EDR 610 BUSINESS EMBA TEST PREP | LATEST VERSION

EDR 610 BUSINESS EMBA TEST PREP Which of the following is true of the idea screening phase of the new product development process? New product ideas are not eliminated merely because they are outside the fields of a ...

EDR 610 BUSINESS EMBA TEST PREP Which of the following is true of the idea screening phase of the new product development process? New product ideas are not eliminated merely because they are outside the fields of a firm's interest in this stage. Lack of technology and resources is often not a useful reason to discount new product ideas in this stage. A firm needs to consider three categories of risk and its associated risk tolerance in this stage prior to reaching a decision. Unlike the idea generation stage, this stage is not involved in expanding viable ideas into full product concepts. Axon Automobiles Ltd., an American automobile manufacturing company, manufactures cars in left-hand drive configuration, in which the driving seat and controls are positioned on the lefthand side of the vehicle. On exporting its products to select automobile dealers in India, the company witnessed a significant dip in its sales as Indians require vehicles in right-hand drive configuration. This failure can be best attributed to: the lack of personal selling on the part of the sales force. entering a domestic market without extensive product planning. the lack of adequate pricing strategies in foreign markets. problems encountered in effectively using census data. Which of the following denotes a growth direction through the increase in market share of present products in present markets? Market penetration Diversification Market development Benchmarking Which of the following is true of mass merchandisers? They handle deep assortments in a limited number of product categories. They compete on the basis of providing variety in different product categories and low-priced products in their large assortments. They are retailers whose primary advantages to consumers are suitable location, close-in parking, and easy entry and exit. They are large, low-priced limited-line retail chains that attempt to capitalize and establish themselves in a single product category. The management of Delicaci, a multi-cuisine restaurant, is very conservative and insists that its chefs follow traditional recipes and frowns upon any experimentation. The management also insists on playing regular music in the restaurant to conform to the brand image it has established. Moreover, despite receiving negative customer feedback, the management is reluctant to change its mode of operations. This particularly implies that the management of the restaurant: has a limited view of marketing. lacks creativity. lacks strong competition. lacks obsolescence. Which of the following is a type of psychological pricing strategy? Cost-plus pricing Rate-of-return pricing Markup pricing Bundle pricing Gable Brothers Inc. is trying to find a viable market for its new fountain pen. After conducting a psychographic segmentation, it found that the segment of potential consumers is so small that the volume in sales would not be profitable for the company. Therefore, top management has decided to not release the product into the market. In the context of the stages of the market segmentation process, the company is currently: deciding the market segmentation strategy. delineating the firm's current situation. dividing markets on relevant dimensions. determining consumer needs and wants. _____ retailing is the fastest-growing method of retailing. Direct Limited-line System Online Which of the following is responsible for making the comprehension of service marketing difficult? Lack of demand for services Excessive marketing expertise Factors of intangibility and inseparability Obsolescence of services Which of the following is true of local advertising agencies? Companies using local advertising agencies are able to take advantage of economies of scale. Local advertising agencies in emerging markets take a more entrepreneurial and fresher approach to advertising than global agencies. Local advertising is always more successful than advertising through global agencies. Local advertising agencies are better than global agencies in adapting a firm's message to different cultures. An organizational purchase that involves extensive research and large investments and happens occasionally is typically a _____. modified rebuy new task purchase just-in-time purchase straight rebuy Products that are purchased by business firms for the purpose of producing other goods or for running a business are called _____. convenience goods organizational goods specialty goods shopping goods What does the horizontal dimension of the VALS™ framework represent? Degree of innovativeness Level of resources Consumer needs Primary motivation The Helen Mortimer Foundation is a nonprofit organization that develops marketing strategies to encourage people to stop smoking in an effort to reduce the incidence of lung cancer. This best exemplifies marketing for a(n) _____. organization person Cause service An advantage for many service industries is the fact that services, because of their intangibility, are less subject to _____ than goods. Obsolescence Innovation quality control Creativity Which of the following observations about how behavioral influences affect organizational buying is true? Different buyers will have different degrees of commitment to their buying role in the organization. Organizational buyers are not subject to personal motives in the buying decisions as are other individuals. In a lethargic organization, individuals approach their occupation with a weak commitment to the expected norms of behavior. Organizational buyers are typically unaffected by organizational culture as they are primarily concerned with suppliers. An automobile manufacturing firm decides to meet all its suppliers while planning to manufacture a new automobile that is a minor variant of an existing model in terms of design and performance. The firm wants to provide its loyal customers with automobiles at a low price without compromising on performance. According to authors Crawford and DiBenedetto, this new product falls into the category of _____. cost reductions price redemptions repositionings price exemptions An ad for Concordia kitchen cabinets states "For an exceptional look in cabinetry that you won't find anywhere else, buy Concordia cabinets." This is an example of positioning: based on superiority to competitive products. in terms of superior product users. based on being a cost leader in the market. in terms of where consumers live and shop. Markup pricing: is commonly used in retailing. is commonly used by manufacturers. is most often used to describe the pricing of jobs that are nonroutine and difficult to "cost" in advance. is a psychological pricing strategy. HealthPro cereal ads show the cereal being used as a topping on yogurt, as a snack when topped with honey, and served hot as an alternative to oatmeal. In this case, HealthPro is using a positioning strategy based on: superiority to competitive products. consumer lifestyles. particular types of product users. use or application. Which of the following best describes external information for marketing information systems? Inventory data that can indicate how rapidly products are selling Expenses incurred by a company in personal selling Costs incurred by a company for advertising its products and services Information on technological advances in the field A producer of alcoholic beverages produces four different brands of beer: BlackStar, BlueStar, Grandeur, and Holmes. BlackStar is a standard brew, while BlueStar has a low alcohol content. Grandeur is low in calories, and Holmes has a high alcohol content. In this case, the manufacturer uses different brand names for each of its products to: associate the image of one product with that of another. increase consumer brand awareness. enter a new product class. target specific market segments more efficiently. The depth of a product mix refers to the: average number of products in each product line. degree of similarity between product lines. number of product lines handled by the organization. total number of products or items in the company's product mix. In which of the following scenarios is new task purchase most likely to be used? For the purchase of a pair of shoes For the purchase of real estate For the purchase of a mattress For the purchase of grocery items According to the general pricing model, in the short term, discounts and allowances offered by manufacturers have to be larger or more frequent than initially planned because: there is an impending need to increase demand to profitable levels. there is a need to prevent channel members from becoming independent manufacturers. the price structure that has been fixed cannot be reviewed at regular intervals. there is only one way for money to flow out of firms through the price-product mechanism. Which of the following is true of agricultural goods and raw materials? These products have a high value per unit. These products are fairly homogeneous. These products are always sold in single units or in small volumes. These products cannot be used to produce other goods. Which of the following is an activity performed by sellers and others that accompany the sale of a product and that aid in its exchange or its utilization? Securing a bank loan Offering a home security plan Seeking a health insurance cover Availing warranty on computer equipment An independent designer sells his exclusive collection of premium sportswear for men and women at specialty stores and select departmental stores nationwide. He considers his products as being characterized by high unit value and limited frequency of purchase. Before choosing his intermediaries, he checks to ensure that they have a good reputation in the market. Which of the following methods of distribution is the designer most likely using? Selective Restrictive Intensive Extensive Which of the following is an example of a client relationship? Leasor-leasee Telecaller-consumer Salesperson-customer Broker-investor In contrast to organizational goods, consumer products are often distributed through _____. matrix channels indirect channels horizontal channels control channels Which of the following products or services is most likely to be distributed through an indirect channel? Smartphones Complex medical equipment Tropical flowers Computer systems Which of the following is true of the research approach to determining the advertising budget? It attempts to determine retail price by using production costs as a base. It is a less rational approach to the expenditure decision when compared to other models. It is generally more expensive when compared to some other models. It is less desirable as it limits advertising outlays to the amount of available funds. With regard to product improvement, _____ refer mainly to product features, design, package, and so forth. marketing dimensions attributes extensions fads Alison receives a phone call from an Easy-Wash customer service representative who wants information on her experience with the washer-dryer combination that she had recently purchased and the overall purchase and installation experience. Alison claims that she is extremely satisfied with the purchase and the company's responsiveness. This customer service practice by Easy-Wash is undertaken to _____. offer the customer a substantial assessment of available alternatives by providing a marketing source of information help the customer in the process of alternative evaluation reduce the perceived psychosocial risks associated with the decision to purchase the product reduce the possibility of postpurchase dissonance in Alison's mind The best-known psychographic segmentation called _____, which was originally developed in the 1970s, explains and predicts consumer behavior. AIO VALS ZIP PRIZM Which of the following is true about missionary salespeople? They are used to focus exclusively on promotion of existing products and introduction of new products. They are used when a product is extremely high priced and is being sold to the whole organization. They provide training to the front-line staff of the buying organization. They are especially useful when a product is to be used to solve certain technical problems of buyers. Soffia Inc. manufactures a moisturizing soap with anti-ultraviolet properties, which is sold under the brand name DewMist. The company also manufactures Safechoice, a non-abrasive, antibacterial brand of soap, which is a different brand. Which of the following strategies has Soffia used in this scenario? Multibranding strategy Dual branding strategy Cobranding strategy Family branding strategy Which of the following is true of slotting allowances? They are discounts offered for purchasing a large number of units. They are often in the form of price reductions for performing promotional activities. They tend to add marketing cost to a manufacturer and affect profits. They are payments made by retailers to manufacturers to allow them to stock the manufacturer's products. Which of the following is defined as the elapsed time between product definition and product availability? Scalability Time to market Cycle time Information provision Which of the following viewpoints about the contribution of advertising to the economic health of a firm sees advertising as a competitive weapon and places emphasis on the strategic aspects of the advertising function? The generalist viewpoint The specialist viewpoint The consumer attrition perspective The marketing management approach Sharla, Thom, and Irving started working at the Golden Hotel one year ago. Though they were all hired at the same time and for the same position, Sharla is often viewed as being a leader on the team. Sharla is an example of a ________ leader. charismatic transactional transformational sanctioned Nonsanctioned Which of the following terms best describes the tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others? fundamental attribution error randomness error halo effect selective perception Overconfidence Why are management by exception leaders considered ineffective? They provide considerable freedom to their employees. They fail to build followers' self-esteem and confidence. They are not team oriented, participative, or humane. They tend to be available only when there is a problem. They describe their least preferred coworker in favorable terms. Which of the following conflict-handling intentions is unassertive and uncooperative? collaborating compromising accommodating competing Avoiding Which of the following is not a reason why organic structures promote innovation? low centralization low vertical differentiation high formalization cross-fertilization high flexibility Which of the following theories proposes that people prefer to feel they have control over their actions, so anything that makes a previously enjoyed task feel more like an obligation than a freely chosen activity will undermine motivation? motivation-hygiene theory goal setting theory self-determination theory theory of needs two-factor theory The University of Michigan studies define a(n) ________ leader as one who takes a personal interest in the needs of his/her subordinates. contingency task-oriented employee-oriented production-oriented structure initiating _______ indicates the tendency of an individual to attribute his own successes to internal factors while putting the blame for failures on external factors. Distinction bias Self-serving bias Selective perception Fundamental attribution error Stereotyping A ________ is consistent with recent efforts by companies to reduce costs, cut overhead, speed up decision making, increase flexibility, get closer to customers, and empower employees. wider span of control high degree of formalization lack of work specialization high degree of centralization longer chain of command Which of the following terms refers to the process by which an individual's desire for acceptance by the group and the pressure by the group on individual members to match its standards results in a change in individual attitudes and behaviors? coercion convergence confluence conformity commitment The theory of cognitive dissonance was proposed by ________. Skinner Hofstede Maslow Festinger Pavlov During the "design" step of appreciative inquiry, participants ________. use information from the discovery phase to speculate on possible futures find a common vision of how the organization will look in the future recount times they felt the organization worked best write action plans and develop implementation strategies identify the organization's strengths What sort of goals does Management by Objectives (MBO) emphasize? inspirational, verifiable, and creative tangible, verifiable, and measurable profitable, attainable, and verifiable achievable, controllable, and profitable challenging, rewarding, and measurable In the context of behavioral dimensions of leadership identified in the Ohio State Studies, ________ is the extent to which a person's job relationships are characterized by mutual trust, respect for employees' ideas, and regard for their feelings. position power initiating structure task orientation consideration production orientation _______ and ________ people are more likely to assert themselves in group situations. Stern; dominant Sociable; manipulativ e Sociable; withdrawn Stern; manipulativ e Sociable, dominant Harriet has been assigned the task of setting up work teams for a complex software development project. Each team has different work requirements. Harriet must choose the best structure for each team, based on its specific requirements. Team A must operate very quickly to meet stringent deadlines. The quality of the final project depends highly on Team A's output, so Team A must also work very accurately. Which of the following network structures should Harriet choose for this team? w heel m esh sta r ch ain all -channel In the case of distributive bargaining, the ____ point indicates what a person would like to achieve out of a negotiation. fo cus re sistance cl arification tar get cl osure The right inherent in a managerial position to give orders and expect orders to be obeyed is termed ____. un ity of command ch ain of command au thority le adership sp an of control Plagiarism includes using someone else’s words without quotation marks. writing the same paragraph for two different course assignments without indicating (the second time) that you have used it before. unintentionally omitting a reference for something you found on the Internet. all of the above According to the concept of organizational demography, if team members have dissimilar experiences, it will lead to ____. hi gher employee motivation hi gher employee turnover hi gher team efficacy in creased employee satisfaction de creased level of conflicts Ample evidence exists which indicates that an employee who is satisfied and treated fairly is more likely to ____. be recruited by other organizations be come used by others within the team en gage in citizenship behaviors be named team lead m eet their managers expectations Which of the following statements is true regarding task conflicts? Ta sk conflicts are almost always dysfunctional. Gr oups performing routine tasks won't benefit from task conflict. Ta sk conflicts relate to how the work gets done. Ta sk conflict focuses on interpersonal relationships. Ta sk conflicts hinder creativity and innovation. You are responsible for the annual holiday toy drive at your workplace. Every few days, you send out an email of how many items have been collected and post a picture of one of your coworkers putting a toy in the box. What influence tactic are you trying? nu dging re ward system pe er pressure fo rce es calation of commitment Lydia works as a 911 operator. Her job strength is dictated most likely by ____. cl arity co nsistency co nsequences co nstraints co mprehension In discussing a given set of alternatives and arriving at a solution, group members tend to exaggerate the initial positions they hold. This phenomenon is called ____. gr oupshift e motional labor gr oupthink sel f-concordance sat isficing Which one of the following characteristics is not necessarily true about groups? Gr oups have two or more members. Gr oups have particular objectives. Gr oups interact. Gr oups are determined by the organization chart. Gr oup members are interdependent. According to the Myers-Briggs Type Indicator (MBTI) classification, people belonging to the "____" type are practical and prefer routine and order. fe eling pe rceiving se nsing ex traverted int roverted Sharon is unhappy with her job as a salesperson at a retail store for many reasons. Yesterday a customer asked her where the shampoo was located. Sharon listlessly replied, "I don't know." She then turned her back on the customer and continued stocking the shelf. This is an example of how job satisfaction can affect ____. cu stomer satisfaction w orkplace deviance e mployee OCB ab senteeism tur nover Which of the following is not a possible result of felt conflict? ho stility fr ustration an xiety in difference te nsion According to research findings, which of the following is more likely to be motivating for the employees in the long run? co mmissions m erit-based pay st ock options re cognition bo nuses Which of the following statements is not true regarding subcultures? If organizations were composed only of numerous subcultures, organizational culture as an independent variable would be significantly less powerful. Su bcultures include core values of the organization. Su bcultures influence members' behavior. Su bcultures typically exist within a department. W hen we talk about an organization's culture, we are referring to its subculture. Joanna watches her friend Sharon slim down. This increases her confidence that she can lose weight too. Which of the following ways of increasing self-efficacy is represented by this example? vi carious modeling ve rbal persuasion ar ousal fo cused training en active mastery Jennifer has come to realize that conflict has both functional, as well as dysfunctional, outcomes. She has observed examples of both in her organization. Last month, Jennifer's department experienced constructive conflict during a meeting. Which of the following is not an outcome of this functional conflict? Te nsions are released. Gr oupthink is increased. Int erest and curiosity are encouraged. Cr eativity and innovation are stimulated. Th e quality of decisions is improved. Which of the following employees does not exhibit deviant behavior in the workplace? Li ly does not show up for work for more than 3 days a week. Sa muel quits his job because his manager never appreciates his efforts. Ca ra wraps up her work early to attend her daughter's ballet recital. Jo anna, an HR executive, uses work time to surf articles on the latest fashion trends. W ilson takes work supplies like pens and paper clips home for personal use. The ____ of an environment refers to the degree of heterogeneity and concentration among environmental elements. co mplexity pe rmeability vo latility ad aptability fle xibility Diane and Clarke are two employees in an organization who recently started working together. Diane is an older, long-tenured woman raised in rural Kansas, who achieved her current level in the organization by starting as a high school graduate and working her way up the hierarchy. Clarke is a young, recently hired male college graduate with a business degree, raised in a Spanish-speaking neighborhood in Miami. However, both are deeply committed to their families, share a common way of thinking about important work problems, like to work collaboratively, and are interested in international assignments in the future. Which of the following describes the diversity between these two? de ep-level diversity lat eral-level diversity hi erarchical-level diversity su rface-level diversity in dividual-level diversity Which of the following is the first step in the Kotter's eight-step plan for implementing change? Es tablish a sense of urgency by creating a compelling reason for why change is needed. C ommunicate the vision throughout the organization. Pl an for, create, and reward short-term "wins" that move the organization toward the new vision. Fo rm a coalition with enough power to lead the change. Cr eate a new vision to direct the change and strategies for achieving the vision. Which of the following statements best defines a work group? A work group consists of 5 or more people who work collaboratively. A work group is a group comprised of 10 or more people who belong to the same department. A work group interacts primarily to share information, rather than to engage in work that requires joint effort. A work group's performance is generally greater than the sum of its inputs from individual members. A work group has a positive synergy and no active group dynamics, resulting in greater outputs. anice and Shunil are both senior software analysts. They have worked together on projects for six years and get along great. Janice is pregnant and anticipating the arrival of her first child and she is not willing to work full time. Shunil would like to experiment with opening his own business as a home media installation consultant, and does not want to continue to work full time. They both need some income. Which of the following alternative job structures would be best for Janice and Shunil? jo b enrichment jo b rotation jo b sharing jo b enlargement tel ecommuting Fiedler's contingency leadership model assumes that ____. an individual can use the LPC to change his/her style to a more productive style an individual's leadership style is essentially fixed ea ch person's style will change in accordance with the situation at hand th ere is no ideal way to match leadership styles with situations all leaders can learn to adapt to different contingencies The conflict-handling intention of collaborating is ____. aff ective and reflective un assertive and cooperative as sertive and uncooperative as sertive and cooperative un assertive and uncooperative Eva is not getting the results she needs from her data base administration team. She believes that this problem is occurring because the administration team is a virtual team. Which of the following is one of the things that Eva should do to create an effective virtual team? Al low more independence among members. A void publicizing team successes company-wide. In clude peer evaluation in the appraisal system. M onitor progress of the team closely. C onduct training for improving interpersonal skills The things that an organization does so well that they give it an advantage over similar organizations represent that organization's ___. co mpetitive parity di stinctive competencies ex ternal opportunities ve ndor analysis variables The nation of Lancaster is embroiled in civil war. Its citizens, who are against the government, have resorted to armed conflict. Consequently, which of the following problems is a foreign company operating in Lancaster likely to face? C ultural misunderstanding Im port restrictions Le gal risks Po litical uncertainty Which of the following critical components of internal marketing would typically help people who deliver service to know how their work fits in the broader scheme of business operations? A n emphasis on teaching employees to have good attitudes A n energetic follow-through process A careful selection process in hiring frontline employees A clear, concrete message conveying a particular service strategy What does the horizontal dimension of the VALS™ framework represent? D egree of innovativeness Le vel of resources C onsumer needs Pr imary motivation HealthPro cereal ads show the cereal being used as a topping on yogurt, as a snack when topped with honey, and served hot as an alternative to oatmeal. In this case, HealthPro is using a positioning strategy based on: su periority to competitive products. co nsumer lifestyles. pa rticular types of product users. us e or application. Which of the following statements about product involvement is true? Pr oduct knowledge is unrelated to product involvement. Th e level of product involvement with a product requiring routine decision is the same as that of a product requiring extensive decision making. Pr oduct involvement is independent of the group, marketing, and situational influences operating on a potential consumer. A high degree of product involvement encourages extensive decision making by consumers. If a previously acceptable product for satisfying a consumer need is remembered, and the consumer bases the particular purchase decision on it with little or no additional information search or evaluation, then the source of information can be best described as a(n) ___. int ernal source gr oup source m arketing source pu blic source According to Michael Porter's diamond model of national advantage, which of the following factors refers to a nation's ability to turn its natural resources, skilled labor, and infrastructure into a competitive advantage? Fa ctor conditions Re lated and supporting industries C ompany strategy, structure, and rivalry D emand conditions In the process of market segmentation, determining customer needs and wants is immediately followed by: di viding the organization's products into different product classes according to their features for sale through a mass marketing mechanism. de signing the appropriate marketing mix strategies to be used for each segment. de lineating the firm's current situation which aids in developing marketing mixes. gr ouping consumers on the basis of one or more similarities and treated as a homogeneous segment of a heterogeneous total market. ConiferCraft is a furniture firm that specializes in creating customized furniture for the commercial market. The firm has recently acquired a large amount of funds from investors and is looking to diversify by introducing customized products for the industrial market. The firm has conducted a complete situation analysis for the purpose and the results are favorable. According to the market segmentation process model, the firm must next: di vide markets on relevant dimensions. de cide segmentation strategies. de velop product positioning strategies. de termine consumer needs and wants. When an employee at Fun Bay Resorts hears a customer complain, he or she is authorized to record the issue and take the necessary actions to resolve the issue. This strategic reaction to customer complaints shows Fun Bay Resorts' emphasis on ___ as a determinant of service quality. re sponsiveness ta ngibility rel iability e mpathy Which of the following is a secondary data source for sales lead generation? Se minars Ca talogs Di rectories Sp otters A retail cooperative organization, a wholesaler-sponsored voluntary chain, and various franchising programs are the three major types of ___ vertical marketing systems. ad ministered co ntractual str uctured co rporate Which of the following is most likely to be a reason for a firm to price a product above competition? Th e firm is selling a homogenous product. Th e demand for the firm's product is price elastic. Th e firm is a price leader in the industry. Th e firm's product is inferior in comparison to its counterparts. A ___ provides the practical benefit of limiting the distance each salesperson must travel to see customers and prospects. sy ntactic structure ge ographic structure cu stomer structure pr oduct structure In the context of global marketing, which of the following best represents a defensive goal? A n international apparel brand's goal to conduct research across its areas of operation in order to find customer preferences and improve overall market position A Swiss chocolate firm's plan to expand its operations to India to reap the benefits of economies of scale A n American candy manufacturer's ambition to take advantage of the differences in operating costs between countries A n Italian pizzeria's desire to enter into a franchising agreement with a firm in the United States to enhance its profit prospects The management of Delicaci, a multi-cuisine restaurant, is very conservative and insists that its chefs follow traditional recipes and frowns upon any experimentation. The management also insists on playing regular music in the restaurant to conform to the brand image it has established. Moreover, despite receiving negative customer feedback, the management is reluctant to change its mode of operations. This particularly implies that the management of the restaurant: has a limited view of marketing. la cks creativity. la cks strong competition. la cks obsolescence. Which of the following is an example of a specialty store? Si ngle-line stores Su percenter outlets Di scount stores D epartment stores The stage of performance of the research involves: co ding, labeling, and structuring data. de fining the nature and purpose of collecting data. an alyzing and interpreting the collected data. pr eparing for data collection and actually collecting them. When individual sales personnel are assigned specific regions to handle and represent all of a company's products, it is indicative that the company follows a: pr oduct structure to organize its sales force. ge ographical structure to organize its sales force. cu stomer-specific sales management approach. m ajor account management or team selling approach. Which of the following is true of selecting media in foreign markets? Al l countries have severe restrictions on the use of broadcast media for advertisements. M edia that are traditionally used in the domestic market may not be available in foreign markets. W here data are available, their accuracy is always conclusive. If media are available, they are able to reach all potential buyers. Identify the primary reason for conducting a product audit. To develop a marketing plan for new products To detect sick products and bury them To earn the estimated profits without introducing new products To implement cost-cutting strategies without altering the product mix The marketing team at Shine Inc. is conducting research to determine why its perfume sales have dropped suddenly and drastically. The marketing manager, Adriano, is wondering if the drop in sales is a result of a recent and controversial newspaper article about the company's use of animal fat in its perfumes. He sends out a questionnaire by e-mail to Shine Inc.'s wide customer base to gather relevant information. Which of the following types of research methods is Adriano using in this scenario? O bservational research Ex perimental research Su rvey research M athematical modeling A corporate vertical marketing system is exemplified by: a florist shop that buys from a wholesale plant nursery. a coffee producer who owns one of his regular retailers. th e relationship of an independent retail giant with its suppliers. th e franchise system of a popular apparel store. A drawback of using Internet surveys as a data collection method in marketing research is that: th ey take a long time to be executed. th ey make real-time data processing impossible. th ey pose difficulties in generating sample frames for probability sampling. th ey create a high degree of perceived intrusion as respondents cannot answer the questions at their convenience. Which of the following is true of the rate-of-return approach to pricing? Ra te-of-return pricing is commonly used by manufacturers. Ra te-of-return pricing is a psychological pricing strategy. Ra te-of-return pricing does not involve circular reasoning. Ra te-of-return pricing places maximum emphasis on estimating sales volume. In personal selling, which of the following falls under the persuasion objective of the sales force? D eliver or install a product or service that meets customer expectations Fo llow up promptly with calls and visits to address unresolved concerns G uarantee product or service superiority through demonstrable actions M aximize the number of sales as a percent of presentations An independent designer sells his exclusive collection of premium sportswear for men and women at specialty stores and select departmental stores nationwide. He considers his products as being characterized by high unit value and limited frequency of purchase. Before choosing his intermediaries, he checks to ensure that they have a good reputation in the market. Which of the following methods of distribution is the designer most likely using? Se lective Re strictive Int ensive Ex tensive Which of the following perspectives views a channel of distribution as more than a series of markets or participants extending from production to consumption? Be havioral perspective Te chnological perspective Sy stemic perspective G eodemographic perspective Why is it inadvisable for a follower to attempt to directly position its product against the industry leader? C ompeting with market leaders can be costly and not often successful. A follower's product usually dominates in sales and in the minds of customers. It is difficult for followers to select segmentation strategies. A follower can never compete with the industry leader in terms of product quality. Marilyn is not particularly concerned with fashion although she believes in buying quality merchandise. Her interests lie mostly in theater and art. She frequently travels to Europe to purchase paintings and artwork of renowned artists to add to her extensive private collection. To which of the following social classes does Marilyn most likely belong? Th e working class Lo wer Americans Th e middle class U pper Americans It is important for a mission statement to be ___ because it provides a shared sense of purpose outside the various activities taking place within the organization. int ernally focused pr oduct oriented m otivational ge neric Most convenience goods require a(n) ___ form of distribution. fo cused int ensive ex clusive sel ective Heidi, the marketing manager of a cosmetics manufacturing company, decides to fix the price of a new perfume at $89.99. She believes that the odd pricing of the product will encourage potential buyers to think of the product as less expensive. Which of the following factors has Heidi considered when making her pricing decision? En vironmental factors D emographic factors Ec onomic factors Ps ychological factors Bill works as a purchasing agent in a construction company. His assistant, Linda, screens calls from potential vendors trying to sell their construction equipment to the company. Her job involves allowing suitable vendors who meet the company's strict product standards to contact Bill. Furthermore, she has to ensure that major purchasing deals are kept confidential until contracts are signed. Which of the following best describes Linda's role within the buying center? G atekeeper B uyer D ecider Ini tiator The concept that focuses an organization's attention on providing continuing satisfaction and reinforcement to individuals or organizations that are past or current customers is known as ___. str ategic alliancing co mmercialization aft ermarketing pr ospect maintenance Carrie is an organizational buyer of a supplier that provides nursery products to Dulko, a large retail store. In a management meeting, she proposes that the company replace their three current suppliers of plastic containers and trays, who have been selling to the company for the past 20 years, with a single supplier who guarantees on-time delivery. Attendees at the meeting are unenthusiastic about Carrie's proposal as they like the traditional suppliers and are unwilling to switch. Carrie, in order to maintain acceptance and keep conflict to a minimum, suggests that they try the plan for three months and revert to the original supplier if it fails to work. What kind of an organizational climate is described in this example? In novative Li beral Re sponsive Le thargic Holding other things constant, decreases in the price level in the US will a. Cause the dollar to appreciate b. Cause the dollar to depreciate c. Cause no change in dollar value d. None of the above An advantage for many service industries is the fact that services, because of their intangibility, are less subject to ___ than goods. ob solescence in novation qu ality control cr eativity A business owner makes 50 items a day. He spends 8 hours in producing those items. If hired elsewhere he could have earned $10 an hour. The item sells for $10 each. Production occurs seven days a week. If the explicit costs total $10,000 a month, the accounting profit for the month equals: a. $11,760 b. $5,000 c. $2,240 d. $1,760 If your income goes up by 2% and, in response, the quantity demanded of good x rises by 3%, good x can be considered a. An inferior good b. A normal good c. A private good d. A public good An English auction is a. A sealed auction b. An oral auction c. An auction where bidders submit decreasing bids d. All of the above Economists argue that: a. some decisions have opportunity costs, while others don’t. b. economic decisions should include sunk costs. c. accounting costs include all types of costs, even implicit costs. d. every decision has an opportunity cost. A business owner makes 1000 items a day. Each day she spends 8 hours producing those items. If hired, elsewhere she could have earned $250 an hour. The item sells for $15 each. Production occurs seven days a week. If the explicit costs total $150,000 per month, what is her economic profit? a. $450,000 b. $300,000 c. $240,000 d. $60,000 A pharmaceutical company faces a price regulation where it cannot charge any higher than $5,000 for a lifesaving drug. The company knows that the patients put a high value on this product and are willing to pay up to $10,000 for it. The company decides to sell the drug together with periodic blood testing for $10,000. This is an example of a. Tying b. Bundling c. Fraud, the company is not allowed to sell for any higher than the regulatory pric d. Both A&B A buyer values a house at $525,000 and a seller values the same house at $485,000. If sales tax is 8% and is levied on the buyer, then, what would be the highest price that the buyer would be willing to pay? a. $486,111 b. $523,800 c. $485,000 d. $525,000 A firm sets its price at $10.00 per unit. It has an average variable cost of $8.00 and an average fixed cost of $4.00 per unit. In the short run, this firm is a. incurring a loss per unit of $2.00, but since it can still cover its variable costs, should continue to operate b. incurring a loss of $2.00 per unit and should shut down. c. incurring a profit. d. unable to cover all of its fixed cost and hence should shut down. For direct price discrimination to work a. The firm need not be able to identify the members of the low-value group b. The firm be able to charge the low-value customers a lower price than the highervalue customers c. The firm need not worry about any arbitrage since all its customers are charged the same price d. It needs to be too complicated for the customers to understand If a panic causes Indian depositors to withdraw their money from Japanese banks, it would cause the Japanese Yen to _____, since the supply of Yen has increased a. None of the above b. Depreciate c. Appreciate d. Not change in value Amusement parks often offer coupons to the local market that are not available to tourists. This is an example of a. Direct discrimination scheme b. Indirect discrimination scheme c. Both of the above d. None of the above Firm X both produces automobiles and owns gas stations. If decides to decrease the gas to induce higher sales for the automobiles, it means that a. the gas and the automobiles are complements b. the gas and the automobiles are substitutes c. the gas and the automobiles are not related in demand d. none of the above If potatoes are inferior goods, which of the following will increase the demand for potatoes? a. Decrease in income b. Increase in income c. Decrease in the price of a substitute d. Increase in the price of a complement A difference between moral hazard and adverse selection is that a. moral hazard deals with pre-contractually determined public information b. adverse selection deals with pre-contractually determined private information c. adverse selection deals with post-contractually determined public information d. moral hazard deals with post-contractually determined private information A business incurs the following costs per unit: Labor $125/unit; Materials $45/unit and rent $250,000/month. If the firm produces 1,000,000 units a month, the total variable costs equal a. $125Million b. $1Million c. $170Million d. $45Million The price elasticity of demand for a printer is estimated to be 1 . This means that an increase in price by 10% will a. Increase quantity demanded by 10% b. Increase demand by 10% c. Decrease quantity demanded by 10% d. Decrease demand by 10% An example of moral hazard is a. health care insured workers dieting and exercising b. drivers of safer cars texting on their phones while driving c. borrowers investing their loan proceeds exactly as the bank requires d. workers working diligently even though the boss is not looking A perfectly elastic demand curve a. Is a horizontal line parallel to the x axis b. Has an elasticity of demand between 0 and 1 c. Is the demand curve of a product that usually has no substitutes d. None of the above A price elasticity of demand of 2.3 implies a. Demand is unitary elastic b. Demand is inelastic c. Demand is perfectly elastic d. Demand is elastic All these are characteristics of a monopoly except, a. There is one seller of the product b. Controls a small share of the market c. Controls a large share of the market d. Has few substitutes A firm sells 1000 units per week. It charges $15 per unit, the average variable costs are $10, and the average costs are $25. At what price does the firm consider shutting-down in the long run? a. $25 b. $15 c. $10 d. $0 A food company trying to increase its profits by expanding in to the soft drinks business is an example of a. Economies of scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope [2:45 PM, 3/15/2020] Sayali More: A company invested $400,000 in a technology that reduced the overall costs of production by reducing their cost per unit from $2 to $1.85. Later, a manager has an opportunity to outsource production to another company at a cost per unit of $1.75. If you are the manager, you a. should consider the $400,000 as a sunk cost, not relevant to the decision. b. should reduce his effort by ignoring any new developments and letting the production run as it is. c. should ignore the $400,000 fixed cost. d. Both A & C A consumer values a house at $525,000 and a producer values the same house at $485,000. If the transaction is completed at $510,000, what level of tax rate will result in unconsummated transaction? a. 2% b. 3% c. 1% d. 5% A bank can decrease the degree of moral hazard if it a. Monitors the borrowers behaviors b. Placing covenants on the loan c. Both of the above d. None of the above Which of the following is a primary market transaction? a. You sell 200 shares of Johnson & Johnson stock on the NYSE through your broker. b. You invest $10,000 in a mutual fund, which then uses the money to buy $10,000 of Johnson & Johnson shares on the NYSE. c. You buy 200 shares of Johnson & Johnson stock from your younger brother. You just give him cash and he gives you the stock&φραχ34;the trade is not made through a broker. d. One financial institution buys 200,000 shares of Johnson & Johnson stock from another institution. An investment banker arranges the transaction. e. Johnson & Johnson issues 2,000,000 shares of new stock and sells them to the public through an investment banker. Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common using reinvested earnings is 12.75%. The firm will not be issuing any new stock. You were hired as a consultant to help determine their cost of capital. What is its WACC? a. 9. 83% b. 8. 98% c. 9. 26% d. 10 .12% e. 9. 54% Which of the following statements is CORRECT? a. O ne disadvantage of operating as a corporation rather than as a partnership is that corporate shareholders are exposed to more personal liability than partners. b. St ockholders are generally more willing than bondholders to have managers invest in risky projects with high potential returns as opposed to safer projects with lower expected returns. c. B ondholders are generally more willing than stockholders to have managers invest in risky projects with high potential returns as opposed to safer projects with lower expected returns. d. Re lative to sole proprietorships, corporations generally face fewer regulations, which makes raising capital easier for corporations. e. Th ere is no good reason to expect a firm's bondholders and stockholders to react differently to the types of new asset investments a firm makes. Data for Atwill Corporation is shown below. Now Atwill acquires some risky assets that cause its beta to increase by 30%. In addition, expected inflation increases by 2.00%. What is the stock's new required rate of return? Initial beta 1.00 Initial required return (rs) 10.20% Market risk premium, RPM 6.00% Percentage increase in beta 30.00% Increase in inflation premium, IP 2.00% a. 17 .02% b. 14 .70% c. 16 .21% d. 14 .00% e. 15 .44% If you randomly select stocks and add them to your portfolio, which of the following statements best describes what you should expect? a. A dding more such stocks will reduce the portfolio's market risk but not its unsystematic risk. b. A dding more such stocks will have no effect on the portfolio's risk. c. A dding more such stocks will increase the portfolio's expected rate of return. d. A dding more such stocks will reduce the portfolio's beta coefficient and thus its systematic risk. e. A dding more such stocks will reduce the portfolio's unsystematic, or diversifiable, risk. Poder Inc. is considering a project that has the following cash flow data. What is the project's payback? Year 0 1 2 3 Cash flows −$750 $300 $325 $350 a. 2. 85 years b. 2. 36 years c. 2. 59 years d. 2. 12 years e. 1. 91 years Suppose United Bank offers to lend you $10,000 for one year at a nominal annual rate of 8.00%, but you must make interest payments at the end of each quarter and then pay off the $10,000 principal amount at the end of the year. What is the effective annual rate on the loan? a. 8. 45% b. 8. 88% c. 8. 66% d. 9. 10% e. 8. 24% A stock just paid a dividend of D 0 = $1.50. The required rate of return is r s = 10.1%, and the constant growth rate is g = 4.0%. What is the current stock price? a. $2 4.31 b. $2 5.57 c. $2 3.11 d. $2 3.70 e. $2 4.93 Which of the following statements is CORRECT? a. Th e beta of an "average stock," which is also "the market beta," can change over time, sometimes drastically. b. D uring a period when a company is undergoing a change such as increasing its use of leverage or taking on riskier projects, the calculated historical beta may be drastically different from the beta that will exist in the future. c. If a company with a high beta merges with a low-beta company, the best estimate of the new merged company's beta is 1.0. d. If a newly issued stock does not have a past history that can be used for calculating beta, then we should always estimate that its beta will turn out to be 1.0. This is especially true if the company finances with more debt than the average firm. e. Lo gically, it is easier to estimate the betas associated with capital budgeting projects than the betas associated with stocks, especially if the projects are closely associated with research and development activities. Money markets are markets for a. U.S. stocks. b. Consumer automobile loans. c. Short-term debt securities. d. Foreign stocks. e. Long-term bonds. Which of the following items is NOT included in current assets? a. In ventory. b. Sh ort-term, highly liquid, marketable securities. c. Ca sh. d. B onds. e. A ccounts receivable. Zacher Co.'s stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's required rate of return? a. 11 .95% b. 12 .25% c. 12 .55% d. 11 .65% e. 11 .36% What is the present value of the following cash flow stream at a rate of 12.0%? a. $1 1,849 b. $1 1,284 c. $1 0,747 d. $9 ,699 e. $1 0,210 Other things held constant, which of the following events is most likely to encourage a firm to increase the amount of debt in its capital structure? a. Th e costs that would be incurred in the event of bankruptcy increase. b. Its sales become less stable over time. c. M anagement believes that the firm's stock has become overvalued. d. Its degree of operating leverage increases. e. Th e corporate tax rate increases. In the real world, dividends a. te nd to be a lower percentage of earnings for mature firms. b. ar e usually changed every year to reflect earnings changes, and these changes are randomly higher or lower, depending on whether earnings increased or decreased. c. ar e usually more stable than earnings. d. ar e usually set as a fixed percentage of earnings, e.g., at 40% of earnings, so if EPS = $2.00, then DPS will equal $0.80. Once the percentage is set, then dividend policy is on "automatic pilot" and the actual dividend depends strictly on earnings. e. flu ctuate more widely than earnings. To increase productive capacity, a company is considering a proposed new plant. Which of the following statements is CORRECT? a. Si nce depreciation is a non-cash expense, the firm does not need to deal with depreciation when calculating the operating cash flows. b. W hen estimating the project's operating cash flows, it is important to include both opportunity costs and sunk costs, but the firm should ignore the cash flow effects of externalities since they are accounted for in the discounting process. c. Ca pital budgeting decisions should be based on before-tax cash flows. d. In calculating the project's operating cash flows, the firm should not deduct financing costs such as interest expense, because financing costs are accounted for by discounting at the cost of capital. If interest were deducted when estimating cash flows, this would, in effect, "double count" it. e. Th e cost of capital used to discount cash flows in a capital budgeting analysis should be calculated on a before-tax basis. When referring to the work of other authors, APA uses the title of their work. the first and last name of the author(s). the last name of the author(s) and date of publication. the last name of the author(s), date of publication, and title of journal. Which of the following statements is CORRECT? a. Only institutions, and not individuals, can participate in derivatives market transactions. b. The IPO market is a subset of the secondary market. c. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. d. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. e. As they are generally defined, money market transactions involve debt securities with maturities of less than one year. You want to purchase a motorcycle 4 years from now, and you plan to save $3,500 per year, beginning immediately. You will make 4 deposits in an account that pays 5.7% interest. Under these assumptions, how much will you have 4 years from today? a. $1 7,763 b. $1 6,112 c. $1 9,584 d. $1 8,652 e. $1 6,918 Which of the following rules is CORRECT for capital budgeting analysis? a. Su nk costs are not included in the annual cash flows, but they must be deducted from the PV of the project's other costs when reaching the accept/reject decision. b. O nly incremental cash flows, which are the cash flows that would result if a project is accepted, are relevant when making accept/reject decisions. c. Th e interest paid on funds borrowed to finance a project must be included in estimates of the project's cash flows. d. A proposed project's estimated net income as determined by the firm's accountants, using generally accepted accounting principles (GAAP), is discounted at the WACC, and if the PV of this income stream exceeds the project's cost, the project should be accepted. e. If a product is competitive with some of the firm's other products, this fact should be incorporated into the estimate of the relevant cash flows. However, if the new product is complementary to some of the firm's other products, this fact need not be reflected in the analysis. How much would Roderick have after 6 years if he has $500 now and leaves it invested at 5.5% with annual compounding? a. $6 54.95 b. $5 91.09 c. $6 89.42 d. $7 23.89 e. $6 22.20 Orwell Building Supplies' last dividend was $1.75. Its dividend growth rate is expected to be constant at 25% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (r s) is 12%. What is the best estimate of the current stock price? a. $4 4.80 b. $4 2.64 c. $4 1.58 d. $4 3.71 e. $4 5.92 Pettijohn Inc. The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2016 Cash and securities $ 1,554.0 Accounts receivable 9,660.0 Inventories 13,440.0 Total current assets $24,654.0 Net plant and equipment 17,346.0 Total assets $42,000.0 Liabilities and Equity Accounts payable $ 7,980.0 Notes payable 5,880.0 Accruals 4,620.0 Total current liabilities $18,480.0 Long-term bonds 10,920.0 Total liabilities $29,400.0 Common stock 3,360.0 Retained earnings 9,240.0 Total common equity $12,600.0 Total liabilities and equity $42,000.0 Income Statement (Millions of $) 2016 Net sales $58,800.0 Operating costs except depr'n $55,274.0 Depreciation $ 1,029.0 Earnings bef int and taxes (EBIT) $ 2,497.0 Less interest 1,050.0 Earnings before taxes (EBT) $ 1,447.0 Taxes $ 314.0 Net income $ 1,133.0 Other data: Shares outstanding (millions) 175.00 Common dividends $ 509.83 Int rate on notes payable & L-T bonds 6.25% Federal plus state income tax rate 21.7% Year-end stock price $77.69 Refer to the data for Pettijohn Inc. What is the firm's total assets turnover? a. 2. 02 b. 1. 12 c. 0. 90 d. 1. 68 e. 1. 40 Below is the common equity section (in millions) of Fethe Industries' last two yearend balance sheets: 2020 2019 Common stock $2,000 $1,000 Retained earnings 2,000 2,340 Total common equity $4,000 $3,340 The company has never paid a dividend to its common stockholders. Which of the following statements is CORRECT? a. Th e company issued common stock in 2020. b. Th e company has more equity than debt on its balance sheet. c. Th e company had positive net income in both 2019 and 2020, but the company's net income in 2019 was lower than it was in 2020. d. Th e company's net income in 2019 was higher than in 2020. e. Th e market price of the company's stock doubled in 2020. Partners Bank offers to lend you $50,000 at a nominal rate of 5.0%, simple interest, with interest paid quarterly. An offer to lend you the $50,000 also comes from Community Bank, but it will charge 6.0%, simple interest, with interest paid at the end of the year. What's the difference in the effective annual rates charged by the two banks? a. 1. 30% b. 0. 72% c. 1. 09% d. 0. 91% e. 1. 56% Which of the following statements is CORRECT? a. Th e potential exists for agency conflicts between stockholders and managers. b. Be cause most stock ownership is concentrated in the hands of a relatively small segment of society, firms' actions to maximize their stock prices have little benefit to society. c. C orporations and partnerships have an advantage over proprietorships because a sole proprietor is exposed to unlimited liability, but the liability of all investors in the other types of businesses is more limited. d. A good goal for a firm's management is maximization of expected EPS. e. M ost business in the U.S. is conducted by corporations, and corporations' popularity results primarily from their favorable tax treatment. Taylor Inc., the company you work for, is considering a new project whose data are shown below. What is the project's Year 1 cash flow? Sales revenues, each year $62,500 Depreciation $8,000 Other operating costs $25,000 Interest expense $8,000 Tax rate 25.0% a. $3 0,125 b. $3 3,213 c. $2 8,619 d. $3 1,631 e. $3 4,873 During the coming year, Gold & Gold wants to increase its free cash flow by $180 million, which should result in a higher stock price. The CFO has made these projections for the upcoming year: ∙ EBIT is projected to equal $852 million. ∙ Gross capital expenditures are expected to total to $360 million versus depreciation of $120 million, so its net capital expenditures should total $240 million. ∙ The tax rate is 25%. ∙ There will be no changes in cash or marketable securities, nor will there be any changes in notes payable or accruals. What increase in net working capital (in millions of dollars) would enable the firm to meet its target increase in FCF? a. $1 75 b. $2 19 c. $3 79 d. $2 63 e. $3 16 The preemptive right is important to shareholders because it a. wi ll result in higher dividends per share. b. all ows managers to buy additional shares below the current market price. c. is included in every corporate charter. d. pr otects the current shareholders against a dilution of their ownership interests. e. pr otects bondholders, and thus enables the firm to issue debt with a relatively low interest rate. John invested $12,000 in the stock of Hyper Cyber Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct? $1 25,000 is the opportunity cost of selling the shares today $1 2,000 is a sunk cost $2 50,000 is the opportunity cost $2 000 is the opportunity cost N one of the above A lump sum of $5,000 is invested at 10% per year for five years. The company's cost of capital is 8%. Which is true? Th e investment has a future value of $7,347 Th e investment has a future value of $8,053 Th e investment has a present value of $5,000 Th e investment has a net present value of $5,000 N one of the above Which is false of just-in-time (JIT) manufacturing systems? D emand pull means a closer relationship with the customer Th e power of suppliers is reduced W arehousing needs are reduced Af ter process re-engineering, time to complete the product is reduced N one of the above Which is not true of Total Quality Management (TQM)? T QM is focused on improving product and customer service quality T QM is expensive to initiate T QM requires top management support T QM requires ISO 9000 certification Al l of the above Identify all the correct statements: M anagers naturally seek to maximize shareholders' wealth M anagers act in their own interests, and so there is no way to align their interests with those of the owners To motivate managers in non-profit firms, no employee incentives are needed To align the interests of managers and owners, owners must design systems to monitor and reward management behavior that increases the firm's profits no ne of the above An internal accounting system should: pr ovide information to enable costs to be minimized pr ovide financial accounting data for external reporting purposes pr ovide management accounting information for decision-making pr ovide data for tax purposes all of the above Internal control systems: ar e the responsibility of the external auditor in clude anti-fraud measures ar e designed to allow financial misrepresentation re quire that one person perform all aspects of a task all of the above A sound allocation system should: be cheap and easy to administer pr ovide incentives for cost control ch arge in proportion to amount used or benefit received be perceived as equitable by those who are charged be all of the above Which of the following is true? Su ccessful firms have lower transaction costs than markets do A legal system that protects ownership rights is critical to the efficient functioning of firms and markets M arkets measure and reward performance M arkets allocate resources to their highest value use Al l of the above Which of the following is true? A free rider contributes to teamwork but does not receive pay M itigating the agency problem requires alignment of the interests of principal and agent Th e horizon problem describes agents who focus on the long-term A gency costs are an advertising expense N one of the above Furious Fred expects cash flows from an investment as follows: Yr 1 $3,000, Yr 2 $5,000, Yr 3 $8,000 Using an opportunity cost of capital of 5.6%, the present value is: $1 4,118 $1 4,523 $1 4,361 $1 4,909 no ne of the above Bertie's Burritos, a fast food enterprise, wants to understand his cost structure. He collected data, which appears below, to analyze costs using the high-low method. Month V olume To tal costs January 5, 000 $ 2, 700 February 7, 000 $ 3, 700 March 6, 000 $ 3, 400 Which is true? Es timated variable costs are 70 cents per burrito Fi xed costs cannot be estimated Es timated fixed costs are $200 To tal costs at volume of 8,000 are estimated at $4,200 c) and d) only Opportunity Costs: m ust never be negative m ay be found in financial statements (annual report) ref lect the benefit of the next best alternative ar e pecuniary in nature no ne of the above Economic Darwinism: ex plains why firms persist in inefficient behavior ex plains why some inefficient accounting practices persist ex plains why marmots eat bears ex plains why bears eat marmots no ne of the above Which of these is true? B udgeted fixed factory overheads = Budgeted overheads per unit × actual volume B udgeted fixed factory overheads = Budgeted overheads per unit × standard volume B udgeted factory overheads = Budgeted fixed overheads per unit × budgeted volume + actual variable overheads B udgeted factory overheads = Budgeted fixed overheads per unit × standard volume + budgeted variable overheads N one of the above Typical measures of quality include: pe rcentage of defects do llars spent on rework nu mber of on-time deliveries cu stomer satisfaction surveys all of the above Given the following division performance indicators, which is true? Di vision A B C Sales $ 50 0 Net profit $ 10 $ 20 Net assets $ 80 Return on sales 6. 0 % 4. 0 % Asset turnover 10 5 Return on assets 15 .0 % A' s return on assets is double that of B C is the best division at managing its assets A' s sales are 66.7% bigger than C's B would benefit least from a 10% increase in sales Al l of the above Cash of $12,000 will be received in year 6. Assuming an opportunity cost of capital of 7.2%, which of the following is true? Th e future value is $18,212 Th e present value is $7,996 Th e present value is $7,907 Pr ovide data for tax purposes N one of the above Which of these is true? B udgeted volume = Actual output × units allowed A ctual volume = Budgeted output × actual units allowed Ex pected volume = Standard volume St andard volume = Actual output × # cost driver units allowed N one of the above Which of the following is true? Pe ople in firms have equal knowledge E mployee empowerment increases when firms centralize key functions D ecision rights and knowledge must be separated to minimize agency costs Th eft by employees is an example of an agency cost N one of the above Which of the following is currently the test for determining whether conduct is or is not interstate commerce? a. dir ect and immediate effect test b. aff ectation doctrine c. re gulation of goods and not businesses d. no ne of the above What is required to establish a prima facie case for disparate treatment? a. pl aintiff must belong to a minority group b. pl aintiff must have been qualified for the job c. a minority was not hired d. a and b only e. a, b, and c In June 1985, Joseph Marcantuone and Robert Gieson purchased property located in East Orange, New Jersey. At the time of purchase, the property was partly occupied and leased to Carriage Trade Cleaners, a dry cleaning establishment. A number of dry cleaners continuously operated on this site since 1930. Marcantuone and Gieson owned and operated a grocery store on another section of the property. They have never personally owned or operated a dry cleaning establishment on the property. JRM, LLC, and Sang Hak Shin were tenants on the property and the last operators of the dry cleaning establishment that utilized the hazardous substance tetrachloroethylene, or perchloroethylene (PCE), during the time Marcantuone and Gieson owned the property. The city of East Orange acquired the property through condemnation for the purpose of building a school on the property. But, the PCE was discovered on the property and out of the $629,407 given to Marcantuone and Gieson as compensation for the taking, the city held back $182,035.20 for the cost of the PCE clean-up. It cost the city a total of $212,000 to complete the clean-up of the property. What is the process of evaluating property prior to purchase called? a. A n EIS b. D ue diligence c. N uisance abatement d. B AT or MACT Which of the following is not a consequence of poor ethical choices by a company? a. lo ss of reputation b. lo ss of earning power c. ad ditional regulation d. Al l of the above are consequences of poor ethical choices. Susan Sandren purchased a toaster from Standard Electric. While using the toaster the day after it was purchased, Susan discovered that the toaster slots were too small for a thick piece of bread. The bread was stuck in the slot. With the toaster still plugged in, Susan used a knife to pry loose the toast and was electrocuted. In a suit by her family against Standard Electric: a. Su san's family would win if there were no warnings about knives and electrocution. b. St andard will win because of misuse of the product. c. Su san's family will win because of a design defect. d. St andard will lose because the slots should have been made wider. Tristan Colbert owns an appliance store. He has ordered 10 Subzero refrigerators for his store at a cost of $2,500 each from Plains Manufacturing. Tristan ordered the refrigerators in anticipation of an order he was going to receive from a customhome builder. Plains Manufacturing experienced a flood at its plant in Iowa City and lost all goods in production. They were unable to deliver the refrigerators to Tristan and notified him immediately of the problem. Tristan has to purchase the 10 refrigerators from another plant at a cost of $3,000 each. Which of the following statements is correct about the situation? a. Plains can use the defense of impossibility. b. Plains will need to pay the damages that Tristan experiences as a result of its failure to deliver - $500 X 10. c. Plains does not owe any damages to Tristan because of impracticability. d. This contract is governed by common law principles of damages. The time limit for a defendant to file an answer is: a. 20 to 30 days in most states. b. tw o years for personal injury suits. c. fo ur years for contract suits. d. th e statute of limitations. How many U.S. Courts of Appeal are there? a. ni ne b. at least one for every state c. thi rteen d. no ne of the above Which of the following remedies are available to remedy environmental hazards? a. an EPA complaint b. pri vate citizen suit under federal environmental law c. su it for nuisance d. su it under state law e. Al l of the above are available remedies. John Forsyth is the head of the Securities Exchange Commission. There are new rules pending before the SEC that would require lawyers to blow the whistle on their clients. The American Bar Association, which is opposed to the legislation, has just offered Mr. Forsyth’s son a full scholarship to the law school of his choice. a. Th e in-kind contribution to his son is a violation of the law. b. A scholarship to Mr. Forsyth would be illegal, but not to his son. c. Th e ABA has not violated any law if there is no connection between the proposed rule and the scholarship. d. no ne of the above Appeals from federal administrative agency decisions go: a. to federal district court. b. to U.S. Court of Appeals. c. dir ectly to the U.S. Supreme Court. d. no ne of the above Which of the following is a requirement under Sarbanes-Oxley? a. Th e majority of the board of directors must be independent. b. N o inside officers can serve on the board of directors. c. La wyers must blow the whistle on their corporate clients engaged in fraud. d. all of the above People from the United States pledged $3.3 billion to support the rebuilding efforts in Haiti following the 2010 earthquake there. However, after 3 years, half of the money has not been dispersed, and nearly 500,000 people still live in tents. As a result, many who have made pledges have decided not to fulfill the remainder of their pledges because of the inaction on the part of the relief fund in getting the funds dispersed, the buildings rebuilt, and the housing constructed. What issue is there about whether there is a contractual obligation? a. Th e inability to enforce international contracts. b. W hether a pledge to make a gift is supported by consideration. c. W hether there can be a pledge across country borders. d. W hether the pledges were in writing. A hostile tender offer is made: a. to the board of the target company. b. to the shareholders of the target company. c. thr ough SEC communications to shareholders. d. no ne of the above Data barn litigation cases have used which of these legal theories? a. tre spass b. ba ttery c. nu isance d. a and c The state of Arizona has just passed a law requiring that oranges shipped into the state from growers located outside of the state meet certain minimum size requirements. The size requirements do not apply to oranges grown in Arizona. The new Arizona statute is: a. a permissible regulation of commerce. b. an impermissible regulation of interstate commerce. c. pe rmissible so long as the statute promotes the health and welfare of the state's residents. d. co nstitutional if there is a regulatory protest means available. Suppose A-Plus Linens sent the following notice to John C. Lincoln Hospital: "On your next call for bids, call us. We'll give you a $5 discount for every 100 pounds of linen we clean for you." The notice sent by A-Plus: a. is contract interference. b. is defamatory. c. is invasion of privacy. d. no ne of the above Cheong Choon Ng, the owner of Rainbow Loom, developed a rubber-band jewelry making kit that has a distinctive trade dress C-shaped clip that allows kids to connect loops of rubber bands to form bracelets. The looming technique in the kit dates back to the 1800s when the technique of looping knits was called Brunnian Links. Mr. Ng says he developed the C-Clip as he watched his daughters trying to make bracelets out of tiny rubber bands. After three years of enjoying a monopoly on a hot-selling craft item, Mr. Ng faced competition from FunLoom. Mr. Ng has filed suit against FunLoom for copying the C clip in its craft kit for the rubber band bracelets. Which of the following statements by the owner of FunLoom would be the best avenue for defense against the infringement suit by Rainbow Loom? a. “I s a loom something new and novel? It isn’t.” b. “ Our clip is larger.” c. “T his issue should be decided by competition, not the courts.” d. “It works the same, but it isn’t the same. It just looks like it.” The rights of land owners in eminent domain are protected by the: a. Fo urth Amendment. b. Fi fth Amendment. c. Fi rst Amendment. d. Fo urteenth Amendment. The Justice Department refused to approve a merger between office supplier Staples and office supplier Office Depot, a merger that would have given the two 70% of the office supply store market. Which of the following would be a valid reason for denying the approval for the merger? a. a market share of 50% from the combined companies b. that no new office suppliers would be able to enter the market c. that vertical mergers are per se violations d. both b and c Which of the following would be a reasonable accommodation required by the Americans with Disabilities Act? a. fle xible or part-time scheduling b. re assignment to a different job c. pr oviding readers and interpreters d. all of the above Which of the following is not an example of an enabling act? a. O ccupational Safety and Health Act b. Se curities Exchange Act of 1934 c. Fe deral Trade Commission Act d. G overnment in the Sunshine Act Territorial restrictions are: a. ill egal per se. b. qu estioned when there is no interbrand competition. c. th e same as tying sales. d. no ne of the above Mary Hahn is an associate dean in the College of Engineering at a major state university. With the resignation of the dean, Mary is perceived as a logical choice for interim dean while a search for a permanent replacement is made. The university president tells Hahn that in spite of her experience and qualifications, he will not appoint her as interim dean. He states that the business community supporters would not be ready to work with a woman in that position and their financial support is critical to the college and the university. The president's actions: a. do not violate Title VII because Mary is in a professional position. b. do not violate Title VII because those outside the university are responsible for the decision. c. vi olate Title VII. d. no ne of the above Shirley Raphart was using the crosswalk on a street near her office. The light was red, but Shirley stepped in to the crosswalk anyway because she was texting. Janice Godfrey, who was driving her car in the other direction, had a green light and did not see Shirley because she also was texting. Janice struck and injured Shirley, who was hospitalized. Shirley brought suit against Janice. Which of the following statements is true? a. Shirley can recover for Janice’s breach of duty because pedestrians always win over vehicles. b. Neither one can recover because they both breached their duties regarding safety. c. Janice has a defense of contributory negligence. d. Shirley has a defense of contributory negligence. Under CARD, colleges and universities must: a. di sclose financial relationships with the credit card companies. b. pr ovide debt counseling for students. c. li mit locations for student solicitation for credit cards. d. do all of these. Which of the following terminates apparent authority? a. fir ing an employee b. an employee quitting c. an employee retiring d. no ne of the above Contracts with illegal subject matter are: a. vo id. b. vo idable. c. ne ither a nor b What is the maximum civil penalty the Consumer Product Safety Commission can assess against a company for violations of the Consumer Product Safety Act? a. $2 ,000 b. $5 0,000 c. $5 00,000 d. no ne of the above [4:19 PM, 3/15/2020] Sayali More: Action Outfitters is a national manufacturer and retailer of outdoor gear. When it agrees to sell its merchandise to a retailer, the retailer must also agree to purchase Action’s outfits for clerks, its displays, its shopping bags, and its gift boxes. Action says that these items are part of its brand identification. A retail outlet has brought suit because it only wants the Action merchandise and does not want the outfits, displays, bags, or boxes. a. Th e suit is one for tying. b. Th ere is no cause of action here because manufacturers can dictate all the terms of sale and whether they will sell to a retailer. c. Th e suit is one for monopolization. d. no ne of the above [4:20 PM, 3/15/2020] Sayali More: Jane Stevenson was removed as head cheerleader from her high school cheer squad because she violated one of the school rules by drinking alcohol on the team bus as the team and cheer squad traveled to an away game. Jane feels she has an explanation and defense for what happened. Which of the Constitution might provide her with a review of her dismissal as head cheerleader? a. Fi rst Amendment b. Su bstantive due process c. St ates rights d. Pr ocedural due process Stamps.com offers at-home postage and mailing for a monthly fee. Customers are able to carry a balance on their accounts that allows them to mail packages and letters as long as there is a balance in their account. Stamps.com has a button on its program that carries this logo, “To purchase postage, click here.” Following that click, another window pops up that reads, “You are about to purchase postage. Once you click 'Okay' below, you cannot change this transaction." Why does Stamps.com have the second pop-up button? a. Th e pop-up button is simply a courtesy for its customers. b. Th e pop-up button is required under the UCC. c. Th e pop-up button is necessary to show acceptance of the terms. d. Th e pop-up button is required under common law. What is it called when officers of competing companies serve on each others’ boards of directors? a. Di agonal directorates b. Int ralocking directorates c. Cr oss-locking directorates d. Int erlocking directorates The European Union: a. is a trademark registration organization. b. eli minated tariff protections for its members in 1992. c. is an international court of justice. d. no ne of the above Under Sarbanes-Oxley, when must a company file an 8-K? a. an nually b. ev ery quarter c. wi thin two days of any changes listed in the statute d. on ly when selling stock State antitakeover statutes: a. ge nerally require additional filings beyond Williams Act requirements. b. ge nerally deal with corporate governance. c. ar e valid only against corporations formed after passage of the law. d. no ne of the above Mary Scott was hired to manage the Cactus Cart, a tiny kiosk located in Sky Harbor Airport in Phoenix. No specific duties were listed, but the business owner who hired Mary told her, "Just sell the plants and deposit the money." Mary would have the implied authority to: a. ta ke checks as payment. b. ch ange the business name. c. sel l the kiosk. d. all of the above The Money Laundering Control Act: a. ap plied only to financial institutions. b. pr ohibited concealing or disguising sources of funds. c. bo th a and b d. no ne of the above The U.S. Department of Defense (DOD) is bringing suits against several contractors in Iraq who are alleged to have paid kickbacks to military personnel in order to win contracts. The DOD wants portions of the contract prices paid refunded by the contractors. The DOD suits against the contractors: a. wi ll be heard in federal district court or the court of claims. b. wi ll be heard in the military courts of justice. c. wi ll be appellate level case trials. d. m ust be heard in the U.S. Supreme Court. Which of the following would you not find in the proceedings at the trial court level? a. en banc court b. jury c. tangible evidence d. witnesses