BUS 475 Final Exam Study Guide 2014 – Set 2
100 Answers from 2014 BUS/475 Final Exam
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1) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?A. $12,000B. $18,000C. $6,000 D. $28,000
2) Multinational corporations __________.A. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countriesB. are U.S. companies that sell goods and services in other countries C. are required to use international accounting standards D. are U.S. companies that trade their securities on the exchanges in other countries 3) Balance sheet accounts are considered to be __________.A. capital accounts B. nominal accounts C. temporary stockholders’ accounts D. permanent accounts4) What is value chain management best defined as?A. The incremental value of costs associated with hiring a new production floor leaderB. All activities associated with providing a product or service C. A large chain that keeps the machines from falling on the production floor D. Management decisions that affect how quickly the production run occurs5) The primary purpose of the statement of cash flows is to __________.A. provide information about the cash receipts and cash payments during a periodB. facilitate banking relationships C. provide information about the investing and financing activities during a periodD. prove that revenues exceed expenses if there is a net income6) In what situations will a static budget be most effective in evaluating a manager’s effectiveness?A. The planned activity levels match actual activity levels.B. The company has no fixed costs. C. The company has substantial fixed costs. D. The company has substantial variable costs.7) Which one of the following is a product cost?A. Sales person’s salariesB. Advertising costs C. Indirect labor D. Office salaries8) These are selected account balances on December 31, 2008. Land (location of the corporation’s office building) $100,000Land (held for future use) 150,000Corporate Office Building 600,000Inventory 200,000Equipment 450,000Office Furniture 100,000Accumulated Depreciation 300,000What is the net amount of property, plant, and equipment that will appear on the balance sheet?A. $1,600,000B. $950,000 C. $1,300,000D. $1,100,000 9) Of the following companies, which one would not likely employ the specific identification method for inventory costing?A. Antique shop B. Music store specializing in organ salesC. Hardware store D. Farm implement dealership10) If a company reports a net loss, it __________.A. will not be able to get a loan B. may still have a net increase in cash C. will not be able to make capital expendituresD. will not be able to pay cash dividends
11) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals: Income Statement Balance Sheet Dr. Cr. Dr. Cr.Totals $58,000 $48,000 $34,000 $44,000To enter the net income (or loss) for the period into the above worksheet requires an entry to the __________.A. income statement debit column and the income statement credit columnB. income statement credit column and the balance sheet debit column C. income statement debit column and the balance sheet credit column D. balance sheet debit column and the balance sheet credit column
12) The cost principle requires that when assets are acquired, they be recorded at __________.A. selling price B. appraisal value C. list price D. exchange price paid 13) Which one of the following items is not generally used in preparing a statement of cash flows?A. Current income statement B. Adjusted trial balance C. Additional information D. Comparative balance sheets 14) Managerial accounting __________.A. pertains to the entity as a whole and is highly aggregatedB. is concerned with costing products C. places emphasis on special-purpose information D. is governed by generally accepted accounting principles
15) A logical starting point from which the study of international trade begins is __________.A. the principle of absolute advantage B. the recognition that not all markets are competitive C. the principle of comparative advantage D. the recognition that government intervention in markets sometimes enhances the economic welfare of the society 16) Without trade, __________.A. a country can still benefit from international specialization B. a country is better off because it will have to learn to be self-sufficient without tradeC. interdependence is more extensive than it would be with trade D. a country’s production possibilities frontier is also its consumption possibilities frontier 17) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms’ production levels as given. Then in equilibrium the output effect __________.A. must balance with the price effect B. must dominate the price effect C. must be smaller than the price effect D. can be larger or smaller than the price effect 18) To move the allocation of resources closer to the social optimum, policymakers should typically try to induce firms in an oligopoly to __________.A. compete rather than cooperate with each otherB. collude with each other C. form various degrees of cartels D. cooperate rather than compete with each other19) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.A. equal to quantity supplied B. greater than quantity suppliedC. less than quantity supplied D. double the quantity supplied20) If a price ceiling is a binding constraint on the market, __________.A. sellers cannot sell all they want to sell at the price ceiling B. the equilibrium price must be below the price ceiling C. there is excess supply D. buyers cannot buy all they want to buy at the price ceiling21) A tax on an imported good is called a __________.A. supply taxB. quota C. tariff D. trade tax22) The political business cycle refers to __________.A. the part of the business cycle caused by the reluctance of politicians to smooth the business cycleB. the fact that about every four years some politician advocates greater government control of the FedC. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-electedD. changes in output created by the monetary rule the Fed must follow23) Real GDP __________.A. is not a valid measure of the economy’s performance, since prices change from year to year.B. evaluates current production at current prices. C. evaluates current production at the prices that prevailed in some specific year in the past.D. is a measure of the value of goods only; it excludes the value of services.24) The model of short-run economic fluctuations focuses on the price level and __________.A. the neutrality of moneyB. real GDP C. economic growth D. Net GDP25) In the market for foreign-currency exchange in the open economy macroeconomic model, the amount of net capital outflow represents the quantity of dollars __________.A. demanded for the purpose of buying U.S. net exports of goods and servicesB. supplied for the purpose of buying assets abroad C. supplied for the purpose of selling assets domestically D. demanded for the purpose of importing foreign goods and services26) The open-economy macroeconomic model examines the determination of __________.A. the output growth rate and the inflation rate B. unemployment and the exchange rate C. the output growth rate and the real interest rateD. the trade balance and the exchange rate27) The balance of payment account is made up of:A. an investment account and a consumption account. B. an import account and an export account. C. a current account and a financial and capital account.D. a monetary account and a fiscal account.28) To be competitive in a global economy, Europeans must increase their level of:A. Espionage activity B. Philanthropic contributionsC. Population density D. Productivity E. Financial subsidy 29) Which of these refers to the practices aimed at discovering and harnessing an organization’s intellectual resources?A. Innovation B. Competitiveness C. Collaboration D. Knowledge managementE. Effectiveness30) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by:A. Learning from the leader thereby avoiding the costs and risks of technology leadershipB. Mass-producing products that have an established market niche C. Making subtle changes to the product, thereby avoiding patent restrictions D. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materialsE. Technology followers are not successful at low-cost strategies31) The best way for an employer to find out if a potential employee can do a job is by __________.A. having them spend a day in the officeB. administering an IQ test C. using the interview process D. using a written test E. using a performance simulation test 32) A manager’s ability to stimulate people to be high performers is referred to as:A. Leading B. SupervisingC. Organizing D. Planning E. Controlling 33) One of the most important contributors to total quality management has been the introduction of statistical tools to analyze the causes of product defects in an approach called:A. ISO 9000 B. Organic C. Total quality integrationD. Six Sigma Quality E. Mechanistic34) The pursuit of lucrative opportunities by enterprising individuals is called:A. Business incubating B. Social experimentationC. Independence D. Intrapreneurship E. Entrepreneurship35) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:A. Diagnostic skills B. Conceptual C. Interpersonal/communication skillsD. Technical skills E. Professional skills36) Managers will utilize __________ skills with increasing frequency as they rise within an organization.A. Technical B. Professional C. Interpersonal and communicationD. Conceptual and decision E. Professional37) As related to managing of human resources, diversity refers to:A. Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)B. Differences in retention strategies (such as training, hiring, incentives, etc) C. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)D. Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)E. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.) 38) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:A. Selection B. Managerial ethicsC. Employment D. Diversity E. Recruiting39) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?A. Money should not be considered a start-up ingredient B. All entrepreneurs need venture capital in order to get startedC. Entrepreneurs are their own bosses and completely independentD. Anyone can start a business E. Successful entrepreneurs take very careful, calculated risks40) Which of these represent skills that managers need?A. Professional, technical and interpersonal & communication B. Interpersonal & communication, conceptual & decision making and professionalC. Interpersonal, quantitative, and professional D. Technical, interpersonal & communication and conceptual & decision makingE. Conceptual & decision making, professional and technical41) The basic components of an effective sexual harassment policy include the following EXCEPT:A. To establish a formal complaint procedure B. To develop an organization wide policy on sexual harassment C. To establish a means for ongoing training D. To establish a performance appraisal system E. To act immediately when employees complain of sexual harassment42) Which of the following statements is true?A. The sum of two mutually exclusive events is one. B. If event (A) occurs, then its complement (A’) will also occur. C. If A and B are independent events, the P(B) = P(A) P(B). D. The probability of A and its complement (A’) will always sum to one. 43) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.In a left-tailed test at = .05 we would __________.A. comfortably accept the claim B. switch to alpha of 0.01 for a more powerful test C. comfortably reject the claim D. feel uncomfortable with either decision (too close) 44) A poll showed that 48 out of 120 randomly chosen graduates of California medical schools last year intended to specialize in family practice. What is the width of a 90% confidence interval for the proportion that plan to specialize in family practice? A. ± .07357B. ± .08765C. ± .04472D. ± .00329 45) Use the following table to answer question: P(S | W) is approximately _____.A. .40B. .12C. .58D. .30 46) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.For this sample, which measure of central tendency is least representative of the “typical” student?A. Mode B. Mean C. MidrangeD. Median47) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value?A. .0708B. .0301C. .0874D. .4292 48) In lean systems, if a defective product is found, which of the following is generally NOT done?A. The defective unit is returned to the worker responsible for creating the defect.B. The production line is stopped. C. The defective unit is passed on to the next workstation. D. The production line is made aware of the problem without stopping the line. 49) A computer analysis reveals that the best-fitting trend model is Yt = 4.12 e 0.987 t. The trend was fitted using year-end common stock prices for Melodic Kortholt Outlet for the last six years. The R2 is 0.8571.Which conclusion is not correct?A. Few investments could match the astounding growth rate. B. The stock’s true intrinsic value is $4.12. C. At the end of year 3 the stock price would be nearly $80. D. The absolute annual growth (in dollars per share) is increasing. 50) In statistical process control a p-chart could __________.A. have more than one characteristics B. measure the fraction of conforming parts in a sampleC. measure the number of defects per sample unit D. use the student’s distribution51) Which one of the following statements concerning production and staffing plans is best?A. Production plans are based primarily on information from the master production plan.B. A staffing plan is the intermediate link between the business plan and the master production schedule.C. Aggregation can be performed along three dimensions: product families, labor, and time.D. A master production schedule is a projected statement of income, costs, and profits. 52) Which one of the following statements about managerial inputs to production and staffing plans is best?A. Marketing provides new product or service developments. B. Human resources provide the training capacity and labor-market conditions.C. Finance provides labor and machine standards. D. Materials provide the current staffing level.53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.A. digital, physical B. physical, financial C. digital, e-commerceD. physical, digital E. e-commerce, digital 54) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.A. globalization B. nationalization C. regionalization D. business environment 55) Which of the following statements is correct?A. An individual’s right to privacy supersedes the needs of society B. Advances in information technologies have not affected individual privacyC. It is difficult to determine and enforce privacy regulations D. The Internet has increased individuals’ privacy E. An individual’s right to privacy is absolute56) In the _____ phase of the decision making process, managers test potential solutions “on paper.”A. design B. intelligence C. choice D. consideration E. implementation 57) Which of the following is NOT an advantage of the buy option for acquiring IS applications?A. saves time B. saves money C. software can be tried out D. company will know what it is getting E. few types of off-the-shelf software are available, thus limiting confusion 58) Which of the following is not a reason that managers need IT support?A. Decisions are becoming more complex B. Decision makers are often in different locations C. Decisions must typically be made under time pressureD. Need to access remote information sources E. Number of alternatives are decreasing59) _____ is a process that helps organizations identify, select, organize, disseminate, transfer, and apply expertise that are part of the organization’s memory and typically reside inside the organization in an unstructured manner.A. Decision support B. Data mining C. Knowledge management D. Online analytical processingE. Discovery60) Information-based industries are most susceptible to which one of Porter’s five forces?A. threat of substitute products B. rivalry among existing firms in an industryC. bargaining power of customers D. bargaining power of suppliers61) _____ is the acquisition and efficient use of resources in accomplishing organizational goals.A. Strategic planning B. Wisdom C. Management controlD. Expertise E. Operational control62) _____ is the efficient and effective execution of specific tasks.A. Strategic planning B. Wisdom C. Management controlD. Expertise E. Operational control 63) Disadvantages of using current liabilities as opposed to long-term debt include:A. higher cash flow exposure B. certainty of interest costs C. uncertainty of future liabilities D. decreased risk of liquidity E. greater risk of illiquidity, and uncertainty of interest costs 64) Bondholders have a priority claim on assets ahead of:A. investors B. common and preferred stockholders.C. creditors. D. shareholders.65) Which of the following best represents operating income?A. Income from capital gains B. Income after financing activities C. Income from discontinued operationsD. Earnings before interest and taxes66) Which of the following is most consistent with the hedging principle in working capital management?A. Fixed assets should be financed with short-term notes payable. B. Inventory should be financed with preferred stock. C. Accounts receivable should be financed with short-term lines of credit.D. Borrow on a floating rate basis to finance investments in permanent assets. 67) PepsiCo calculates unlevered betas for each peer group in order to:A. eliminate judgment factors. B. eliminate different business risks. C. eliminate different financial risks.D. eliminate competitive factors.68) A stock with a beta greater than 1.0 has returns that are _____ volatile than the market, and a stock with a beta of less than 1.0 exhibits returns which are _____ volatile than those of the market portfolio.A. less, more B. more, moreC. less, less D. more, less69) The common stockholders are most concerned with:A. the risk of the investment. B. the percentage of profits retained. C. the spread between the return generated on new investments and the investor’s required rate of return.D. the size of the firm’s beginning earnings per share.70) An increase in future value can be caused by an increase in the __________.A. original amount invested B. annual interest rate and number of compounding periodsC. dividends paid D. rate of return E. starting value71) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)A. $900 B. $490 C. -$150D. $57072) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?A. 8.0% B. 36.13%C. 13.6% D. 12.5%73) Exchange rate risk:A. has been phased out due to recent international legislation. B. arises from the fact that the spot exchange rate on a future date is a random variable.C. applies only to certain types of domestic businesses. D. doesn’t affect trades made in US Dollars.74) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:A. a good buy. B. overvalued. C. undervalued.D. at equilibrium. 75) Which of the following best represents the stream of income that is available to common stockholders?A. Gross profit B. Net profit after tax and after preferred dividend payments C. Earnings before interest and taxes D. Operating profit76) The statement, “Of course people will buy our product–each of its features is better than the competition,” most closely reflects which consumer behavior concept?A. needs B. reference groups C. psychographics D. the economic-buyer theoryE. competitive advantage77) A firm’s “marketing mix” decision areas would NOT include:A. Price. B. People. C. Promotion.D. Place. E. Product.78) Clustering techniques applied to segmenting markets __________.A. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumersB. remove the need for managerial judgment C. usually require computers to group people based on data from market researchD. doesn’t apply to demographic data E. is time consuming and expensive79) The “four Ps” of a marketing mix are:A. Production, Personnel, Price, and Physical DistributionB. Promotion, Production, Price, and People C. Potential customers, Product, Price, and Personal SellingD. Product, Price, Promotion, and Profit E. Product, Place, Promotion, and Price80) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called:A. marketing strategy planning. B. marketing programming. C. management by objective. D. market planning. E. strategic (management) planning.
81) The economists’ view of buyers:A. assumes that they always buy the lowest-price alternative. B. is based on the idea that consumers value time and select the first alternative they learn about.C. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers.D. None of these are true E. emphasizes psychological variables rather than social influences.82) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.A. Market scanning B. Positioning C. Brand familiarity D. Customer relationship management (CRM)E. Market segmentation83) In comparison to the buying of final consumers, the purchasing of organizational buyers:A. leans basically toward economy, quality, and dependability.B. is even less predictable. C. is always based on competitive bids from multiple suppliers.D. is strictly economic and not at all emotional. E. is always emotional.84) Regarding organizational buying, the people who have the power to select or approve the supplier–especially for larger purchases–are called:A. buyers. B. gatekeepers.C. deciders. D. influencers. E. users.85) An Australian wine producer, facing declining sales at home, set up a new channel of distribution to sell wine in the United States. This seems to be an effort at:A. market penetration. B. product development.C. diversification. D. market development.E. stratification.86) The three basic tasks of ALL managers, according to the text, are:A. execution, feedback, and control. B. hiring, training, and compensating. C. marketing, production, and finance. D. planning, staffing, and evaluating. E. planning, implementation, and control. 87) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called:A. marketing strategy planning. B. strategic (management) planning.C. marketing programming. D. management by objective. E. market planning.88) Which of the following is correct about interpretive rules?A. They must be accompanied by substantive rules. B. All federal administrative agencies have implied power to make interpretive rules.C. They require public notice and participation to create. D. They do not establish new law. E. Interpretive rules are not subject to judicial review.89) To be guilty of monopolization, the defendant must:A. Must be part of a conspiracy, combination, or contract. B. Be a US company. C. Have been previously convicted. D. Possess monopoly power and have obtained the monopoly power by some improper act or be abusing the monopoly power.E. Have obtained the monopoly power from the government.90) The tort of intentional interference with contractual relations requires the following except:A. Third-party inducement to breach the contract. B. A new contract involving the third party who induced the breach.C. Third-party knowledge of this contract. D. A valid, enforceable contract between the contracting parties.91) The tort of palming off involves:A. Failing to credit another for that other person’s legal accomplishments. B. Representing one’s own goods to be those of a competitor. C. Making false statements about the goods of another. D. Knowingly selling goods that are defective. E. Blaming another for one’s own actions and communicating that blame to at least one other person. 92) Which of the following is correct about litigating commercial disputes?A. A few states have established specialized trial courts for commercial disputes.B. In all states, commercial disputes must be heard in a limited-jurisdiction court.C. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.D. Nearly all states have specialized trial courts that hear commercial disputes. E. Commercial disputes, because of their specialized nature, are first heard at the appellate court level. 93) An agent’s duty of notification can best be described as a duty to:A. Notify the principal about any material information that the agent learns relative to the subject matter of the agency.B. Notify the principle only if the principle if acting as an agent C. Notify the principal a reasonable period of time in advance of terminating the agency arrangement.D. Notify any third parties that the agent is acting as an agent. E. Notify any third parties as to the identity of the principal.94) Which of the following statements is true regarding the relationship of law and ethics?A. In some cases the law will require a higher standard of conduct than ethics, but never vice versa.B. Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.C. In some cases ethics will require a higher standard of conduct than the law, but never vice versa.D. The legal requirements will almost always be the same as the ethical requirement because the law is based on the ethical standards. 95) Which of the following is true about “proof of claims?”A. They are never used by secured creditors. B. They must be field by both secured and unsecured creditors in order for the creditor to receive a distribution from the bankruptcy estate.C. They need not be filed by secured creditors whose security covers the amount of their debt.D. They can generally be filed any time within one year of the filing of the bankruptcy petition. 96) An agent’s obligation to perform in accordance with the terms of the agency arrangement is the agent’s duty of:A. Indemnification.B. Obedience. C. Loyalty. D. Performance. E. Nonbreach.97) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?A. Stakeholder interest. B. Maximizing profits. C. Moral minimum. D. Corporate citizenship.E. Corporate social audit. 98) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?A. Mexico B. Japan C. Canada D. China E. Ecuador 99) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.A. Less than $1; about 25B. Less than $1; about 15 C. About $2; about 15 D. $2; about 25 E. Less than $1; about 40100) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States’ second largest trading partner.A. Mexico, Canada B. Canada, Venezuela C. Canada, Mexico D. Mexico, Venezuela E. Great Britain, Paraguay
BUS 475 Final Exam Study Guide 2014 – Set 2