannot be beaten.
c.
the polygraph can reveal with certainty that a person is or is not telling the truth.
d.
the polygraph allows companies to increase the number of audits.
9. Used properly, personality tests serve two purposes in the work place. Which of the following is one of those purposes?
a.
Personality tests help screen applicants for jobs by indicating areas of adequacy and inadequacy.
b.
Personality tests help to determine whether an applicant is a drug user.
c.
Personality tests help determine how little the business has to pay an applicant if hired.
d.
Personality tests help determine if an applicant will be willing to work for low pay.
10. Which statement has the proper perspective about drug testing?
a.
Due process need not be followed by a business implementing a drug-testing program for its employees.
b.
The government has always opposed testing Federal employees for cocaine and other illicit drugs.
c.
Drug testing can only be defensible when it is really pertinent to employee performance and when there is a lot at stake.
d.
Informed consent need not be observed by a business implementing a drug testing program for its employees.
11. Douglas McGregor rejects Theory X, which holds that
a.
when explained properly, everyone will favor drug-testing programs.
b.
workers essentially dislike work and will do everything they can to avoid it.
c.
workers basically like work and view it as something natural and potentially enjoyable.
d.
sexual harassment is a form of discrimination.
12. An early 1970s government study ("Work in America") identified three chief sources of worker dissatisfaction. Which of the following is one of those sources?
a.
industry's preoccupation with quality, not quantity
b.
the rigidity of rules and regulations
c.
the relatively small size of most U.S. corporations
d.
mandatory drug testing programs used by many U.S. corporations
13. A fact about job satisfaction is
a.
longevity does not correlate with job satisfaction.
b.
the U.S. leads the world in the provision of childcare.
c.
a lack of job satisfaction can create mental health problems.
d.
worker participation and improved QWL always boost productivity.
14. Out of these four, which one is the only correct statement concerning OSHA?
a.
Critics call OSHA a "toothless tiger".
b.
OSHA regulates the shifts people work.
c.
OSHA says few accidents are caused by sleep deprivation and fatigue.
d.
OSHA states the key to worker safety is improved engineering.
15. The most accurate statement about workplace safety is:
a.
workers are often unaware of the hazards they face on the job
b.
employees, not their employers, are responsible for creating a safe workplace
c.
in an average year, 150 workers are killed on the job
d.
according to experts, industrial accidents "just happen"
16. “Corporate in-fighting,” “management power struggles,” “maneuvering and politics and power grabbing,” and “Machiavellian intrigues” are all phrases H. Ross Perot uses to describe
a.
the reality of family life today.
c.
the reality of the lunch room.
b.
the reality of corporate life today.
d.
the reality of the drive into work.
17. Forty-three thousand workers each year are
a.
killed on the job.
c.
injured on the job.
b.
laid off.
d.
fall asleep on the job.
18. The proper approach to promote safety is to change the “hidden culture” to
a.
pay employees more.
c.
hides injuries.
b.
be proactively oriented toward safety.
d.
refuse to talk openly about safety.
19. The most common reason that people leave their jobs is
a.
low wages.
b.
too much overtime.
c.
a poor relationship with their immediate supervisor.
d.
lousy benefits.
20. One of the three chief sources for dissatisfaction in the workplace is
a.
lack of opportunities to be promoted faster.
b.
lack of opportunities to have a company vehicle.
c.
lack of opportunities to have one’s own office.
d.
lack of opportunities to be one’s own boss.
21. When employees at all occupational levels are asked to rank what is important to them, the order that put them in is:
a.
good pay; enough authority to carry out the work; sufficient help, support, and information; and interesting work.
b.
interesting work; sufficient help, support, and information to accomplish the job; enough authority to carry out the work; and good pay
c.
sufficient help, support, and information to accomplish the job; interesting work; enough authority to carry out the work,and good pay
d.
enough authority to carry out the work; good pay; interesting work; and sufficient help, support, and information
to accomplish the job
22. Which of the following is a true statement about the information gained from polygraph tests?
a.
The information the organization seeks does not have to be related to the job.
b.
The organization has used the polygraph as the easiest way to gather the information it wants.
c.
Test results should be made public.
d.
Not only should the organization have job-related grounds for using the polygraph, but these must be compelling enough to justify violating the individual’s privacy and psychic freedom.
23. Many major employers routinely monitor the performance of their employees through the computers and telephones they use. Employers are allowed to
a.
check the number of keystrokes that word processors enter during the day.
b.
eavesdrop on e-mail.
c.
eavesdrop on fax transmissions.
d.
eavesdrop on cell phone conversations.
24. A study published in the Journal of the American Medical Association showed that postal workers who tested positive for drug use in a pre-employment urine test were at least 50 percent more likely to be
a.
promoted.
b.
transferred.
c.
honored for community service.
d.
fired, injured, disciplined, or absent than those who tested negative.
25. The United States has more of what per employee than any other industrial nation?
a.
timeclocks
c.
sprains and strains
b.
work injuries
d.
managers
TRUE/FALSE
1. As a general rule, the burden is on an organization to establish the legitimacy of infringing on what would normally be considered the personal sphere of the individual.
2. There is a general consensus among philosophers and lawyers about how to define the right to privacy.
3. Informed consent implies deliberation and free choice.
4. The Employee Polygraph Protection Act permits most private employers to use lie detectors in "pre-employment testing."
5. One problem that OSHA will have to address in the future is the increasing number of musculoskeletal disorders.
6. Increased productivity by changing the color of the surrounding working environment is known as the "Hawthorne effect."
7. Notification of employee monitoring constitutes consent on the part of the employee to be monitored.
8. Privacy is widely acknowledged today to be a fundamental right.
9. The general proposition that a firm has a legitimate interest only in employee behavior that significantly influences work performance applies equally to off-the-job conduct.
10. Businesses often claim polygraphs are a fast and economical way to verify the information provided by a job applicant.
11. If a polygraph test is 95 percent accurate, there are unlikely to be any "false positives."
12. When used properly, personality tests can help screen applicants for jobs by indicating areas of adequacy and inadequacy.
13. Any drug-testing program, assuming it is warranted, must be careful to respect the dignity and rights of the persons to be tested.
14. According to published statistics, each year in the United States nearly 100,000 workers are killed on the job.
15. Employees have a legal right to refuse to work when it exposes them to imminent danger.
16. Fatigue and sleep deprivation are no longer prime causes of industrial accidents.
17. An early 1970s government survey of worker dissatisfaction identified that worker dissatisfaction has been linked to the industry’s preoccupation with quantity, not quality and the rigidity of rules and regulations.
18. One study suggests a positive correlation between job satisfaction and longevity.
19. Granting workers new responsibilities and respect can benefit the entire organization.
20. In 1928, U.S. Supreme Court Judge Louis D. Brandeis described the right to privacy, or "the right to be left alone," as "the right most valued by men."
21. No set of assumptions about human nature is absolutely correct or incorrect, nor is there one perfectly right way to manage.
22. The breaking up of jobs into smaller and smaller units, with each worker performing fewer tasks but repeating them thousands of times a day, has contributed to health problems in manufacturing.
23. OSHA requires safeguards whether or not they are "feasible."
24. Shaw and Barry argue that the world of work tends to reproduce the traditional male-female division of labor within the family.
25. Granting workers new responsibilities and respect can benefit the entire organization.
SHORT ANSWER
1. Informed consent requires that two criteria be met. Briefly describe each of the criteria.
2. Give an example of legitimate, and an example of illegitimate, organizational influence over the individual.
3. Suppose that a company has 1,000 workers, 20 of whom are thieves. Suppose, too, that a polygraph test is 95 percent accurate. If the company subjects all its employees to a polygraph test, how many thieves will be identified? How many innocent employees will be falsely identified as thieves?
4. Explain one of the criticisms of personality tests in the workplace.
5. Different management theories rest on different theories of human nature. Explain one of the theories and how it could effect management.
6. Should one's personal sexual conduct be taken into consideration for any professional job? If no, why not? If so, what job and why?
7. The text states that in the 1970s, "the government conducted a study of work in America ... [and] identified three chief sources of worker dissatisfaction." What are these three sources of worker dissatisfaction?
8. What is the Hawthorne Effect?
9. What moral considerations indicate that companies should provide childcare?
10. Do workplace accidents "just happen"?
ESSAY
1. Explain how the findings of the Hawthorne experiment should be applied to the workplace.
2. Should the activities of a teacher outside of the classroom and school be scrutinized? Should a teacher ever be dismissed for actions outside of the workplace? Justify your answers.
3. “Safety in the workplace is good business.” Justify this statement with information from this chapter.
4. “Women should be paid for maternity leave.” List the reasoning on both sides of this issue.
5. Is drug testing ever needed for a workplace? Justify your answer.
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CIS 505 Assignment 5: Wireless Technology
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Due Week 9 and worth 60 points
There are a number of cellular phone companies each serving their own unique geographical areas. Likewise, they each may use a different technology to transfer communication. Research the pros and cons 3G and 4G technologies and its role in today’s applications.
Write a three to four (3-4) page paper in which you:
1. Compare the pros and cons of 3G and 4G technology to determine the best uses of 3G and 4G technology in today’s applications.
2. Describe how an enterprise would use 3G, 4G, WWAN, and WIAMX to improve business. Explain why they would use one (1) solution over the remaining three (3).
3. Analyze the changes in 4G technology since the printing of the textbook in 2009 and identify those of importance for a user of 4G technology.
4. Take a position on the following statement, “Wireless application protocol is a necessity for wireless communication organizations and their users.” Then, explain your position with supporting evidence.
5. Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
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CIS 512 Week 9 Assignment 3 – Strayer New
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Assignment 3: Apple versus Samsung
Apple iPads continue to be successful. The Samsung Galaxy Tab is one (1) of iPad’s competitors. Use the Internet and Strayer Library to research the advantages and disadvantages of these devices and to determine if they are comparable. Research the features of both tablets, such as the operating systems used and their capabilities, cameras (front and rear) resolution, processors, display resolution, battery life, display size, internal memory, ports, etc. Also research any available accessories, potential for future upgrades, warranties, and available support for both the iPad and Galaxy Tab.
Write a three to four (3-4) page paper in which you:
Compare and contrast the features of both the Apple iPad and the Samsung Galaxy Tab.
Compare and contrast the available accessories, potential for future upgrades, warranties, and available support of both the iPad and the Galaxy Tab.
Recommend the type of user for which the iPad is best suited. Provide a rationale for your response.
Recommend the type of user for which the Galaxy Tab is best suited. Provide a rationale for your response.
Use at least four (4) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
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CIS 562 Week 9 Assignment 4 – Strayer New
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Assignment 4: Email Harassment
Suppose you are an internal investigator for a large software development company. The Human Resources Department has requested you investigate the accusations that one employee has been harassing another over both the corporate Exchange email system and Internet-based Yahoo! email.
Write a four to five (4-5) page paper in which you:
Create an outline of the steps you would take in examining the email accusations that have been identified.
Describe the information that can be discovered in email headers and determine how this information could potentially be used as evidence in the investigation.
Analyze differences between forensic analysis on the corporate Exchange system and the Internet-based Yahoo! System. Use this analysis to determine the challenges that exist for an investigator when analyzing email sent from an Internet-based email system outside of the corporate network.
Select one (1) software-based forensic tool for email analysis that you would utilize in this investigation. Describe its use, features, and how it would assist in this scenario.
Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
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ACC 401 Week 9 Quiz – Strayer New
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Quiz 8 Chapter 13
Translation of Financial Statements of Foreign Affiliates
Multiple Choice
1. When translating foreign currency financial statements for a company whose functional currency is the U.S. dollar, which of the following accounts is translated using historical exchange rates?
Notes Payable Equipment
a. Yes Yes
b. Yes No
c. No No
d. No Yes
2. Under the temporal method, monetary assets and liabilities are translated by using the exchange rate existing at the:
a. beginning of the current year.
b. date the transaction occurred.
c. balance sheet date.
d. None of these.
3. The process of translating the accounts of a foreign entity into its functional currency when they are stated in another currency is called:
a. verification.
b. translation.
c. remeasurement.
d. None of these.
4. Which of the following would be restated using the average exchange rate under the temporal method?
a. cost of goods sold
b. depreciation expense
c. amortization expense
d. None of these
5. Paid-in capital accounts are translated using the historical exchange rate under:
a. the current rate method only.
b. the temporal method only.
c. both the current rate and temporal methods.
d. neither the current rate nor temporal methods.
6. Which of the following would be restated using the current exchange rate under the temporal method?
a. Marketable securities carried at cost.
b. Inventory carried at market.
c. Common stock.
d. None of these.
7. The translation adjustment that results from translating the financial statements of a foreign subsidiary using the current rate method should be:
a. included as a separate item in the stockholders' equity section of the balance sheet.
b. included in the determination of net income for the period it occurs.
c. deferred and amortized over a period not to exceed forty years.
d. deferred until a subsequent year when a loss occurs and offset against that loss.
8. Average exchange rates are used to translate certain items from foreign financial statements into U.S. dollars. Such averages are used in order to:
a. smooth out large translation gains and losses.
b. eliminate temporary fluctuation in exchange rates that may be reversed in the next fiscal period.
c. avoid using different exchange rates for some revenue and expense accounts.
d. approximate the exchange rate in effect when the items were recognized.
9. When the functional currency is identified as the U.S. dollar, land purchased by a foreign subsidiary after the controlling interest was acquired by the parent company should be translated using the:
a. historical rate in effect when the land was purchased.
b. current rate in effect at the balance sheet date.
c. forward rate.
d. average exchange rate for the current period.
10. The appropriate exchange rate for translating a plant asset in the balance sheet of a foreign subsidiary in which the functional currency is the U.S. dollar is the:
a. current exchange rate.
b. average exchange rate for the current year.
c. historical exchange rate in effect when the plant asset was acquired or the date of acquisition, whichever is later.
d. forward rate.
11. The following balance sheet accounts of a foreign subsidiary at December 31, 2011, have been translated into U.S. dollars as follows:
Translated at
Current Rates Historical Rates
Accounts receivable, current $ 600,000 $ 660,000
Accounts receivable, long-term 300,000 324,000
Inventories carried at market 180,000 198,000
Goodwill 190,000 220,000
$1,270,000 $1,402,000
What total should be included in the translated balance sheet at December 31, 2011, for the above items? Assume the U.S. dollar is the functional currency.
a. $1,270,000
b. $1,288,000
c. $1,300,000
d. $1,354,000
12. A foreign subsidiary's functional currency is its local currency which has not experienced significant inflation. The weighted average exchange rate for the current year would be the appropriate exchange rate for translating
Wages expense Sales to customers
a. Yes Yes
b. Yes No
c. No No
d. No Yes
13. A wholly owned subsidiary of a U.S. parent company has certain expense accounts for the year ended December 31, 2011, stated in local currency units (LCU) as follows:
LCU
Depreciation of equipment (related assets
were purchased January 1, 2009) 375,000
Provision for doubtful accounts 250,000
Rent 625,000
The exchange rates at various dates are as follows:
Dollar equivalent
of 1 LCU
December 31, 2011 $0.50
Average for year ended December 31, 2011 0.55
January 1, 2009 0.40
Assume that the LCU is the subsidiary's functional currency and that the charges to the expense accounts occurred approximately evenly during the year. What total dollar amount should be included in the translated income statement to reflect these expenses?
a. $687,500
b. $625,000
c. $550,000
d. $500,000
14. If the functional currency is determined to be the U.S. dollar and its financial statements are prepared in the local currency, SFAS 52, requires which of the following procedures to be followed?
a. Translate the financial statements into U.S. dollars using the current rate method.
b. Remeasure the financial statements into U.S. dollars using the temporal method.
c. Translate the financial statements into U.S. dollars using the temporal method.
d. Remeasure the financial statements into U.S. dollars using the current rate method.
15. P Company acquired 90% of the outstanding common stock of S Company which is a foreign company. The acquisition was accounted for using the purchase method. In preparing consolidated statements, the paid-in capital of S Company should be converted at the:
a. exchange rate effective when S Company was organized.
b. exchange rate effective on the date of purchase of the stock of S Company by P Company.
c. average exchange rate for the period S Company stock has been upheld by P Company.
d. current exchange rate.
16. In preparing consolidated financial statements of a U.S. parent company and a foreign subsidiary, the foreign subsidiary’s functional currency is the currency:
a. of the country the parent is located.
b. of the country the subsidiary is located.
c. in which the subsidiary primarily generates and spends cash.
d. in which the subsidiary maintains its accounting records.
17. Gains from remeasuring a foreign subsidiary’s financial statements from the local currency, which is not the functional currency, into the parent company’s currency should be reported as a(n):
a. other comprehensive income item.
b. extraordinary item (net of tax).
c. part of continuing operations.
d. deferred credit.
18. Assuming no significant inflation, gains resulting from the process of translating a foreign entity’s financial statements from the functional currency to U.S. dollars should be included as a(n):
a. other comprehensive income item.
b. extraordinary item (net of tax).
c. part of continuing operations.
d. deferred credit.
19. A foreign subsidiary’s functional currency is its local currency and inflation of over 100 percent has been experienced over a three-year period. For consolidation purposes, SFAS No. 52 requires the use of:
a. the current rate method only.
b. the temporal method only
c. both the current rate and temporal methods.
d. neither the current rate or the temporal method.
20. The objective of remeasurement is to:
a. produce the same results as if the books were maintained in the currency of the foreign entity’s largest customer.
b. produce the same results as if the books were maintained solely in the local currency.
c. produce the same results as if the books were maintained solely in the functional currency.
d. None of the above.
Problems
13-1 Ramsey, Inc. owns a company that operates in France. Account balances in francs for the subsidiary are shown below:
2011
January 1 December 31
Cash and Receivables 24,000 26,000
Supplies 1,000 500
Property, Plant, and Equipment 52,500 49,000
Accounts Payable (11,500) (5,500)
Long-term Notes Payable (19,000) (11,000)
Common Stock (30,000) (30,000)
Retained Earnings (17,000) (17,000)
Dividends-Declared & Paid on Dec 31 ---- 3,000
Revenues ---- (30,000)
Operating Expenses ---- 15,000
Totals -0- -0
Exchange rates for 2011 were as follows:
January 1 $0.22
Average for the year 0.19
December 31 0.18
Revenues were earned and operating expenses, except for depreciation and supplies used, were incurred evenly throughout the year. No purchases of supplies or plant assets were made during the year.
Required:
A. Prepare a schedule to compute the translation adjustment for the year, assuming the subsidiary's functional currency is the franc.
B. Prepare a schedule to compute the translation gain or loss, assuming the subsidiary's functional currency is the U.S. dollar.
13-2 Sloop Sails Corporation, a U.S. company, operates a 100%-owned British subsidiary, Sewart Corporation. The U.S. dollar is the functional currency of the subsidiary. Financial statements for the subsidiary for the fiscal year-end December 31, 2011, are as follows:
Sewart Corporation
Income Statement
Pounds
Sales 650,000
Cost of Goods Sold
Beginning Inventory 310,000
Purchases 265,000
Goods Available For Sale 575,000
Less: Ending Inventory 285,000
Cost of Goods Sold 290,000
Depreciation 79,000
Selling and Admin. Expenses 155,000
Income Taxes 32,000 556,000
Net Income 94,000
Sewart Corporation
Partial Balance Sheet
Current Assets Current Liabilities
Cash 155,000 Notes Payable 78,000
Accts. Rec. 171,000 Accts. Payable 165,000
Inventories 285,000 Other Current Liab. 51,000
611,000 294,000
Long-term Liab. 250,000
(issued July 1, 2009)
Other Information:
1. Equipment costing 340,000 pounds was acquired July 1, 2009, and 38,000 was acquired June 30, 2011. Depreciation for the period was as follows:
Equipment – 2009 acquisitions 66,000
– 2011 acquisitions 6,000
2. The beginning inventory was acquired when the exchange rate was $1.77. The inventory is valued on a FIFO basis. Purchases and the ending inventory were acquired evenly throughout the period.
3. Dividends were paid by the subsidiary on June 30 amounting to 156,000 pounds.
4. Sales were made and all expenses were incurred uniformly throughout the year.
5. Exchange rates for the pound on various dates were:
July 1, 2009 $1.79
Jan. 1, 2011 1.75
June 30, 2011 1.74
Dec. 31, 2011 1.71
Average for 2011 1.73
13-2 (Continued)
Required:
A. Prepare a schedule to determine the translation gain or loss for 2010, assuming the net monetary liability position on January 1, 2011, was 180,000 pounds.
B. Compute the dollar amount that each of the following would be reported at in the 2011 financial statements:
1. Cost of Goods Sold.
2. Depreciation Expense.
3. Equipment.
13-3 Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming the functional currency was identified (a) as the U.S. dollar and (b) as the foreign entity's local currency. Use the following letters to identify the exchange rate:
H – Historical exchange rate
C – Current exchange rate
A – Average exchange rate for the current period
Exchange rate if the
functional currency is:
Account U.S. Dollar Local currency
1. Bonds Payable (issued 01/01/08) ___________ ______________
2. Office Supplies ___________ ______________
3. Dividends Declared ___________ ______________
4. Common Stock ___________ ______________
5. Additional Paid-In Capital ___________ ______________
6. Inventory Carried at Cost ___________ ______________
7. Short-term Notes Payable ___________ ______________
8. Accumulated Depreciation ___________ ______________
9. Cash ___________ ______________
10. Marketable Securities (carried
at market) ___________ ______________
11. Cost of Goods Sold ___________ ______________
12. Sales ___________ ______________
13. Accounts Receivable ___________ ______________
14. Depreciation Expense ___________ ______________
15. Income Tax Expense ___________ ______________
Use the following information to answer Problems 13-4 and 13-5.
On January 2, 2011, Promo Inc., a U.S. parent company, purchased a 100% interest in Spot Company, a subdivision located in Switzerland. The purchase method of accounting was used to account for the acquisition. The 2011 financial statements for Spot Company, the subsidiary, in Swiss francs were as follows:
Comparative Balance Sheets
Jan. 2 Dec. 31
Cash 15,000 33,000
Accounts receivable 45,000 49,500
Plant and equipment (net) (purchased 6/30/08) 75,000 67,500
Land (purchased 6/30/08) 45,000 45,000
Total 180,000 195,000
Accounts payable 13,500 18,000
Long-term notes payable (issued 6/30/08) 31,500 27,000
Common stock (issued 6/30/08) 90,000 90,000
Retained earnings 45,000 60,000
Total 180,000 195,000
Income Statement
Revenues 180,000
Operating expenses including depreciation
of 7,500 francs 135,000
Net income 45,000
Beginning retained earnings 45,000
90,000
Dividends declared and paid 30,000
Ending retained earnings 60,000
Sales were earned and operating expenses were incurred evenly during the year.
Exchange rates for the franc at various dates are:
January 2, 2011 0.8600
December 31, 2011 0.8830
Average for 2011 0.8715
December 10, 2011, dividend payment date 0.8810
June 30, 2008 0.8316
13-4 Use the above information to answer the following question:
Required:
Translate the year-end financial statements of Spot Company, the foreign subsidiary, using the temporal method. Round numbers to the nearest dollar.
13-5 Use the above information to answer the following question:
Required:
Prepare a schedule to compute the translation gain or loss for Spot Company, assuming the temporal method of translation. Round numbers to the nearest dollar.
13-6 Bass Corporation, a U.S. Company, formed a subsidiary with a new company in London on January 1, 2011, by investing 500,000 British pounds in exchange for all of the subsidiary’s common stock. The subsidiary purchased land for 100,000 pounds and a building for 300,000 pounds on July 1, 2011. The building is being depreciated over a 40-year life by the straight-line method. The inventory is valued on an average cost basis. The British pound is the subsidiary’s functional currency and its reporting currency and has not experienced any abnormal inflation. Exchange rates for the pound on various dates were:
January 1, 2011 1 pound = 1.81
July 1, 2011 1 pound = 1.86
December 31, 2011 1 pound = 1.83
2011 average rate 1 pound = 1.82
The subsidiary’s adjusted trial balance is presented below for the year ended December 31, 2011.
�� Debits In Pounds
Cash 200,000
Accounts receivable 60,000
Inventory 80,000
Land 100,000
Building 300,000
Depreciation expense 3,750
Cost of goods sold 213,750
Other expenses 90,000
Total debits 1,047,500
Credits
Accumulated depreciation 3,750
Accounts payable 84,000
Accrued liabilities 16,750
Common stock 500,000
Retained earnings - 0 -
Sales revenue 443,000
Total credits 1,047,500
Required: Prepare the subsidiary’s:
A. Translated workpapers (round to the nearest dollar)
B. Translated income statement
C. Translated balance sheet
13-7 Using the information provided in Problem 13-6, use the temporal method instead of the current rate method.
Required: Prepare the subsidiary’s:
A. Translated workpapers (round to the nearest dollar)
B. Translated income statement
C. Translated balance sheet
13-8
On January 1, 2011, Roswell Systems, a U.S.-based company, purchased a controlling interest in Swiss Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2011 financial statements stated in Swiss francs are given below.
SWISS MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2011
Jan. 1 Dec. 31
Cash and Receivables 30,000 84,000
Net Property, Plant, and Equipment 60,000 56,000
Totals 90,000 140,000
Accounts and Notes Payable 45,000 50,000
Common Stock 30,000 30,000
Retained Earnings 15,000 60,000
Totals 90,000 140,000
SWISS MANAGEMENT CONSULTANTS
Consolidated Income and Retained Earnings Statement
For the Year Ended December 31, 2011
Revenues 112,000
Operating Expenses including depreciation of 5,000 francs 45,000
Net income 67,000
Dividends Declared and Paid 22,000
Increase in Retained Earnings 45,000
Direct exchange rates for Swiss franc are:
U.S. Dollars per Franc
January 1, 2011 $0.9987
December 31, 2011 0.9321
Average for 2011 0.9654
Dividend declaration and payment date 0.9810
Required:
A. Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation.
B. Prepare a schedule to verify the translation adjustment.
Short Answer
1. To accomplish the objectives of translation, two translation methods are used depending on the functional currency of the foreign entity. Describe the two translation methods.
2. The translation process can be done using either the current rate method or the temporal method. Explain under what circumstances each of the methods is appropriate.
Short Answer Questions from the Textbook
1. What requirements must be satisfied if a foreign subsidiary is to be consolidated?
2. What is meant by an entity’s functional currency and what are the economic indicators identified by the FASB to provide guidance in selecting the functional currency?
3. The __________is the functional currency of a foreign subsidiary with operations that are relatively self-contained and integrated within the country in which it is located. In such cases, the__________ method of translation would be used to translate the accounts into dollars.
4. The __________is the functional currency of a foreign subsidiary that is a direct and integral component or extension of a U.S. parent company. In such cases, the __________method of translation is used to translate (remeasure) the accounts into dollars.
5. Which method of translation is used to convert the financial statements when a foreign subsidiary operates in a highly inflationary economy?
6. Define remeasurement.
7. Under the current rate method, how are assets and liabilities that are stated in a foreign currency translated?
8. Under the current rate method, describe how the various balance sheet accounts are translated (including the equity accounts) and how this translation affects the computation of various ratios (such as debt to equity or the current ratio). In particular, discuss whether or not the ratios will change when computed in local currencies and compared to their calculations (after translation) using the parent’s currency.
9. What is the objective of the temporal method of translation?
10. Assuming that the temporal method is used, how are revenue and expense items in foreign currency financial statements converted?
11. A translation adjustment results from the process of translating financial statements of a foreign subsidiary from its functional currency into dollars. Where is the translation adjustment reported in the financial statements if the current rate method is used to translate the accounts?
Business Ethics Question from the Textbook
The Shady Tree Company is preparing to announce their quarterly earnings numbers. The company expectsto beat the analysts’ forecast of earnings by at least5cents a share. In anticipation of the increase instockvalue and before the release of the earnings numbers, the company issued stock options to the top executives in the firm, with the option price equal to today’s market price.
1. This type of executive stock option is often re-ferred to as “spring-loading.” Do you think this practice should be allowed? Does it provide in-formation about the integrity of the firm or is this just good business practice?
2. Do you think this practice violates the insider trading rules?
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CIS 510 Week 9 Assignment 4 – Strayer
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Assignment 4: Diversity of Approaches
Due Week 9 and worth 150 points
According to the textbook, there are at least two (2) approaches to the SDLC, two (2) approaches to software construction and modeling, and many techniques and models. The following could be possible reasons for such a diversity of approaches:
• The field is young.
• The technology changes quickly.
• Different organizations have different needs.
• There are many types of systems.
• Developers have widely different backgrounds.
Write a two to three (2-3) page paper in which you:
1. Analyze each reason listed above as a reason for a diversity of approaches to software construction and modeling, and give your opinion on whether or not each reason is valid.
2. Propose at least one (1) additional reason why you believe such diversity of approaches exists. Provide support for your recommendation.
3. Use at least three (3) quality resources outside of the suggested resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
• Analyze and present methods to initiate, specify, and prioritize information systems projects and determine various aspects of feasibility of these projects.
• Use technology and information resources to research issues in systems analysis and design.
• Write clearly and concisely about advanced systems analysis and design topics using proper writing mechanics and technical style conventions.
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ACC 575 Week 9 Assignment 1 – Strayer NEW
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Assignment 1: Federal Taxes
Due Week 9 and worth 240 points
Congress has asked you to evaluate the individual tax brackets in the federal tax code and make several recommendations to improve the fairness of the tax brackets. Using the Internet and Strayer Library, research the current federal tax brackets for individual tax payers.
Write a four to five (4-5) page paper in which you:
Give your opinion as to whether or not you believe the current progressive federal income tax structure is fair for most Americans. Provide support for your response.
Create an argument for what you believe should be the maximum federal income tax rate an individual should have to pay. Provide support for your argument.
Analyze the potential benefits that a flat tax structure might have on both taxpayers and the United States Treasury. Defend or critique a flat tax structure.
Propose at least two (2) changes to the current federal income tax structure that would benefit most taxpayers. Support your proposal with examples of such a benefit.
Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
The specific course learning outcomes associated with this assignment are:
· Demonstrate knowledge of the concepts, rules, and methodologies’ application to federal taxation, and rules related to property, transactions, and income.
· Demonstrate knowledge of the concepts, rules, and methodologies’ application to federal taxation and the ability to apply them to individuals.
· Analyze tax research processes and practice, and other tax issues.
· Use technology and information resources to research issues in business law and tax.
Write clearly and concisely about business law and tax using proper writing mechanics.
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ACC 560 Week 9 Assignment 2 – Strayer NEW
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Assignment 2 - Johnson Controls Capital Investments
Visit the Website of Johnson Controls Inc., located at http://www.johnsoncontrols.com, and review its 2012 financial forecasts. According to the forecasts, Johnson Controls will increase Capital Investment to approximately $1.7 billion. More than 70% of the company's capital expenditures in 2012 are associated with growth and margin expansion opportunities.
Write a five to six (5-6) page paper in which you:
1. Suggest a methodology to supplement the traditional methods for evaluating the Capital Investment of Johnson Controls in the emerging markets reduce risk providing a rationale of how risk will be reduced.
2. Assess the potential impact of inflation on planned capital investments in China and examine approaches for an accurate evaluation of the investments. Suggest how this knowledge may impact management’s decisions.
3. Contrast the modifications you would make in evaluating the projects to increase internal capacity in North America to evaluating expansion projects in the global market and how this information will impact the decisions made related to expansion.
4. Examine the benefits of using sensitivity analysis in evaluating the projects for Johnson Controls and how this approach can provide a competitive advantage for the company.
5. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.
Your assignment must follow these formatting requirements: · Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
· Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
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PAD 540 Week 9 Assignment 3 –Strayer
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Assignment 3: The Economy, Global Finance, and Inequality
Due Week 9 and worth 210 points
Incorporate the professor’s feedback from Assignment 2 in order to proficiently develop Assignment 3.
Use scholarly journal article and / or Strayer academic databases to complete additional research on your selected topic.
Use the major international political event that you selected for Assignment 1 in order to complete this assignment.
Use the basic outline below to draft your paper. Organize your responses to each question (except Question 5) under the following section headings:
Part III: The Economy, Global Finance, and Inequality of [Name of Select Major International Event]
The Economy (for Question 1)
Global Finance (for Question 2)
Inequality (for Question 3)
Conclusion (for Question 4)
Write a four to six (4-6) page paper in which you separate the content into sections:
Evaluate the extent to which your chosen event impacted the international political economy (e.g., international and domestic trade, currency exchange system, debt, and capital). Provide relevant examples of such an economic impact—or lack thereof—to support your response.
Assess the extent to which your chosen event impacted global finance (e.g., GDP, direct investments, fiscal and monetary policies, and the balance of trade). Provide relevant examples of such an economic impact—or lack thereof—to support your response.
Discuss the role that global inequality and poverty have played in your chosen event. Provide examples of these roles to support your rationale.
Recommend primary strategies that you believe would aid the main participants in your chosen event in developing policies geared towards preventing a repeat occurrence of the event in the future.
Use three (3) additional quality references. Note: Wikipedia, online dictionaries and encyclopedia, and other non-scholarly Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze the major developments in international politics and how they have evolved.
Assess how the major assumptions of international relations have shaped public policy.
Evaluate the key economic concepts and theories in international politics including global trade, finance, and inequality.
Predict the trends of global governance and its influence on the world population.
Use technology and information resources to research issues in international public administration.
Write clearly and concisely about international public administration using proper writing mechanics.
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BUS 599 Week 9 Assignment 4 – Strayer New
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Assignment 4: Presentation
Due Week 9 and worth 70 points
After you have fleshed out your business plan you will have the information you will need for a slide presentation (e.g., PowerPoint). This 12-slide presentation conveys the most important aspects of your business in a short time. More sophisticated investors, such as angel investors and venture capitalists, will typically not look at your written business plan until they have seen your slide presentation.
Presentation (MS PowerPoint or equivalent)
1. Create a 12-slide presentation. Follow the outline on pp. 343–346 for the critical slides of your presentation and their placement. Click here for help accessing a specific page number in your eBook.
o Hints: Include the highlights of your elevator pitch, which shows that you understand your business. The elevator pitch is a concise description of your company—its product, market, competitive advantages, and so on. Whether pitching your business to an investor or describing it to a potential connection at a networking event, you need to be able explain your business succinctly to someone in the amount of time it would take to ride up a few floors in an elevator. Use the worksheet in the text (p. 362 | Your “Elevator Pitch”) to develop your elevator pitch.
o Hints: You must limit your presentation to twelve (12) slides. You do not want to overwhelm your audience with too many slides or bore them with information they already know.
Cite three (3) resources you have used to complete the exercise.
o Citations and references must follow APA format. The reference page is not included in the required page length
The specific course learning outcomes associated with this assignment are:
· Describe strategic planning techniques used to formulate alternative strategies designed to achieve stated business goals.
· Create a plan to implement a firm’s strategy and manage the change from current operations.
· Analyze strategies for exerting the internal leadership needed to drive the implementation of strategic initiatives and improve operating excellence.
· Use technology and information resources to research issues in strategic management.
· Write clearly and concisely about strategic management using proper writing mechanics.
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