BUS 475 : Final Exams (300+ MCQs) Latest Updated Test Bank, University of Phoenix.

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BUS/475 Sample Final Exam This Sample Final Exam is provided as a resource to help familiarize students with the content areas and types of questions that they may encounter when they complete the ... comprehensive BUS/475 Final Exam in Week Five. The student version of the sample Final does not include the correct answers (as marked below in red). Please feel free to share the sample final questions and answers with your students. 1. Which of the following is NOT an element of manufacturing overhead? a. 1 Factory employee’s salary b. 0 Depreciation on the factory c. 0 Plant manager’s salary d. 0 Factory repairperson’s wages 2. What accounts are NOT classified in the current assets section of the balance sheet? a. 0 Cash b. 1 Accounts payable c. 0 Security deposits d. 0 Inventory 3. The starting point of a master budget is the preparation of the a. 0 cash budget. b. 1 sales budget. c. 0 production budget. d. 0 budgeted balance sheet. 4. What amounts are not included in Gross Margin? a. 1 Operating expenses b. 0 Sales c. 0 Cost of goods sold d. 0 Commissions paid 5. At what rate is the income statement converted for US $ comparison? a. 0 Month end b. 0 First day of the month rate c. 1 Average rate d. 0 It is not appropriate to convert to US $ 6. Which list below best describes the major services performed by public accountants? a. 0 Bookkeeping, mergers, and budgets b. 0 Employee training, auditing, and bookkeeping c. 1 Auditing, taxation, management consulting d. 0 Cost accounting, production scheduling, recruiting 7. Jaime Inc. manufactures 2 products, sweaters and jackets. The company has estimated its overhead in the order-processing department to be $180,000. The company produces 50,000 sweaters and 80,000 jackets each year. Sweater production requires 25,000 machine hours, jacket production requires 50,000 machine hours. The company places raw materials orders 10 times per month, 2 times for raw materials for sweaters and the remainder for raw materials for jackets. How much of the order-processing overhead should be allocated to jackets? a. 0 $90,000 b. 0 $120,000 c. 0 $110,770 d. 1 $144,000 8. ABC Bread sells a box of bagels with a contribution margin of 62.5%. Its fixed costs are $150,000 per year. How much sales dollars does ABC Bread need to break-even per year if bagels are its only product? a. 0 $93,750 b. 0 $150,000 c. 1 $240,000 d. 0 $90,000 9. What exists when budgeted costs exceed actual results? a. 0 A budgeting error b. 1 A favorable difference c. 0 An unfavorable difference d. 0 An excess profit 10. Disclosures about inventory should include each of the following EXCEPT a. 0 The basis of accounting b. 0 The costing method c. 1 The quantity of inventory d. 0 The major inventory classifications 11. Which of the following is NOT a part of the accounting process? a. 0 Recording b. 0 Identifying c. 1 Financial decision making d. 0 Communicating 12. The cost principle is the basis for preparing financial statements because it is a. 0 a conservative value. b. 1 relevant and objectively measured, and verifiable. c. 0 an international accounting standard. d. 0 the most accurate measure of purchasing power. BUS/475 Sample Final Exam 1. Data is considered invalid when a. 0 it is outdated. b. 0 it is inconsistent. c. 0 it is unreliable. d. 1 it does not measure the intended concept. 2. Data is considered reliable when a. 0 the test measures what we actually want to measure. b. 0 it is quantitative. c. 1 the measurement process is accurate and precise. d. 0 it is qualitative. 3. When the reported data is different from the actual data, there is a a. 0 reporting error. b. 0 sampling error. c. 1 response error. d. 0 computation error. 4. When measures of central tendency are not affected by extremely low or extremely high values? a. 0 Mean and median b. 0 Mean and mode c. 1 Mode and median d. 0 Standard deviation and mean 5. What is the relationship among the mean, median, and mode in a symmetric distribution? a. 1 All equal b. 0 Mean is always the smallest value c. 0 Mean is always the largest value d. 0 Mode is the largest value 6. Suppose you want to show the changes in the unemployment rate in the United States during 2000–2008. The most appropriate chart you would use will be a a. 0 pareto chart. b. 1 line chart. c. 0 bar chart. d. 0 pie chart. e. 0 All are suitable 7. If two events are independent, the probability that both occur is a. 0 0. b. 0 0.50. c. 0 1.00. d. 1 The multiple of probabilities of the two events. 8. What will happen to the width of a confidence interval if the sample size is doubled, from 100 to 200? a. 0 It will increase. b. 1 It will decrease. c. 0 It will remain the same. d. 0 It will double. 9. The shape of the F distribution is a. 0 symmetric. b. 1 skewed right. c. 0 skewed left. d. 0 the same as the t distribution. 10. The French Enterprise wants to market its product, Learn French in 5-Days. It has chosen television and radio to market this product. A 1-minute television ad costs 30,000 and a 1-minute radio add costs 5,000. The French Enterprise must decide how many television ads should be purchased. What are the decision variables? a. 0 x1 = television channels and x2 = radio channels b. 0 x1 = number of French students and x2 = number of English students c. 0 x1 = 30,000 and x2= 5,000 d. 1 x1 = number of 1-minute television ads and x2= number 1-minute radio ads 11. Which of these statements is NOT true about CPM and PERT? a. 1 In a project, if the duration of the activities is known we use PERT, if the duration is not known we use CPM. b. 0 CPM and PERT have been used in scheduling construction projects. c. 0 The predecessors are a set of activities that must be completed before an activity. d. 0 CPM and PERT have been used in building ships. 12. Which of these costs are involved in Inventory Modeling? a. 0 Unit purchasing costs b. 0 Ordering and setup costs c. 0 Holding costs d. 1 All of these 13. Opportunities for improvement are often found in eliminating waste, which area often attributes to waste? a. 0 Overproduction b. 0 Transportation c. 0 Inventory d. 0 None of these e. 1 All of these 14. Which of these statements is false? a. 0 Simulation imitates the real-world operations as it evolves over time. b. 0 Simulation is straightforward and easier than analytical models. c. 0 Simulation optimization is a slow process. d. 1 None of these BUS/475 Sample Final Exam 1. The marketing management process is the process of a. 0 planning marketing activities. b. 0 implementing marketing plans. c. 0 controlling marketing plans. d. 0 All of these e. 0 None of these 2. Segmenting in international markets can be more challenging than segmenting in domestic markets because a. 0 there is less diversity in the key segmenting dimensions. b. 0 there is often more data available about key segmenting dimensions. c. 0 critical data is often less available and less dependable. d. 0 international laws are different than domestic laws. e. 0 None of these 3. A detailed customer database, containing past purchases and other segmenting information, is used to focus marketing efforts on individual customers in a a. 0 clustering management systems. b. 0 product positioning matrix. c. 0 product differentiation matrix. d. 0 diversification management system. e. 0 customer relationship management system. 4. Dell, Inc. was to offer customers televisions in addition to computers. This is a change in their __________________ strategy? a. 0 pricing b. 0 promotional c. 0 personnel d. 0 product e. 0 placement 5. Which of the following statements about world population is TRUE? a. 0 In general, countries that have higher stages of development experience faster rates of growth than less-developed countries. b. 0 The extent to which a country’s population is clustered around urban areas DOES NOT vary much from country to country. c. 0 People are moving from rural areas into more industrial and urban areas. d. 0 The trend toward urbanization has made companies less interested in international markets. e. 0 All of these 6. Which of the following is TRUE: a. 0 The product “P” in the marketing mix stands for only physical goods. b. 0 The product “P” in the marketing mix stands for both physical goods and services. c. 0 The product “P” in the marketing mix stands for only tangible merchandise. d. 0 The product “P” in the marketing mix stands for both physical goods and tangible merchandise. e. 0 The product “P” in the marketing mix stands for only services. 7. Habitat for Humanity is considered which type of organizational customer? a. 0 Producer b. 0 Middleman c. 0 Government d. 0 Non Profit e. 0 Independent 8. Which of the following statements regarding marketing’s influence on values is FALSE? a. 0 Many companies refuse to use ads that would be offensive to their target customers. b. 0 Marketing never elevates the wrong values. c. 0 Many companies work hard to determine their customers’ beliefs and values. d. 0 Marketing tends to reflect social values in the short run. e. 0 Marketing tends to reinforce and enhance social values in the long run. 9. When a company grows globally, this is an example of a. 0 market development. b. 0 product development. c. 0 diversification. d. 0 market penetration. e. 0 mass marketing. BUS/475 Sample Final Exam 1. The present value of the dollar a. 1 increases with lower interest rates and decreases with longer periods of time. b. 0 increases with higher interest rates and decreases with longer periods of time. c. 0 increases with longer periods of time and increases with shorter periods of time. d. 0 decreases with higher interest rate and increases with longer periods of time. 2. Which of the following is TRUE? a. 0 The payback period is the most superior of all the capital budgeting tools. b. 0 The only projected net income and not the projected net cash flow should be used in capital budgeting analyses. c. 0 Discounted payback does not take into account the time value of money in its calculations d. 1 If the calculated Net Present Value (NPV) equals $1, then the Internal Rate of Return (IRR) will equal the discount rate used in the NPV calculation 3. Your company, in a typical 30-day month, received 100 checks that total $90,000. These are delayed 6 days on average. What is the average daily float? a. 1 $18,000 b. 0 $5,400 c. 0 $1,800 d. 0 $15,000 4. A high current ratio suggests that the firm a. 0 has a small amount of long-term debt. b. 0 is carrying little inventory. c. 1 is able to meet its current obligations. d. 0 is profitable. e. 0 has a strong electrical system. 5. You want to find your target capital structure. Your company’s weighted average cost of capital is 12.5%. The cost of equity is 15% and the cost of debt is 8%. Given a tax rate of 35%, what is your target debt-equity ratio? a. 1 .34 b. 0 .68 c. 0 .17 d. 0 .25 6. You are the CFO for an all-equity type of firm that is considering the following projects: Project W: Beta = .70, Return = 11% Project X: Beta = .95, Return = 13% Project Y: Beta = 1.05, Return = 14% Project Z: Beta = 1.60, Return = 15% The T-bill rate equals 5% and the market expected rate of return equals 12%. Which projects should be accepted? a. 0 X, Y, and Z b. 1 W, X, and Y c. 0 W, Y, and Z d. 0 W, Y, and Z e. 0 None of these 7. Which one of the following is NOT true? a. 0 Bonds have many features that are spelled out in a document called the indenture. b. 0 Bonds are rated based on their default risk. Some bonds, like Treasury Bonds, have no risk of default; whereas junk bonds have significant default risk. c. 1 Bond values move in the direction of interest rates, leading to gains or losses for the investor. d. 0 When determining bond prices or yields, it is application of discounted cash flow concepts. 8. Common stockholders usually have the right a. 0 to vote for directors. b. 0 to share proportionally in dividends paid. c. 0 to vote on stockholder matters of great importance. d. 1 All of these 9. If the U.S. Dollar equivalency to the Euro is .8883, how many Euros could you get for $100? a. 0 88.83 b. 0 99.11 c. 1 112.57 d. 0 188.83 BUS/475 Sample Final Exam 1. Which of the following is NOT a classical approach to Management Thought? a. 0 Systematic management b. 0 Administrative management c. 0 Scientific management d. 1 Organizational behavior e. 0 Human relations 2. Which of the following are the four functions of management? a. 0 Organizing b. 0 Leading c. 0 Planning d. 0 Controlling e. 1 All of these 3. Teams are critical to today’s business environment. Which of the following is NOT critical to today’s business environment? a. 0 Parallel teams b. 0 Transnational teams c. 0 Virtual teams d. 1 Football teams e. 0 Management teams 4. Total Quality Management a. 0 only applies to operations. b. 1 supports customer satisfaction. c. 0 relies on short-term relationships. d. 0 is the same as Six Sigma. e. 0 is regulated by OSHA. 5. Leading people versus managing them is an important difference. Which of the following describes characteristics of leading? a. 1 Motivating for performance b. 0 Managerial control c. 0 Creating and managing change d. 0 Managing technology e. 0 Managing innovation 6. Managers need a certain skill set to be effective. Which of the following skill(s) do they need? a. 0 Technical skills b. 0 Conceptual and decision skills c. 0 Interpersonal and communication skills d. 0 None of these e. 1 All of these 7. Diversity in today’s workforce is an important factor. Which of the below is considered in the components of a diversified workforce? a. 0 Ethnicity b. 0 Religious affiliation c. 0 Gender d. 0 Age e. 1 All of these are important 8. Which of the following is NOT part of human resource planning? a. 0 Demand forecast b. 0 Internal labor supply c. 0 External labor supply d. 0 Job analysis e. 1 Product demand forecast 9. Strategic planning is based on strategic analysis. Identify which of the below best describes strategic planning: a. 0 Tactical planning b. 0 Operational planning c. 1 Long-term decisions about the entire organization d. 0 Financial planning e. 0 Short term decisions about the entire organization 10. Environmental factors a business needs to consider when planning are important to the success of the business. Which of the following is not considered an environmental factor in this context? a. 0 Competitors b. 0 Threat of entry c. 0 Substitutes d. 1 Endangered species e. 0 Customers 11. Globalization is a term we all use in business. Listed below are some terms; which of the following are entry modes for corporations to spread globally? a. 0 Licensing b. 0 Wholly owned subsidiaries c. 0 Joint ventures d. 0 Franchises e. 1 All of these 12. Entrepreneurs are an important part of the business environment. Which of the following is NOT a myth about entrepreneurs? a. 0 Anyone can start a business. b. 0 Entrepreneurs are their own business and completely independent. c. 1 Entrepreneurs are not gamblers. d. 0 If an entrepreneur is talented, success will happen in a year or two. e. 0 Any entrepreneur with a good idea can raise venture capital. BUS/475 Sample Final Exam 1. The modern business environment has all of the following characteristics EXCEPT a. 0 Global b. 0 Interconnected c. 0 Competitive d. 1 Relatively static e. 0 Real-time 2. ________________ issues involve collecting, storing, and disseminating information about individuals. a. 1 Privacy b. 0 Accuracy c. 0 Transferability d. 0 Property e. 0 Accessibility 3.. The introduction of ATM machines by Citibank is a classic example of which strategy for competitive advantage? a. 0 Cost leadership b. 1 Innovation c. 0 Differentiation d. 0 Operational effectiveness e. 0 Customer-orientation 4. Which of the following systems acquisition methods results in software that can be tried out, has been used for similar problems in other organizations, and can save time? a. 0 Systems development life cycle b. 0 Prototyping c. 0 End-user development d. 1 Buy option e. 0 Object-oriented development 5. The end result of the data life cycle is the generation of a. 0 information. b. 0 data. c. 1 knowledge. d. 0 wisdom. e. 0 decisions. 6. Many organizations have implemented corporate portals for which of the following reasons? a. 0 To cut costs b. 0 To free up time for busy managers c. 0 To improve profitability d. 0 To offer customers self-service opportunities e. 1 All of these 7. In the ____________ phase of the decision-making process, managers construct a model that simplifies the problem. a. 0 implementation b. 0 choice c. 1 design d. 0 intelligence e. 0 consideration 8. Which capability of digital dashboards enables users to obtain the latest data available on key performance indicators or some other metric, ideally in real time? a. 0 Drill down b. 0 Key performance indicators c. 1 Status access d. 0 Trend analysis e. 0 Exception reporting 9. To effectively manage by exception (that is use exception reports), the company must first create a. 1 performance standards. b. 0 best practices. c. 0 user information requirements. d. 0 a database. e. 0 employee evaluation guides. 10. Being an entrepreneur, disturbance handler, and negotiator is part of the ______________ managerial role. a. 0 interpersonal b. 0 entrepreneurial c. 0 informational d. 1 decisional e. 0 confrontational 11. Offering different products, services, or product features is which strategy for competitive advantage? a. 0 Cost leadership b. 1 Differentiation c. 0 Innovation d. 0 Operational effectiveness e. 0 Customer-orientation 12. ______________ attempts to find the value of the inputs necessary to achieve a desired level of output. a. 0 What-if analysis b. 0 Statistical analysis c. 0 Sensitivity analysis d. 1 Goal-seeking analysis e. 0 Simulation 13. Computer support is least for which of the following problems? a. 0 Semistructured and strategic planning b. 1 Unstructured and strategic planning c. 0 Semistructured and management control d. 0 Unstructured and operational control e. 0 Structured and strategic planning BUS/475 Sample Final Exam 1. For society, a good is not scarce if a. 0 at least one individual in society can obtain all he or she wants of the good. b. 0 firms are producing the good at full capacity. c. 1 all members of society can have all they want of the good if the good’s price was zero. d. 0 those who have enough income can buy all they want of the good. 2. The production possibilities frontier is a downward-sloping straight line when a. 1 it is possible to switch between one good and the other good at a constant opportunity cost. b. 0 there is no tradeoff involved in switching between one good and the other good. c. 0 the same amount of time is required to produce a unit of one good as is required to produce a unit of the other good. d. 0 the person for whom the frontier is drawn wishes to consume equal amounts of the two goods. 3. Trade among nations is ultimately based on a. 0 absolute advantage. b. 0 strategic advantage. c. 1 comparative advantage. d. 0 technical advantage. 4. When opening a restaurant you may need to buy ovens, freezers, tables, and cash registers. Economists call these expenditures: a. 1 Capital investment b. 0 Investment in human capital c. 0 Business consumption expenditures d. 0 None of these are correct 5. A legal minimum price at which a good can be sold is a. 0 exemplified by rent-control laws. b. 0 usually intended to enhance efficiency in a market. c. 0 called a price ceiling. d. 1 called a price floor. 6. To say that "people respond to incentives" is to say that a. 0 changes in costs (but not changes in benefits) influence people's decisions and their behavior. b. 0 changes in benefits (but not changes in costs) influence people's decisions and their behavior. c. 1 Changes in benefits or changes in costs influence people's decisions and their behavior. d. 0 tradeoffs can be eliminated by rational people who think at the margin. 7. The marginal product of labor can be defined as a. 0 change in profit/change in labor. b. 1 change in output/change in labor. c. 0 change in labor/change in output. d. 0 change in labor/change in total cost. 8. Monopolistically competitive firms are typically characterized by a. 1 many firms selling products that are similar, but not identical. b. 0 many firms selling identical products. c. 0 a few firms selling products that are similar, but not identical. d. 0 a few firms selling highly different products. 9. The prisoners' dilemma provides insights into the a. 1 difficulty of maintaining cooperation. b. 0 benefits of avoiding cooperation. c. 0 benefits of government ownership of monopoly. d. 0 ease with which oligopoly firms maintain high prices. 10. In a market economy, government intervention a. 0 will always improve market outcomes. b. 0 reduces efficiency in the presence of externalities. c. 1 may improve market outcomes in the presence of externalities. d. 0 is necessary to control individual greed. 11. Which of the following items is included in GDP? a. 0 The sale of stocks and bonds b. 0 The sale of used goods c. 1 The sale of services such as those performed by a doctor d. 0 All of these are included in GDP 12. Which of the following adjusts to bring aggregate supply and demand into balance? a. 1 The price level and real output b. 0 The real rate of interest and the money supply c. 0 Government expenditures and taxes d. 0 The saving rate and net exports 13. To decrease the money supply, the Fed could a. 0 sell government bonds. b. 0 increase the discount rate. c. 0 increase the reserve requirement. d. 1 All of these are correct 14. President George W. Bush and congress cut taxes and raised government expenditures in 2003. According to the aggregate supply and aggregate demand model a. 1 both the tax cut and the increase in government expenditures would tend to increase output. b. 0 only the tax cut would tend to increase output. c. 0 only the increase in government expenditures would tend to increase output. d. 0 neither the tax cut nor the increase in government expenditures would tend to increase output. 15. All else equal, which of the following would tend to cause real GDP per person to rise? a. 0 Changing policy from outward- to inward-oriented b. 1 Investment in human capital c. 0 In the short-term, effects of a rapid growth in the number of workers d. 0 All of these are correct 16. A trade policy is a government policy a. 0 directed toward the goal of improving the tradeoff between equity and efficiency. b. 1 that directly influences the quantity of goods and services that a country imports or exports. c. 0 intended to exploit the tradeoff between inflation and unemployment by altering the budget deficit. d. 0 toward trade unions. 17. If Kenya experienced capital flight, the supply of Kenyan schillings in the market for foreign-currency exchange would shift a. 0 left, which would make the real exchange rate of the Kenyan schilling appreciate. b. 0 left, which would make the real exchange rate of the Kenyan schilling depreciate. c. 0 right, which would make the real exchange rate of the Kenyan schilling appreciate. d. 1 right, which would make the real exchange rate of the Kenyan schilling depreciate. 18. The open-economy macroeconomic model examines the determination of a. 0 the output growth rate and the real interest rate. b. 0 unemployment and the exchange rate. c. 0 the output growth rate and the inflation rate. d. 1 the trade balance and the exchange rate. BUS/475 Sample Final Exam 1. Which of the following regarding the Commerce Clause of the U.S. Constitution is TRUE? a. 0 The Commerce Clause places federal responsibility for the judicial determination in the Commerce Department. b. 0 The Commerce Clause cannot regulate business when it occurs within a state. c. 1 The Commerce Clause can apply to a business that only does business in one state. d. 0 The Commerce Clause can regulate commerce, but not the transportation of goods. 2. Which of the following is NOT TRUE about alternative dispute resolution: a. 0 A mediator will assist the parties in trying to identify opportunities for resolution of the dispute. b. 0 In arbitration, the arbitrator will make a decision on the matter presented by the parties. c. 1 A mediator will resolve the dispute by making a decision if the parties are unable to do so. d. 0 Arbitration is final and binding in some but not all cases in which it is applied. 3. Which of the following can the Environmental Protection Agency do? a. 0 Establish permissible levels of particulates in the air. b. 0 Determine how testing will be done at industrial sites. c. 0 Levy fines on businesses that are in violation of the permissible level of particulates. d. 1 The EPA can do all of these things. 4. While on the way from the office to a client’s business to deliver computer software, an employee of Acme Data Systems accidentally runs into another car, injuring the driver. Is Acme Data Systems liable to pay the damages of this accident if the driver is found liable? a. 0 No, because driving to the site is an incidental duty that does not arise out of the work. b. 0 No, because the driver is required to have insurance as a condition to drive any vehicle and have a driver’s license. c. 1 Yes, if it is determined that the driver is liable for the accident. d. 0 Yes, but only if it is determined that the accident with the fault of the business, not the driver. 5. Can a corporate CEO legally refuse to answer a question that will incriminate the corporation? a. 0 Yes, under the 5th Amendment as applied by the 6th Amendment. b. 0 Yes, but only under the 5th Amendment to the U.S. Constitution. c. 1 No, because a corporation does not have the Constitutional right to avoid self-incrimination. d. 0 No, because the court can compel testimony of anyone, but the answer is inadmissible evidence. 6. Chris works Monday through Friday at her job, as a nonexempt worker. Chris was required to work 10 hours on both Monday and Tuesday, and then worked 8 hours on both Wednesday and Thursday. On Friday, Chris worked 4 hours, then went home. How much overtime is Chris entitled to for the week, under provisions of the Fair Labor Standards Act? a. 0 Chris is entitled to 4 hours of overtime. b. 0 Chris is entitled to 4 hours of overtime IF Chris was sent home, but not overtime if Chris voluntarily went home on Friday. c. 0 Chris is entitles to 16 hours of overtime, because Chris worked more than 8 hours on both Monday and Tuesday. d. 1 Chris is entitled to NO overtime. 7. Mary, who lives openly as a lesbian, was discharged from her position, and evidence establishes that she was discharged because she is homosexual. Which is true regarding Mary’s rights under Federal anti-discrimination laws? a. 0 Assuming the evidence established that she was discharges for being a lesbian, she can recover damages from her employer. b. 0 If Mary can prove that the supervisor who discharges her was biased against homosexuals, she can get her job back. c. 1 Mary does not have a legal remedy because discrimination against homosexuals is not illegal under federal law. d. 0 None of these is correct. 8. Which of the following is an example of horizontal price fixing? a. 0 A car dealer and the manufacturer agree that the actual sales price of the car will never be below $30,000. b. 0 A gas station owner and the supplier of gasoline set the price of gas based on the strike price of crude oil. c. 1 The four Toyota dealers in the metro area agree on a “floor” on priced for the Prius, without informing the regional office. d. 0 The four Toyota dealers in a metro area agree that they will not be open on Sundays. 9. State lemon laws are designed to protect consumers who have purchased a. 0 fruits and vegetables. b. 1 new cars. c. 0 used motorcycles. d. 0 all consumer products. 10. Does the Foreign Corrupt Practices Act (FCPA) permit grease payments to lower-level foreign officials to speed up the clearance of imported goods? a. 1 Yes, as long as there is no attempt to influence government policy, but only to speed up the processes. b. 0 Yes, so long as there is an attempt to influence government policy, which is permitted under the FCPA. c. 0 No, unless the payment was been approved by the State Department under the FILO provisions of the DUBI Act. d. 0 No, not under any circumstances. 11. Why is insider trading prohibited by the Securities Exchange Act? a. 0 To prohibit sales fraud by the unscrupulous traders b. 1 To prevent people with non-public information from having an advantage c. 0 To avoid discrimination against people who work outdoors, rather than in offices d. 0 To assure that people who subscribe to financial newsletters do not have an unfair advantage 12. Mary took good care of her grandfather for many years. As he lay dying, he said, “Because you have provided me with so much great care in the past, I am giving you my house when I die. He does not change the title on his house or take any other steps to transfer ownership. Which of the following is true? a. 0 Mary will get the house because shoe did not provide valuable consideration to her grandfather before he promised her the house. b. 0 Mary will get the house because even though there is no contract, the acts of her grandfather constitute promissory estoppel. c. 1 Mary will NOT get the house because there is no valid contract with her grandfather. She did not provide valid consideration. d. 0 Mary will NOT get the house because her grandfather’s contract became void when he died. 13. Jack and Jill are partners in a water transport business. While Jack is out of town, Jill fails to purify the water the partnership sold to a restaurant, and many customers became ill. The restaurant sued Jack and Jill for $20,000. Can Jack be held liable for Jill's mistake? a. 0 Yes, Jack is fully liable for judgments against the partnership. b. 0 No, because Jack was not present when the error occurred. c. 1 Yes, if Jack is a general partner. d. 0 Yes, if both Jack and Jill are general partners. 14. Andy is an employee of Packing Corp. While he does not have the authority to obligate Packing Corp. to contracts, his office, his behavior and his comments on the job—all known by Packing Corp.—make it appear that he does have authority to enter into contracts on behalf of Packing. If he does enter into a contract, is Packing obligated by his statements? a. 0 No, because he does NOT have actual authority. b. 0 No, because he was the only one who performed the behavior that would reasonably lead a third party to conclude that he is an agent of Packing. c. 1 Yes, if it is definite that Packing allowed Andy to appear to be an agent of Packing. d. 0 Yes, because he is an employee of Packing. 15. Bob wrote a screenplay, but before he could register it with the U.S. Copyright Office, the screenplay was stolen and later appeared in a movie. Will Bob prevail if he sues the person claiming ownership of the play? a. 0 No, because he never registered the screenplay. b. 0 No, because he cannot prove that he was the author of the screenplay. c. 1 Yes, if it can be proved that Bob is the true owner of the screenplay. d. 0 Yes, but only if Bob has another copy of the screenplay. 16. In determining which course of action to select in a matter, Rogero decides that he will do what creates the greatest good for the greatest number of people. Which theory of ethics is Rogero applying? a. 1 Utilitarianism b. 0 Polytheism c. 0 The Golden Rule d. 0 Deontological theory 17. Which of these parties are considered when decisions are made utilizing stakeholder ethical theory? a. 0 Shareholders b. 0 Customers c. 0 Employees d. 1 All of these are considered then using stakeholder theory BUS 475 Integrated Business Topics Final Exam # 1 1) A well-designed activity-based costing system starts with __________. A. analyzing the activities performed to manufacture a product B. assigning manufacturing overhead costs for each activity cost pool to products C. computing the activity-based overhead rate D. identifying the activity-cost pools 2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________. A. have been approved for use by the managements of business firms B. have been approved by the Internal Revenue Service C. have substantial authoritative support D. are proven theories of accounting 3) 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 $44,000 To enter the net income (or loss) for the period into the above worksheet requires an entry to the __________. A. income statement credit column and the balance sheet debit column B. income statement debit column and the balance sheet credit column C. income statement debit column and the income statement credit column D. balance sheet debit column and the balance sheet credit column 4) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $150,000 Land (held for future use) 225,000 Corporate Office Building 900,000 Inventory 300,000 Equipment 675,000 Office Furniture 150,000 Accumulated Depreciation 450,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,425,000 B. $1,950,000 C. $2,400,000 D. $1,650,000 5) The first step in activity-based costing is to __________. A. identify the cost driver that has a strong correlation to the activity cost pool B. assign manufacturing overhead costs for each activity cost pool to products C. identify and classify the major activities involved in the manufacture of specific products D. compute the activity-based overhead rate per cost driver 6) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point? A. 2,133 units B. 4,600 units C. 6,200 units D. $25,600 7) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March? A. $8,250 B. $5,250 C. $750 D. $4,500 8) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 Corporate Office Building 600,000 Inventory 200,000 Equipment 450,000 Office Furniture 100,000 Accumulated Depreciation 300,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $950,000 B. $1,300,000 C. $1,600,000 D. $1,100,000 9) 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$44,000 Closing entries are necessary for __________. A. permanent or real accounts only B. permanent accounts only C. both permanent and temporary accounts D. temporary accounts only 10) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead? A. The western division’s vice president’s salary B. Factory janitor C. Cost of landscaping the corporate office D. General corporate liability insurance 11) The cost of an asset and its fair market value are __________. A. the same on the date of acquisition B. never the same C. the same when the asset is sold D. irrelevant when the asset is used by the business in its operations 12) One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers? A. $90,000 B. $150,000 C. $60,000 D. $75,000 13) The cost principle is the basis for preparing financial statements because it is __________. A. the most accurate measure of purchasing power B. a conservative value C. relevant and objectively measured, and verifiable D. an international accounting standard 14) Which one of the following items is not generally used in preparing a statement of cash flows? A. Additional information B. Adjusted trial balance C. Comparative balance sheets D. Current income statement 15) To move the allocation of resources closer to the social optimum, policymakers should typically try to induce firms in an oligopoly to __________. A. cooperate rather than compete with each other B. collude with each other C. form various degrees of cartels D. compete rather than cooperate with each other 16) 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. can be larger or smaller than the price effect B. must dominate the price effect C. must be smaller than the price effect D. must balance with the price effect 17) The price of a good that prevails in a world market is called the A. world price. B. absolute price. C. relative price. D. comparative price. 18) A country's consumption possibilities frontier can be outside its production possibilities frontier if __________. A. the country imports more than it exports B. the country’s technology is superior to the technologies of other countries C. the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries D. the country engages in trade 19) 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. double the quantity supplied B. less than quantity supplied C. greater than quantity supplied D. equal to quantity supplied 20) If a binding price ceiling were imposed in the computer market, __________. A. the quality of computers would increase B. the supply of computers would decrease C. the demand for computers would increase D. a shortage of computers would develop 21) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________. A. plus the cost of tuition, equals the opportunity cost of going to college B. should be counted only to the extent that they are more expensive at college than elsewhere C. should be counted in full, regardless of the costs of eating and sleeping elsewhere D. usually exceed the opportunity cost of going to college 22) 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 importing foreign goods and services B. supplied for the purpose of buying assets abroad C. supplied for the purpose of selling assets domestically D. demanded for the purpose of buying U.S. net exports of goods and services 23) The part of the balance of payments account that records the amount of foreign currency the government buys or sells is the: A. balance of trade. B. financial and capital account. C. current account. D. government financial account. 24) The balance of payment account is made up of: A. a monetary account and a fiscal account. B. an import account and an export account. C. a current account and a financial and capital account. D. an investment account and a consumption account. 25) The model of aggregate demand and aggregate supply explains the relationship between __________. A. real GDP and the price level B. unemployment and output C. the price and quantity of a particular good D. wages and employment 26) The open-economy macroeconomic model includes __________. A. neither the market for loanable funds or the market for foreign-currency exchange B. only the market for foreign-currency exchange C. only the market for loanable funds D. both the market for loanable funds and the market for foreign-currency exchange 27) The principal lag for monetary policy __________. A. is the time it takes for policy to change spending. The principal lag for fiscal policy is the time it takes to implement it B. is the time it takes to implement policy. The principal lag for fiscal policy is the time it takes for policy to change spending C. and fiscal policy is the time it takes for policy to change spending D. and fiscal policy is the time it takes to implement policy 28) Which of the following best describes a mental image of a possible and desirable future state of the organization? A. Horizontal communication B. Vertical communication C. Vision D. Mission E. Leadership 29) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a: A. Parallel team B. Project team C. Working group D. Work team E. Project group 30) An invisible barrier that makes it difficult for certain groups, such as minorities and women, to move beyond a certain level in the organizational hierarchy is referred to as the: A. Glass floor B. Job enlargement concept C. Glass ceiling D. Black box theory E. Job enrichment theory 31) 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. Managerial ethics B. Recruiting C. Employment D. Diversity E. Selection 32) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity? A. behavioral assessment B. aptitude tests C. integrity evaluations D. intelligence tests E. work sampling 33) To be competitive in a global economy, Europeans must increase their level of: A. Financial subsidy B. Philanthropic contributions C. Productivity D. Population density E. Espionage activity 34) Teams that operate separately from the regular work structure and exist temporarily are known as: A. Transnational teams B. Management teams C. Self-managed teams D. Self-designing teams E. Parallel teams 35) A manager's ability to stimulate people to be high performers is referred to as: A. Supervising B. Planning C. Controlling D. Leading E. Organizing 36) The best way for an employer to find out if a potential employee can do a job is by __________. A. using a performance simulation test B. using the interview process C. administering an IQ test D. having them spend a day in the office E. using a written test 37) 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. All entrepreneurs need venture capital in order to get started B. Anyone can start a business C. Successful entrepreneurs take very careful, calculated risks D. Money should not be considered a start-up ingredient E. Entrepreneurs are their own bosses and completely independent 38) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States. A. Less than $1; about 40 B. Less than $1; about 15 C. $2; about 25 D. Less than $1; about 25 E. About $2; about 15 39) 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. Organic B. Six Sigma Quality C. Mechanistic D. ISO 9000 E. Total quality integration 40) __________ is the process of working with people and resources to accomplish organizational goals. A. Supervising B. Planning C. Decision making D. Controlling E. Management 41) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of: A. Staffing B. Planning C. Organizing D. Controlling E. Goal Coordination 42) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income. Assuming b1 is significant, if Income decreases by 1000 we would predict that Crime will __________. A. increase by 428 B. decrease by 50 C. increase by 500 D. increase by 50 43) Sampling error can be reduced by __________. A. none of the these affect sampling error B. increasing the sample size C. decreasing the sample size D. utilizing simple random samples 44) Use the following table to answer question: P(M A) is approximately _____. A. .25 B. .125 C. .625 D. .50 45) Use the following table to answer question: Are Service provider and county independent events? A. Insufficient information to determine B. Yes C. No 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. Midrange B. Mean C. Median D. Mode 47) Jolly Blue Giant Health Insurance (JBGHI) is concerned about rising lab test costs and would like to know what proportion of the positive lab tests for prostate cancer are actually proven correct through subsequent biopsy. JBGHI demands a sample large enough to ensure an error of ± 2% with 90% confidence. What is the necessary sample size? A. 2,401 B. 609 C. 1,604 D. 1,692 48) Which one of the following statements concerning production and staffing plans is best? A. The impact of production and staffing plans cuts across several functional areas of the firm. B. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated. C. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another. D. When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time. 49) Likely reasons for inaccurate control limits would include which of the following? A. Process variation was not zero, as expected. B. The engineers were underpaid for their work. C. The engineering parameter for variance is unknown. D. There was insufficient preliminary sampling. 50) The one-worker, multiple machines approach functions as: A. a way to create uniform workstation loads. B. a production bottleneck. C. a one-person production line. D. a poka-yoke device. 51) In an activity-on-node [AON] network, the nodes represent ____________, whereas the arcs represent ____________. A. precedence relationships; time B. activities; precedence relationships C. activities; time D. events; activities 52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that: A. you would lose $80 if one of your workers missed an entire 8 hour shift. B. you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock. C. the next worker that offers to work an extra 8 hours should receive at least $80. D. you would be willing pay up to $60 for someone to work another 6 hours. 53) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could deploy. A. None of these B. Globalization 2.0 C. Globalization 1.0 D. Globalization 3.0 54) In the _____ phase of the decision making process, managers test potential solutions “on paper.” A. consideration B. design C. choice D. intelligence E. implementation 55) A set of programs that enable the hardware to process data is _____. A. procedures B. database C. software D. network E. hardware 56) What is _____ is not necessarily _____. A. Ethical, legal B. Unethical, illegal C. Ethical, illegal D. Unethical, legal E. Illegal, unethical 57) The Global, Web-Based Platform enables individuals to do which of the following? A. all of these are true B. produce and sell goods and services C. exchange knowledge D. access information, services, and entertainment E. connect, compute, communicate, collaborate, and compete everywhere and all the time 58) The management cockpit best exemplifies which type of system? A. Group decision support system B. Functional area information system C. Digital dashboard D. Expert system E. Decision support system 59) _____ is the acquisition and efficient use of resources in accomplishing organizational goals. A. Wisdom B. Expertise C. Strategic planning D. Management control E. Operational control 60) International Game Technology’s new ERP system produced all of the following benefits except: A. Operations employees were able to access manufacturing process details at their workstations B. The company gained flexibility in manufacturing products C. ERP system connected the company’s global operations D. Company was able to maintain its original business processes E. Integrated the company’s business functions 61) Which of the following are not provided by digital dashboards? A. Exception reporting B. Key performance indicators C. Status access D. Transaction processing E. Drill down 62) _____ provides users with a view of what is happening, where _____ addresses why it is happening. A. Multidimensional data analysis, data mining B. Multidimensional data analysis, neural networks C. Data mining, expert system D. Data mining, multidimensional data analysis E. Multidimensional data analysis, structured query language 63) An increase in future value can be caused by an increase in the __________. A. dividends paid B. rate of return C. original amount invested D. starting value E. annual interest rate and number of compounding periods 64) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows: Cost of debt 8% Cost of preferred stock 12% Cost of common stock 16% Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project? A. $1,568 B. $463 C. $1,241 D. $871 65) Disadvantages of using current liabilities as opposed to long-term debt include: A. certainty of interest costs B. greater risk of illiquidity, and uncertainty of interest costs C. decreased risk of liquidity D. uncertainty of future liabilities E. higher cash flow exposure 66) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock? A. 15.62% B. 20.62% C. 14.37% D. 9.37% 67) Dublin International Corporation’s marginal tax rate is 40%. It can issue three-year bonds with a coupon rate of 8.5% and par value of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $23 per bond in flotation costs. Determine the approximate after-tax cost of debt for Dublin International to use in a capital budgeting analysis. A. 9.2% B. 5.1% C. 8.5% D. 6.0% 68) Forward rates are quoted: A. on financial statements B. in direct form and at a premium or discount C. by the FDIC D. in an indirect form E. daily 69) Tri State Pickle Company preferred stock pays a perpetual annual dividend of 2 1/2% of its par value. Par value of TSP preferred stock is $100 per share. If investors’ required rate of return on this stock is 15%, what is the value of per share? A. $6.00 B. $37.50 C. $16.67 D. $15.00 70) Suppose you determine that the NPV of a project is $1,525,855. What does that mean? A. The project’s IRR would have to be less that the firm’s discount rate. B. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000. C. Under all conditions, the project’s payback would be less than the profitability index. D. The project would add value to the firm. 71) According to the hedging principle, permanent assets should be financed with _____ liabilities. A. fixed B. permanent C. current D. spontaneous 72) Exchange rate risk: A. doesn’t affect trades made in US Dollars. 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. has been phased out due to recent international legislation. 73) The common stockholders are most concerned with: A. the spread between the return generated on new investments and the investor’s required rate of return. B. the percentage of profits retained. C. the size of the firm’s beginning earnings per share. D. the risk of the investment. 74) 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. 75) You hold a portfolio with the following securities: Security Percent of Portfolio Beta Return X Corporation 20% 1.35 14% Y Corporation 35% .95 10% Z Corporation 45% .75 8% Compute the expected return and beta for the portfolio. A. 9.9%, .94 B. 10.67%, 1.02 C. 9.9%, 1.02 D. 34.4%, .94 76) Economists' economic-buyer theory assumes that __________. A. consumers only want the cheapest price B. buyers logically compare choices in order to maximize their satisfaction C. demographic data are very useful for predicting consumer behavior D. consumers should purchase only low-priced products E. consumers always make rational decisions 77) 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. the economic-buyer theory B. reference groups C. psychographics D. needs E. competitive advantage 78) The three basic tasks of ALL managers, according to the text, are: A. planning, implementation, and control. B. marketing, production, and finance. C. planning, staffing, and evaluating. D. execution, feedback, and control. E. hiring, training, and compensating. 79) A cluster analysis of the "toothpaste market" would probably show that: A. most consumers are concerned about cost. B. most consumers are mainly concerned about brightness of teeth. C. the broad product-market can be served effectively with one marketing mix. D. factors such as taste, price, and "sex appeal" are not important. E. different market segments seek different product benefits. 80) "Marketing strategy planning" means: A. selecting a target market and developing a marketing strategy. B. finding attractive opportunities and selecting a target market. C. finding attractive opportunities and developing profitable marketing strategies. D. selecting an attractive target market. E. selecting an attractive marketing mix. 81) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called: A. market planning. B. marketing strategy planning. C. marketing programming. D. management by objective. E. strategic (management) planning. 82) Regarding organizational buying, the people who have the power to select or approve the supplier--especially for larger purchases--are called: A. users. B. buyers. C. deciders. D. influencers. E. gatekeepers. 83) The economists' view of buyers: A. None of these are true B. assumes that they always buy the lowest-price alternative. C. is based on the idea that consumers value time and select the first alternative they learn about. D. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers. E. emphasizes psychological variables rather than social influences. 84) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market. A. Customer relationship management (CRM) B. Market scanning C. Positioning D. Brand familiarity E. Market segmentation 85) When evaluating macro-marketing: A. one must consider the society’s role in the marketing system. B. one must determine how efficiently the society's resources are used. C. the best approach is to consider the profit generated by individual firms within the overall system. D. the evaluation is necessarily subjective. E. one must consider each individual firm's role in the marketing system. 86) Marketing: A. not important if you have a good product. B. reflects existing social values in the short run--while reinforcing these values in the long run. C. turns consumers into puppets. D. creates materialistic values which did not exist before. E. is only propaganda. 87) Clustering techniques applied to segmenting markets __________. A. doesn’t apply to demographic data B. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers C. remove the need for managerial judgment D. usually require computers to group people based on data from market research E. is time consuming and expensive 88) Product disparagement differs from defamation of a nonpublic figure in that: A. Intent is only required in a disparagement case. B. Publication to a third party is required in the defamation case, but not in the disparagement case. C. Publication to a third party is required in the disparagement case, but not in the defamation case. D. Intent is required for the disparagement case, but not in the defamation case. E. Intent is required for the defamation case, but not in the disparagement case. 89) Mary arrived at work one day, and her boss said to her, “That’s the ugliest dress I have ever seen. Because you wore that to work today, you are fired.” Assuming that Mary is an at-will employee, which of the following is true? A. Mary can be fired only if it is in the best interest of the employer. B. If none of the exceptions to the at-will rule apply, Mary can be fired. C. If Mary has the will to work, she cannot be fired without cause. D. Mary can be fired for any reason. 90) Which of the following is correct about interpretive rules? A. Interpretive rules are not subject to judicial review. B. All federal administrative agencies have implied power to make interpretive rules. C. They must be accompanied by substantive rules. D. They do not establish new law. E. They require public notice and participation to create. 91) In responding to a constitutional challenge to the Computer Decency Act, the U.S. Supreme Court ruled that: A. The Internet was similar to television and that restrictions similar to those on television programming were appropriate. B. The Act was unconstitutional because its provisions were too vague to define. C. Obscene materials could not be available between 6:00 a.m. and 10:00 p.m. local time. D. Computers and the Internet were not covered by the free speech provisions of the U.S. Constitution because they did not exist when the Constitution was drafted. E. The Act was constitutional because obscene speech receives no protection. 92) In a criminal proceeding, what is the difference between an indictment and an information? A. An indictment requires proof beyond a reasonable doubt, but an information does not. B. A grand jury issues an indictment, but does not issue an information. C. Guilt or innocence is determined in an indictment, but not in an information. D. The defendant is charged with a crime in an indictment, but not in an information. 93) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman? A. Corporate social audit. B. Corporate citizenship. C. Stakeholder interest. D. Maximizing profits. E. Moral minimum. 94) If a minor wishes to be bound to a contract after becoming an adult, she must: A. Bring an action to verify the contract. B. Give back the goods or services received as a minor. C. Disaffirm the contract. D. Ratify the contract. 95) Which of the following statements is true regarding the relationship of law and ethics? A. Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands. B. The legal requirements will almost always be the same as the ethical requirement because the law is based on the ethical standards. C. In some cases ethics will require a higher standard of conduct than the law, but never vice versa. D. In some cases the law will require a higher standard of conduct than ethics, but never vice versa. 96) Information which comes to the knowledge of an agent is: A. Will result in termination of the agency arrangement if it is not communicated to the principal. B. Required to be communicated to the principal in all circumstances. C. Is imputed to the principal. D. Can be disclosed to the principal only with the third party’s consent. 97) Which of the following is true about “proof of claims?” A. They can generally be filed any time within one year of the filing of the bankruptcy petition. 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 are never used by secured creditors. 98) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner. A. Great Britain, Paraguay B. Canada, Venezuela C. Canada, Mexico D. Mexico, Canada E. Mexico, Venezuela 99) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Ecuador B. Japan C. Canada D. Mexico E. China 100) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States. A. Less than $1; about 40 B. Less than $1; about 15 C. About $2; about 15 D. Less than $1; about 25 E. $2; about 25 1) What is the preparation of reports for each level of responsibility in the company’s organization chart called? A. Responsibility reporting B. Static reporting C. Exception reporting D. Master budgeting analysis 2) 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 $44,000 To enter the net income (or loss) for the period into the above worksheet requires an entry to the __________. A. income statement credit column and the balance sheet debit column B. income statement debit column and the balance sheet credit column C. income statement debit column and the income statement credit column D. balance sheet debit column and the balance sheet credit column 3) Managerial accounting __________. A. is governed by generally accepted accounting principles B. is concerned with costing products C. pertains to the entity as a whole and is highly aggregated D. places emphasis on special-purpose information 4) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $150,000 Land (held for future use) 225,000 Corporate Office Building 900,000 Inventory 300,000 Equipment 675,000 Office Furniture 150,000 Accumulated Depreciation 450,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,650,000 B. $2,400,000 C. $1,950,000 D. $1,425,000 5) 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. $28,000 B. $12,000 C. $18,000 D. $6,000 6) 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 $44,000 The net income (or loss) for the period is __________. A. $10,000 income B. $10,000 loss C. $48,000 income D. not determinable 7) The cost of an asset and its fair market value are __________. A. the same when the asset is sold B. irrelevant when the asset is used by the business in its operations C. never the same D. the same on the date of acquisition 8) 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 $44,000 Closing entries are necessary for __________. A. temporary accounts only B. both permanent and temporary accounts C. permanent accounts only D. permanent or real accounts only 9) Which list below best describes the major services performed by public accountants? A. Employee training, auditing, bookkeeping B. Auditing, taxation, management consulting C. Bookkeeping, mergers, budgets D. Cost accounting, production scheduling, recruiting 10) The first step in activity-based costing is to __________. A. compute the activity-based overhead rate per cost driver B. identify the cost driver that has a strong correlation to the activity cost pool C. assign manufacturing overhead costs for each activity cost pool to products D. identify and classify the major activities involved in the manufacture of specific products 11) The standards and rules that are recognized as a general guide for financial reporting are called __________. A. generally accepted accounting principles B. standards of financial reporting C. generally accepted accounting standards D. operating guidelines 12) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March? A. $4,500 B. $8,250 C. $5,250 D. $750 13) Of the following companies, which one would not likely employ the specific identification method for inventory costing? A. Farm implement dealership B. Hardware store C. Music store specializing in organ sales D. Antique shop 14) The major reporting standard for management accounts is __________. A. the Sarbanes-Oxley Act of 2002 B. generally accepted accounting principles C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management D. relevance to decisions 15) In computing GDP, market prices are used to value final goods and services because __________. A. market prices do not change much over time, so it is easy to make comparisons between years B. Market prices are not used in computing GDP C. market prices reflect the values of goods and services D. if market prices are out of line with how people value goods, the government sets price ceilings and price floors 16) When a firm sells a good or a service, the sale contributes to the nation’s income __________. A. only if the buyer of the good or service is a household or another firm B. We have to know whether the item being sold is a good or a service in order to answer the question C. only if the buyer of the good or service is a household D. whether the buyer of the good or a service is a household, another firm, or the government 17) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________. A. imperfectly competitive markets B. incomplete markets C. oligopoly markets D. monopolistically competitive markets 18) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________. A. should be counted only to the extent that they are more expensive at college than elsewhere B. should be counted in full, regardless of the costs of eating and sleeping elsewhere C. usually exceed the opportunity cost of going to college D. plus the cost of tuition, equals the opportunity cost of going to college 19) A rational decision maker __________. A. ignores the likely effects of government policies when he or she makes choices B. ignores marginal changes and focuses instead on “the big picture” C. takes an action only if the marginal benefit of that action exceeds the marginal cost of that action D. takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions 20) To move the allocation of resources closer to the social optimum, policymakers should typically try to induce firms in an oligopoly to __________. A. form various degrees of cartels B. collude with each other C. compete rather than cooperate with each other D. cooperate rather than compete with each other 21) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________. A. the value to Maurice of Options A, C and D combined B. the value to Maurice of the option he would have chosen had Option B not been available C. $100 D. $300 22) 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. supplied for the purpose of buying assets abroad B. supplied for the purpose of selling assets domestically C. demanded for the purpose of buying U.S. net exports of goods and services D. demanded for the purpose of importing foreign goods and services 23) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated? A. Item (1) is included in the consumption component, while item (2) is included in the investment component. B. Item (1) is included in the investment component, while item (2) is included in the consumption component. C. Only item (2) is included in GDP and it is included in the investment component. D. Both item (1) and item (2) are included in the consumption component of GDP. 24) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________. A. the monetary policy reaction lag B. the time inconsistency of policy C. the sacrifice ratio dilemma D. inflation targeting 25) In the open-economy macroeconomic model, other things the same, a decrease in the interest rate shifts __________. A. the demand for dollars in the market for foreign-currency exchange to the left B. the supply of dollars in the market for foreign-currency exchange to the right C. the supply of dollars in the market for foreign-currency exchange to the left D. the demand for dollars in the market for foreign-currency exchange to the right 26) In general, the longest lag for __________. A. both fiscal and monetary policy is the time it takes for policy to affect aggregate demand B. monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand C. fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand D. both fiscal and monetary policy is the time it takes to change policy 27) Real GDP __________. A. evaluates current production at the prices that prevailed in some specific year in the past. B. is not a valid measure of the economy's performance, since prices change from year to year. C. is a measure of the value of goods only; it excludes the value of services. D. evaluates current production at current prices. 28) Having individuals actually do the job they are applying for as a test to see if they can do it is __________. A. an informal means of screening candidates B. a formal means of screening candidates C. an approach with high reliability D. an approach with low reliability E. an approach with high face validity 29) Building a dynamic organization is another way of describing which function of management? A. Leading B. Staffing C. Controlling D. Planning E. Organizing 30) To be competitive in a global economy, Europeans must increase their level of: A. Espionage activity B. Financial subsidy C. Philanthropic contributions D. Population density E. Productivity 31) 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 ethics C. Recruiting D. Diversity E. Employment 32) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a: A. Project group B. Parallel team C. Project team D. Work team E. Working group 33) An invisible barrier that makes it difficult for certain groups, such as minorities and women, to move beyond a certain level in the organizational hierarchy is referred to as the: A. Job enrichment theory B. Glass floor C. Job enlargement concept D. Black box theory E. Glass ceiling 34) 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. Anyone can start a business C. All entrepreneurs need venture capital in order to get started D. Successful entrepreneurs take very careful, calculated risks E. Entrepreneurs are their own bosses and completely independent 35) Teams that work on long-term projects but disband once the work is completed are known as: A. Traditional work groups B. Parallel teams C. Transnational teams D. Project and development teams E. Management teams 36) The most dominant areas in the global economy include: A. North America, South America and Western Europe B. North America, Western Europe and Asia C. Western Europe, Asia and Africa D. North America, Asia and Africa E. North America, Mexico and Asia 37) 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 employee benefit plans (such as pensions, insurance, vacations, memberships, etc.) C. Differences in retention strategies (such as training, hiring, incentives, etc) D. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.) E. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.) 38) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity? A. work sampling B. intelligence tests C. behavioral assessment D. aptitude tests E. integrity evaluations 39) Managers will utilize __________ skills with increasing frequency as they rise within an organization. A. Technical B. Conceptual and decision C. Professional D. Professional E. Interpersonal and communication 40) The pursuit of lucrative opportunities by enterprising individuals is called: A. Business incubating B. Intrapreneurship C. Social experimentation D. Entrepreneurship E. Independence 41) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n): A. Small business B. Large corporation C. Online Business D. Multinational corporation E. Entrepreneurship venture 42) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value? A. .0708 B. .0874 C. .4292 D. .0301 43) 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, the median is _____. A. 3 B. 3.5 C. 2 D. 2.5 44) In a random sample of 810 women employees, it is found that 81 would prefer working for a female boss. The width of the 95% confidence interval for the proportion of women who prefer a female boss is _____. A. ± .0105 B. ± .0196 C. ± .0288 D. ± .0207 45) To estimate the average annual expenses of students on books and class materials a sample of size 36 is taken. The average is $850 and the standard deviation is $54. A 99% confidence interval for the population mean is __________. A. $832.36 to $867.64 B. $826.82 to $873.18 C. $823.72 to $876.28 D. $825.48 to $874.52 46) Use the following table to answer question: P(S | W) is approximately _____. A. .40 B. .30 C. .58 D. .12 47) Use the following table to answer question: Are Service provider and county independent events? A. No B. Insufficient information to determine C. Yes 48) In a network diagram, an activity: A. should always be something the company has had experience with. B. must always have a single, precise estimate for the time duration. C. is the largest unit of work effort consuming both time and resources that a project manager can schedule and control. D. is the smallest unit of work effort consuming both time and resources that a project manager can schedule and control. 49) 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 master production schedule is a projected statement of income, costs, and profits. C. Aggregation can be performed along three dimensions: product families, labor, and time. D. A staffing plan is the intermediate link between the business plan and the master production schedule. 50) Which one of the following statements concerning production and staffing plans is best? A. When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time. B. The impact of production and staffing plans cuts across several functional areas of the firm. C. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated. D. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another. 51) 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. Materials provide the current staffing level. C. Finance provides labor and machine standards. D. Human resources provide the training capacity and labor-market conditions. 52) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE? A. The expected duration of this project is 25 days. B. The expected duration of this project is 25 + 15 + 20 = 60 days. C. A–D–C is the critical path. D. A–B–C has the most slack. 53) When your purchases are swiped over the bar-code reader at the point-of-sale terminals at Wal-Mart, a _____ records the data. A. enterprise resource planning system B. transaction processing system C. functional area information system D. office automation system E. dashboard 54) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information. A. globalization B. regionalization C. nationalization D. business environment 55) Search engines and metasearch engines are examples of which network application? A. Web services B. Discovery C. Communications D. Local Area Network E. Collaboration 56) Which of the following are disadvantages of the buy option for acquiring IS applications? A. software may not integrate with existing systems B. software may not exactly meet the company’s needs C. software may be impossible to modify D. all of the these are disadvantages E. company will not have control over software improvements 57) Networks enable which of the following applications? A. Web services B. Discovery C. Communications D. All of the these E. Collaboration 58) Geocoding is __________. A. integrating organizational transactions with spatially oriented databases B. integrating maps with spatially oriented databases and other databases C. encrypting spatial information D. programming spatially oriented databases E. accessing geographical information 59) _____ is the efficient and effective execution of specific tasks. A. Expertise B. Management control C. Operational control D. Strategic planning E. Wisdom 60) Computer support is greatest for which of the following problems? A. Semistructured and management control B. Unstructured and operational control C. Semistructured and strategic planning D. Structured and operational control E. Structured and management control 61) Credit card companies would most likely use which of the following to check for fraudulent credit card use? A. Data mining B. Expert systems C. Neural networks D. Multidimensional data analysis E. Structured query languag 62) The end result of the Data Life Cycle is the generation of _____. A. wisdom B. data C. information D. knowledge E. decisions 63) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock? A. 14.37% B. 9.37% C. 20.62% D. 15.62% 64) You hold a portfolio with the following securities: Security Percent of Portfolio Beta Return X Corporation 20% 1.35 14% Y Corporation 35% .95 10% Z Corporation 45% .75 8% Compute the expected return and beta for the portfolio. A. 34.4%, .94 B. 9.9%, 1.02 C. 10.67%, 1.02 D. 9.9%, .94 65) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period? A. Income statement B. Cash flow statement C. Balance sheet D. Quarterly statement 66) The common stockholders are most concerned with: A. the risk of the investment. B. the size of the firm’s beginning earnings per share. C. the percentage of profits retained. D. the spread between the return generated on new investments and the investor’s required rate of return. 67) At 8% compounded annually, how long will it take $750 to double? A. 12 years B. 9 years C. 6.5 years D. 48 months 68) Tri State Pickle Company preferred stock pays a perpetual annual dividend of 2 1/2% of its par value. Par value of TSP preferred stock is $100 per share. If investors’ required rate of return on this stock is 15%, what is the value of per share? A. $6.00 B. $16.67 C. $37.50 D. $15.00 69) 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. -$150 B. $900 C. $490 D. $570 70) Which of the following best represents operating income? A. Income from discontinued operations B. Income from capital gains C. Income after financing activities D. Earnings before interest and taxes 71) Exchange rate risk: A. doesn’t affect trades made in US Dollars. B. has been phased out due to recent international legislation. C. arises from the fact that the spot exchange rate on a future date is a random variable. D. applies only to certain types of domestic businesses. 72) Disadvantages of using current liabilities as opposed to long-term debt include: A. decreased risk of liquidity B. certainty of interest costs C. uncertainty of future liabilities D. higher cash flow exposure E. greater risk of illiquidity, and uncertainty of interest costs 73) An increase in future value can be caused by an increase in the __________. A. dividends paid B. annual interest rate and number of compounding periods C. original amount invested D. starting value E. rate of return 74) PepsiCo calculates unlevered betas for each peer group in order to: A. eliminate different financial risks. B. eliminate different business risks. C. eliminate judgment factors. D. eliminate competitive factors. 75) Bondholders have a priority claim on assets ahead of: A. creditors. B. common and preferred stockholders. C. investors D. shareholders. 76) When doing "positioning," a marketing manager should: A. exclusively use focus groups. B. avoid targeting strategies. C. rely on how customers think about proposed and/or existing brands in a market. D. focus on specific product features of all generic competitors. E. plan physical product changes rather than image changes. 77) "Positioning": A. eliminates the need for judgment in strategy planning. B. applies to new products--but not existing products. C. is concerned with obtaining the best shelf space in retail outlets. D. helps strategy planners see how customers view competitors' offerings. E. is useful for combining but not for segmenting. 78) The three basic tasks of ALL managers, according to the text, are: A. planning, implementation, and control. B. planning, staffing, and evaluating. C. execution, feedback, and control. D. marketing, production, and finance. E. hiring, training, and compensating. 79) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that: A. Other countries most likely don’t use the US Dollar as their primary currency. B. GDP estimates may not be very accurate for very different cultures and economies. C. GDP measures show the degree of competition in a market. D. income tends to be evenly distributed among consumers in most countries. E. GDP measures show people's tendency to buy particular products. 80) In comparison to the buying of final consumers, the purchasing of organizational buyers: A. is always emotional. B. leans basically toward economy, quality, and dependability. C. is even less predictable. D. is always based on competitive bids from multiple suppliers. E. is strictly economic and not at all emotional. 81) Coca-Cola is taking advantage of the new willingness of Chinese leaders to engage in international trade by marketing its soft drinks in China. What type of opportunity is Coke pursuing? A. test marketing B. product development C. market penetration D. diversification E. market development 82) The economists' view of buyers: A. None of these are true B. assumes that they always buy the lowest-price alternative. C. emphasizes psychological variables rather than social influences. D. is based on the idea that consumers value time and select the first alternative they learn about. E. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers. 83) Economists' economic-buyer theory assumes that __________. A. consumers only want the cheapest price B. consumers should purchase only low-priced products C. consumers always make rational decisions D. buyers logically compare choices in order to maximize their satisfaction E. demographic data are very useful for predicting consumer behavior 84) Which of the following is a business or organizational customer? A. All of these are business and organizational customers. B. a wholesaler. C. a government agency. D. a retailer. E. producers of goods or services. 85) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called: A. market planning. B. strategic (management) planning. C. marketing strategy planning. D. management by objective. E. marketing programming. 86) Good marketing strategy planners know that: A. target markets cannot be large and spread out. B. the terms "mass marketing" and "mass marketer" mean basically the same thing. C. mass marketing is often very desirable and effective. D. firms like Nabisco and Wal-Mart are too large to aim at clearly defined target markets. E. target marketing does not limit one to small market segments. 87) 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. stratification. B. product development. C. market penetration. D. market development. E. diversification. 88) In which of the following are these steps of a criminal case listed in the correct order? A. Arrest, indictment, trial, arraignment B. Arrest, arraignment, indictment, trial C. Indictment, arraignment, arrest, trial D. Arraignment, arrest, trial, indictment E. Arrest, indictment, arraignment, trial 89) In responding to a constitutional challenge to the Computer Decency Act, the U.S. Supreme Court ruled that: A. The Internet was similar to television and that restrictions similar to those on television programming were appropriate. B. The Act was unconstitutional because its provisions were too vague to define. C. Obscene materials could not be available between 6:00 a.m. and 10:00 p.m. local time. D. Computers and the Internet were not covered by the free speech provisions of the U.S. Constitution because they did not exist when the Constitution was drafted. E. The Act was constitutional because obscene speech receives no protection. 90) Justin was hired in February of 2004 as a salesperson. There is no written employment contract, and Justin is paid on a commission basis. Justin’s manager has said to Justin on several occasions that if Justin continues to meet his sales quotas, that the company “will keep him around for a long time.” Justin has always met his sales quotas, but is told one day that they have decided to replace him because he does not project the image that the company wants. If Justin is an at-will employee, which of the following is true? A. The employer would not be able to fire Justin on the basis of public policy. B. The statements by the manager could likely give Justin contract rights that could amount to an exception to the at-will doctrine. C. The employer can terminate Justin only if the employer would suffer a loss by not terminating him. D. As an at will employee, there are no restrictions on the employer terminating Justin. E. Because there is no written employment contract, the employer can terminate Justin. 91) Which of the following is correct about litigating commercial disputes? A. In all states, commercial disputes must be heard in a limited-jurisdiction court. B. Nearly all states have specialized trial courts that hear commercial disputes. 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. A few states have established specialized trial courts for commercial disputes. E. Commercial disputes, because of their specialized nature, are first heard at the appellate court level. 92) Bob, an employee of Risky Manufacturing, Inc. is accidentally injured by a fellow worker while working his shift. Under workers’ compensation, Bob can: A. Recover from workers’ compensation only if Risky was negligent in allowing the injury to occur. B. Sue Risky or seek workers’ compensation recovery, but not both. C. Seek workers’ compensation only. D. Sue Risky or seek workers’ compensation recovery. 93) Information which comes to the knowledge of an agent is: A. Will result in termination of the agency arrangement if it is not communicated to the principal. B. Required to be communicated to the principal in all circumstances. C. Can be disclosed to the principal only with the third party’s consent. D. Is imputed to the principal. 94) What is the major convention that provides international protection to patents? A. The Digital Millennium Treaty. B. The Berne Convention of 1786. C. The Paris Convention. D. The General Agreement on Tariffs and Trade (GATT). 95) Which of the following is correct about the states’ powers regarding foreign affairs? A. Because of the sharing of powers between the federal government and the states, states have powers over foreign affairs equal to the powers of the federal government. B. The states have no power over foreign affairs because the U.S. Constitution grants that power exclusively to the federal government. C. The states can pass laws so long as they do not unduly burden foreign commerce, but the states have no authority to enter into treaties with foreign nations. D. The states can pass laws affecting foreign commerce and enter into treaties with foreign nations so long as they first obtain the consent of the Senate. E. The states can pass laws and enter into treaties with foreign nations so long as they do not unduly burden foreign commerce. 96) The Houston-based energy company that filed for Chapter 11 bankruptcy and whose business conduct is one of the grossest examples of corporate greed and fraud in America was: A. Mobil Oil Company. B. Shell Oil Company. C. Enron Corporation. D. Houston Oil and Gas Corporation. E. Exxon Corporation. 97) Generally, which of the following statements relating to contractual capacity is correct? A. Persons with full competence make enforceable contracts. B. Minors make void contracts. C. People with limited competence make void contracts. D. People with no competence make voidable contracts. E. People who have been adjudicated insane make voidable contracts. 98) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Japan B. China C. Canada D. Mexico 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 15 B. $2; about 25 C. About $2; about 15 D. Less than $1; about 25 E. Less than $1; about 40 100) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner. A. Canada, Venezuela B. Mexico, Venezuela C. Canada, Mexico D. Mexico, Canada E. Great Britain, Paraguay 1) Which one of the following is a product cost? A. Sales person’s salaries B. Advertising costs C. Indirect labor D. Office salaries 2) If a company reports a net loss, it __________. A. will not be able to make capital expenditures B. will not be able to get a loan C. may still have a net increase in cash D. will not be able to pay cash dividends 3) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________. A. have been approved for use by the managements of business firms B. have been approved by the Internal Revenue Service C. have substantial authoritative support D. are proven theories of accounting 4) The cost of an asset and its fair market value are __________. A. the same when the asset is sold B. irrelevant when the asset is used by the business in its operations C. never the same D. the same on the date of acquisition 5) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $150,000 Land (held for future use) 225,000 Corporate Office Building 900,000 Inventory 300,000 Equipment 675,000 Office Furniture 150,000 Accumulated Depreciation 450,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,650,000 B. $2,400,000 C. $1,950,000 D. $1,425,000 6) The primary purpose of the statement of cash flows is to __________. A. provide information about the cash receipts and cash payments during a period B. facilitate banking relationships C. provide information about the investing and financing activities during a period D. prove that revenues exceed expenses if there is a net income 7) A well-designed activity-based costing system starts with __________. A. analyzing the activities performed to manufacture a product B. computing the activity-based overhead rate C. assigning manufacturing overhead costs for each activity cost pool to products D. identifying the activity-cost pools 8) Managerial accounting __________. A. is governed by generally accepted accounting principles B. is concerned with costing products C. pertains to the entity as a whole and is highly aggregated D. places emphasis on special-purpose information 9) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead? A. General corporate liability insurance B. Factory janitor C. The western division’s vice president’s salary D. Cost of landscaping the corporate office 10) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 Corporate Office Building 600,000 Inventory 200,000 Equipment 450,000 Office Furniture 100,000 Accumulated Depreciation 300,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,600,000 B. $950,000 C. $1,300,000 D. $1,100,000 11) The conceptual framework developed by the Financial Accounting Standards Board __________. A. are rules that all accountants must follow B. was approved by a vote of all accountants C. is legally binding on all accountants D. is viewed as providing a constitution for setting accounting standards for financial reporting 12) What is value chain management best defined as? A. The incremental value of costs associated with hiring a new production floor leader B. 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 occurs 13) Balance sheet accounts are considered to be __________. A. capital accounts B. nominal accounts C. temporary stockholders’ accounts D. permanent accounts 14) Which one of the following items is not generally used in preparing a statement of cash flows? A. Adjusted trial balance B. Comparative balance sheets C. Additional information D. Current income statement 15) Resources are A. scarce for households but plentiful for economies. B. plentiful for households but scarce for economies. C. scarce for households and scarce for economies. D. plentiful for households and plentiful for economies. 16) 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. greater than quantity supplied. B. less than quantity supplied. C. equal to quantity supplied. D. Any of the above is possible 17) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________. A. monopolistically competitive markets B. imperfectly competitive markets C. incomplete markets D. oligopoly markets 18) Lekeisha's income exceeds her expenditures. Lekeisha is a __________. A. saver who demands money from the financial system B. borrower who demands money from the financial system C. borrower who supplies money to the financial system D. saver who supplies money to the financial system 19) There are two types of markets in which firms face some competition yet are still able to have some control over the prices of their products. The names given to these market structures are __________. A. perfect competition and monopolistic competition B. duopoly and imperfect competition C. duopoly and triopoly D. monopolistic competition and oligopoly 20) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms’ production levels as given. Then the output effect A. must dominate the price effect. B. must be smaller than the price effect. C. must balance with the price effect. D. can be larger or smaller than the price effect 21) In economics, the cost of something is __________. A. what you give up to get it B. often impossible to quantify, even in principle C. the dollar amount of obtaining it D. always measured in units of time given up to get it 22) The model of short-run economic fluctuations focuses on the price level and __________. A. the neutrality of money B. real GDP C. economic growth D. Net GDP 23) The Federal Open Market Committee __________. A. is required to keep the interest rate within a range set by Congress B. operates with almost complete discretion over monetary policy C. is required to increase the money supply by a given growth rate each year D. is required by its charter to change the money supply using a complex formula that concerns the tradeoff between inflation and unemployment 24) In the open-economy macroeconomic model, other things the same, a decrease in the interest rate shifts __________. A. the demand for dollars in the market for foreign-currency exchange to the left B. the supply of dollars in the market for foreign-currency exchange to the right C. the supply of dollars in the market for foreign-currency exchange to the left D. the demand for dollars in the market for foreign-currency exchange to the right 25) Which of the following is not correct? A. In 2005, the U.S. government had a deficit. B. A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth. C. The U.S. debt per-person is large compared with average lifetime income. D. Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so. 26) The model of aggregate demand and aggregate supply explains the relationship between __________. A. real GDP and the price level B. unemployment and output C. the price and quantity of a particular good D. wages and employment 27) The principal lag for monetary policy __________. A. is the time it takes for policy to change spending. The principal lag for fiscal policy is the time it takes to implement it B. is the time it takes to implement policy. The principal lag for fiscal policy is the time it takes for policy to change spending C. and fiscal policy is the time it takes for policy to change spending D. and fiscal policy is the time it takes to implement policy 28) The best way for an employer to find out if a potential employee can do a job is by __________. A. administering an IQ test B. using the interview process C. using a performance simulation test D. using a written test E. having them spend a day in the office 29) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n): A. Small business B. Large corporation C. Online Business D. Multinational corporation E. Entrepreneurship venture 30) 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 employee benefit plans (such as pensions, insurance, vacations, memberships, etc.) C. Differences in retention strategies (such as training, hiring, incentives, etc) D. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.) E. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.) 31) Having individuals actually do the job they are applying for as a test to see if they can do it is __________. A. an informal means of screening candidates B. a formal means of screening candidates C. an approach with high reliability D. an approach with low reliability E. an approach with high face validity 32) When a company establishes technology leadership by pioneering unique products or services that command premium prices, it has benefited from a: A. Differentiation strategy B. High-price strategy C. High-cost strategy D. Diversification strategy E. Low-cost strategy 33) An invisible barrier that makes it difficult for certain groups, such as minorities and women, to move beyond a certain level in the organizational hierarchy is referred to as the: A. Job enrichment theory B. Glass floor C. Job enlargement concept D. Black box theory E. Glass ceiling 34) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by: A. Mass-producing products that have an established market niche B. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materials C. Making subtle changes to the product, thereby avoiding patent restrictions D. Learning from the leader thereby avoiding the costs and risks of technology leadership E. Technology followers are not successful at low-cost strategies 35) Which of these describes a vision, as it pertains to leadership A. Likely to land you in a padded room B. A short-term goal of an organization C. The method through which leaders achieve goals D. A long-term goal of an organization E. A mental image of a future state of an organization 36) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a: A. Project group B. Parallel team C. Project team D. Work team E. Working group 37) 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 skills D. Technical skills E. Professional skills 38) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of: A. Staffing B. Planning C. Organizing D. Controlling E. Goal Coordination 40) A manager's ability to stimulate people to be high performers is referred to as: A. Organizing B. Staffing C. Planning D. Controlling E. Leading 41) A leader is: A. Someone with authority over others B. Someone who influences others to attain goals C. The top level manager in a firm or business D. Someone well-respected by others E. A strategic level manager 42) 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, the median is _____. A. 3 B. 3.5 C. 2 D. 2.5 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) Use the following table to answer question: P(S | W) is approximately _____. A. .40 B. .30 C. .58 D. .12 45) Use the following table to answer question: Are Service provider and county independent events? A. No B. Insufficient information to determine C. Yes 46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income. Assuming b1 is significant, if Income decreases by 1000 we would predict that Crime will __________. A. increase by 428 B. decrease by 50 C. increase by 500 D. increase by 50 47) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income. Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with Y = number of robberies in each city (thousands of robberies) and X = size of police force in each city (thousands of police)? A. No correlation B. Positive slope (due to city size). C. Autocorrelation D. High R2 (due to city size). 48) Likely reasons for inaccurate control limits would include which of the following? A. Process variation was not zero, as expected. B. The engineers were underpaid for their work. C. The engineering parameter for variance is unknown. D. There was insufficient preliminary sampling. 49) Assume that the arrival of airplanes at a one-runway airport is a Poisson distribution with a mean rate of l = 8 planes per hour. The landing time is an exponential distribution with a mean of 5 minutes per plane. What is the mean number of planes in a holding pattern? A. 1 B. 1.33 C. 2 D. 1.67 50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE? A. The expected duration of this project is 25 days. B. The expected duration of this project is 25 + 15 + 20 = 60 days. C. A–D–C is the critical path. D. A–B–C has the most slack. 51) Companies using lean systems generally have: A. many suppliers to ensure that material shortages never occur. B. suppliers that are located nearby to decrease delivery lead time. C. suppliers that are willing to accept short-term contracts. D. suppliers who are low-cost producers. 52) 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. 53) The Global, Web-Based Platform enables individuals to do which of the following? A. all of these are true B. produce and sell goods and services C. exchange knowledge D. access information, services, and entertainment E. connect, compute, communicate, collaborate, and compete everywhere and all the time 54) A set of programs that enable the hardware to process data is _____. A. procedures B. database C. software D. network E. hardware 55) What is _____ is not necessarily _____ A. unethical, legal B. ethical, illegal C. illegal, unethical D. unethical, illegal 56) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information. A. globalization B. regionalization C. nationalization D. business environment 57) 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 privacy C. It is difficult to determine and enforce privacy regulations D. The Internet has increased individuals’ privacy E. An individual’s right to privacy is absolute 58) Credit card companies would most likely use which of the following to check for fraudulent credit card use? A. Data mining B. Expert systems C. Neural networks D. Multidimensional data analysis E. Structured query language 59) Which of the following is not a reason that managers need IT support A. Decisions becoming more complex B. Need to access remote information sources C. Decisions made under pressure D. Number of alternatives are decreasing 60) Which of the following statements about information systems is not correct? A. Information systems are concentrated in the IS Department. B. Information systems tend to follow the structure of the organization. C. Information systems are based on the needs of employees. D. Any information system can be strategic. E. Managing information systems is difficult. 61) _____ is the efficient and effective execution of specific tasks. A. Expertise B. Management control C. Operational control D. Strategic planning E. Wisdom 62) _____ is the acquisition and efficient use of resources in accomplishing organizational goals. A. Strategic planning B. Wisdom C. Management control D. Expertise E. Operational control 63) 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. 12.5% B. 36.13% C. 8.0% D. 13.6% 64) Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520. Year Net Cash Flow 1 $1,000 2 $1,500 3 $ 500 A. 48% B. 32% C. 28% D. 40% 65) According to the hedging principle, permanent assets should be financed with _____ liabilities. A. fixed B. permanent C. current D. spontaneous 66) 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 profit 67) 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. $570 B. $900 C. -$150 D. $490 68) At 8% compounded annually, how long will it take $750 to double? A. 12 years B. 9 years C. 6.5 years D. 48 months 69) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period? A. Income statement B. Cash flow statement C. Balance sheet D. Quarterly statement 70) PepsiCo calculates unlevered betas for each peer group in order to: A. eliminate different financial risks. B. eliminate different business risks. C. eliminate judgment factors. D. eliminate competitive factors. 71) An increase in future value can be caused by an increase in the __________. A. dividends paid B. annual interest rate and number of compounding periods C. original amount invested D. starting value E. rate of return 72) Disadvantages of using current liabilities as opposed to long-term debt include: A. decreased risk of liquidity B. certainty of interest costs C. uncertainty of future liabilities D. higher cash flow exposure E. greater risk of illiquidity, and uncertainty of interest costs 73) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock? A. 14.37% B. 9.37% C. 20.62% D. 15.62% 74) Forward rates are quoted: A. in direct form and at a premium or discount B. by the FDIC C. in an indirect form D. on financial statements E. daily 75) Bondholders have a priority claim on assets ahead of: A. creditors. B. common and preferred stockholders. C. investors D. shareholders. 76) Regarding organizational buying, the people who have the power to select or approve the supplier--especially for larger purchases--are called: A. users. B. buyers. C. deciders. D. influencers. E. gatekeepers. 77) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called: A. market planning. B. strategic (management) planning. C. marketing strategy planning. D. management by objective. E. marketing programming. 78) The "four Ps" of a marketing mix are: A. Production, Personnel, Price, and Physical Distribution B. Promotion, Production, Price, and People C. Potential customers, Product, Price, and Personal Selling D. Product, Price, Promotion, and Profit E. Product, Place, Promotion, and Price 79) A cluster analysis of the "toothpaste market" would probably show that: A. most consumers are concerned about cost. B. most consumers are mainly concerned about brightness of teeth. C. the broad product-market can be served effectively with one marketing mix. D. factors such as taste, price, and "sex appeal" are not important. E. different market segments seek different product benefits. 80) Marketing strategy planning" means: A. selecting a target market and developing a marketing strategy. B. finding attractive opportunities and selecting a target market. C. selecting an attractive marketing mix. D. selecting an attractive target market. E. finding attractive opportunities and developing profitable marketing strategies. 81) In an effort to increase its total sales, Champion has started exporting its spark plugs for use by several German auto producers. Champion is pursuing a _____ opportunity. A. mass marketing B. diversification C. market penetration D. market development E. product development 82) The three basic tasks of ALL managers, according to the text, are: A. planning, implementation, and control. B. planning, staffing, and evaluating. C. execution, feedback, and control. D. marketing, production, and finance. E. hiring, training, and compensating. 83) The economists' view of buyers: A. None of these are true B. assumes that they always buy the lowest-price alternative. C. emphasizes psychological variables rather than social influences. D. is based on the idea that consumers value time and select the first alternative they learn about. E. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers. 84) The basic objective of the U.S. market-directed economic system is to: A. achieve an annual growth rate of at least 10 percent. B. provide each person with an equal share of the economic output. C. make the most efficient use of the country's resources. D. minimize inflation. E. satisfy consumer needs as they--the consumers--see them. 85) The clustering techniques that can be used in segmenting: A. looks for differences between groups of people. B. group people together based on age. C. eliminate the need for management intuition and judgment. D. group people together into heterogeneous product-market segments. E. try to find similar patterns within sets of data. 86) Coca-Cola is taking advantage of the new willingness of Chinese leaders to engage in international trade by marketing its soft drinks in China. What type of opportunity is Coke pursuing? A. test marketing B. product development C. market penetration D. diversification E. market development 87) 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. stratification. B. product development. C. market penetration. D. market development. E. diversification. 89) Which of the following statements is generally not true about state intermediate appellate courts? A. The appellate court allows the parties to make oral arguments outlining their position. B. The appellate court allows the parties to introduce new evidence so long as it was not previously introduced at the original trial. C. The appellate court usually allows the parties to file briefs outlining support for their positions. D. The appellate court reviews the record of the trial court. E. Appellate court decisions are final and further appeal is not possible. 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) Which of the following is true about the Sherman Act? A. A business can be liable under either Section 1 or Section 2 without any agreement with another party. B. Liability under Section 1 for restraint of trade requires agreement with another party, but liability under Section 2 for monopolization does not. C. Liability under Section 2 for monopolization requires agreement with another party, but liability under Section 1 for restraint of trade does not. D. Liability under either Section 1 or Section 2 requires agreement with another party. 92) Which of the following is correct about interpretive rules? A. Interpretive rules are not subject to judicial review. B. All federal administrative agencies have implied power to make interpretive rules. C. They must be accompanied by substantive rules. D. They do not establish new law. E. They require public notice and participation to create. 93) What makes a publicly held corporation different from a public corporation? A. A publicly held corporation must have a charitable purpose, but a public corporation need not have a charitable purpose. B. They are two terms that have the same meaning. C. A publicly held corporation has many shareholders rather than being a corporation owned by a governmental entity. D. A publicly held corporation is entitled to limited liability, but a public corporation is not. 95) Generally speaking, the contract of a minor: A. Is void. B. Is not enforceable by the minor. C. Is voidable at the minor’s option. D. Must be in writing. 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 of the following statements is true regarding the relationship of law and ethics? A. The legal requirements will almost always be the same as the ethical requirement because the law is based on ethical standards. 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, the law will require a high standard of conduct than ethics, but never vice versa. D. In some cases, ethics will require a higher standard of conduct than the law, but never vice versa. 98) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner. A. Canada, Venezuela B. Mexico, Venezuela C. Canada, Mexico D. Mexico, Canada E. Great Britain, Paraguay 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 15 B. $2; about 25 C. About $2; about 15 D. Less than $1; about 25 E. Less than $1; about 40 100) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Japan B. China C. Canada D. Mexico E. Ecuador 1) Of the following companies, which one would not likely employ the specific identification method for inventory costing? A. Music store specializing in organ sales B. Antique shop C. Farm implement dealership D. Hardware store 2) The major reporting standard for management accounts is __________. A. generally accepted accounting principles B. relevance to decisions C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management D. the Sarbanes-Oxley Act of 2002 3) 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 $44,000 The net income (or loss) for the period is __________. A. not determinable B. $10,000 loss C. $10,000 income D. $48,000 income 4) If a company reports a net loss, it __________. A. will not be able to make capital expenditures B. will not be able to get a loan C. may still have a net increase in cash D. will not be able to pay cash dividends 5) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March? A. $8,250 B. $750 C. $4,500 D. $5,250 6) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 Corporate Office Building 600,000 Inventory 200,000 Equipment 450,000 Office Furniture 100,000 Accumulated Depreciation 300,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,600,000 B. $950,000 C. $1,300,000 D. $1,100,000 7) Which one of the following items is not generally used in preparing a statement of cash flows? A. Adjusted trial balance B. Comparative balance sheets C. Additional information D. Current income statement 8) Balance sheet accounts are considered to be __________. A. temporary stockholders' accounts B. permanent accounts C. capital accounts D. nominal accounts 9) The standards and rules that are recognized as a general guide for financial reporting are called __________. A. standards of financial reporting B. operating guidelines C. generally accepted accounting principles D. generally accepted accounting standards 10) A well-designed activity-based costing system starts with __________. A. analyzing the activities performed to manufacture a product B. computing the activity-based overhead rate C. assigning manufacturing overhead costs for each activity cost pool to products D. identifying the activity-cost pools 12) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead? A. General corporate liability insurance B. Factory janitor C. The western division’s vice president’s salary D. Cost of landscaping the corporate office 13) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point? A. 2,133 units B. 4,600 units C. 6,200 units D. $25,600 14) The conceptual framework developed by the Financial Accounting Standards Board __________. A. are rules that all accountants must follow B. was approved by a vote of all accountants C. is legally binding on all accountants D. is viewed as providing a constitution for setting accounting standards for financial reporting 15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________. A. saver who demands money from the financial system B. borrower who demands money from the financial system C. borrower who supplies money to the financial system D. saver who supplies money to the financial system 16) Game theory is important for the understanding of __________. A. oligopolies B. monopolies C. competitive markets D. all market structures 17) The price of a good that prevails in a world market is called the A. relative price. B. absolute price. C. world price. D. comparative price. 18) Which of the following statements about GDP is correct? A. GDP increases if the total population increases. B. Money continuously flows from households to government and then back to households, and GDP measures this flow of money. C. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate. D. GDP is to a nation’s economy as household income is to a household. 19) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________. A. the value to Maurice of the option he would have chosen had Option B not been available B. $100 C. $300 D. the value to Maurice of Options A, C and D combined 20) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________. A. monopolistically competitive markets B. imperfectly competitive markets C. incomplete markets D. oligopoly markets 21) When a firm sells a good or a service, the sale contributes to the nation’s income __________. A. only if the buyer of the good or service is a household or another firm B. only if the buyer of the good or service is a household C. We have to know whether the item being sold is a good or a service in order to answer the question D. whether the buyer of the good or a service is a household, another firm, or the government 22) The Federal Reserve will tend to tighten monetary policy when __________. A. interest rates are rising too rapidly B. the growth rate of real GDP is quite sluggish C. it thinks the unemployment rate is too high D. it thinks inflation is too high today, or will become too high in the future 23) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________. A. the sacrifice ratio dilemma B. the monetary policy reaction lag C. the time inconsistency of policy D. inflation targeting 24) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated? A. Only item (2) is included in GDP and it is included in the investment component. B. Item (1) is included in the consumption component, while item (2) is included in the investment component. C. Item (1) is included in the investment component, while item (2) is included in the consumption component. D. Both item (1) and item (2) are included in the consumption component of GDP. 25) The principal lag for monetary policy __________. A. is the time it takes for policy to change spending. The principal lag for fiscal policy is the time it takes to implement it B. is the time it takes to implement policy. The principal lag for fiscal policy is the time it takes for policy to change spending C. and fiscal policy is the time it takes for policy to change spending D. and fiscal policy is the time it takes to implement policy 26) 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. supplied for the purpose of buying assets abroad B. supplied for the purpose of selling assets domestically C. demanded for the purpose of importing foreign goods and services D. demanded for the purpose of buying U.S. net exports of goods and services 27) The political business cycle refers to __________. A. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected B. changes in output created by the monetary rule the Fed must follow C. the fact that about every four years some politician advocates greater government control of the Fed D. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle 28) A manager's ability to stimulate people to be high performers is referred to as: A. Organizing B. Staffing C. Planning D. Controlling E. Leading 29) The best way for an employer to find out if a potential employee can do a job is by __________. A. administering an IQ test B. using the interview process C. using a performance simulation test D. using a written test E. having them spend a day in the office 30) Which of the following statements does NOT support Total Quality Management A. Use numerical quotas B. Strive for long-term improvement rather than short-term profit C. Build long-term relationships instead of awarding business on price tag alone D. Break down barriers among departments E. Creating silos between departments 31) __________ is the process of working with people and resources to accomplish organizational goals. A. Management B. Supervising C. Planning D. Decision making E. Controlling 32) Teams that work on long-term projects but disband once the work is completed are known as A. Project and development teams B. Traditional work groups C. Transnational teams D. Management teams 33) The most dominant areas in the global economy include: A. North America, Mexico and Asia B. Western Europe, Asia and Africa C. North America, Western Europe and Asia D. North America, Asia and Africa E. North America, South America and Western Europe 34) Building a dynamic organization is another way of describing which function of management? A. Controlling B. Organizing C. Planning D. Leading E. Staffing 35) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by: A. Mass-producing products that have an established market niche B. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materials C. Making subtle changes to the product, thereby avoiding patent restrictions D. Learning from the leader thereby avoiding the costs and risks of technology leadership E. Technology followers are not successful at low-cost strategies 36) 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. Successful entrepreneurs take very careful, calculated risks B. Anyone can start a business C. All entrepreneurs need venture capital in order to get started D. Entrepreneurs are their own bosses and completely independent E. Money should not be considered a start-up ingredient 37) A manager's ability to stimulate people to be high performers is referred to as: A. Organizing B. Staffing C. Planning D. Controlling E. Leading 38) Which of these refers to the practices aimed at discovering and harnessing an organization's intellectual resources? A. Effectiveness B. Knowledge management C. Collaboration D. Competitiveness E. Innovation 39) A leader is: A. Someone with authority over others B. Someone who influences others to attain goals C. The top level manager in a firm or business D. Someone well-respected by others E. A strategic level manager 40) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n): A. Large corporation B. Online Business C. Multinational corporation D. Entrepreneurship venture E. Small business 41) Which of these describes a vision, as it pertains to leadership A. Likely to land you in a padded room B. A short-term goal of an organization C. The method through which leaders achieve goals D. A long-term goal of an organization E. A mental image of a future state of an organization 42) Independent events A and B would be consistent with which of the following statements A. P (A) = .5, P (B) = .4, P (A B) = .3 B. P (A) = .4, P (B) = .5, P (A B) = .2 C. P (A) = .3, P (B) = .5, P (A B) = .4 D. P (A) = .4, P (B) = .3, P (A B) = .5 43) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income. Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with Y = number of robberies in each city (thousands of robberies) and X = size of police force in each city (thousands of police)? A. No correlation. B. Autocorrelation. C. Positive slope (due to city size). D. High R2 (due to city size). 44) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income. Assuming b1 is significant, if Income decreases by 1000 we would predict that Crime will __________. A. increase by 428 B. decrease by 50 C. increase by 500 D. increase by 50 45) Use the following table to answer question: P(S | W) is approximately _____. A. .40 B. .30 C. .12 D. .58 46) Use the following table to answer question: Are Service provider and county independent events? A. Insufficient information to determine B. Yes C. No 47) To estimate the average annual expenses of students on books and class materials a sample of size 36 is taken. The mean is $850 and the standard deviation is $54. A 99% confidence interval for the population mean is A. $823.72 to $876.28 B. $825.48 to $874.52 C. $826.82 to $873.18 D. $832.36 to $867.64 48) In an activity-on-node [AON] network, the nodes represent ____________, whereas the arcs represent ____________. A. precedence relationships; time B. events; activities C. activities; time D. activities; precedence relationships 49) Which is not a tool of statistical quality control? A. Attribute control chart B. Fishbone diagram C. Pareto chart D. Deming chart 50) Which one of the following statements concerning production and staffing plans is best? A. When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time. B. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated. C. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another. D. The impact of production and staffing plans cuts across several functional areas of the firm. 51) Suppose the estimated quadratic model Yt = 500 + 20 t - t2 is the best-fitting trend of sales of XYZ Inc. using data for the past twenty years (t = 1, 2,.., 20). Which statement is incorrect? A. Sales are increasing by about 20 units per year. B. The turning point would be in period 10. C. The trend was higher in year 10 than in year 20. D. Latest year sales are no better than in year zero. 52) You are faced with a linear programming objective function of: Max P = $20X + $30Y and constraints of: 3X + 4Y = 24 (Constraint A) 5X – Y = 18 (Constraint B) You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE? A. The most you would want to pay for an additional unit of A would be $7.50. B. You can change quantities of X and Y at no cost for Constraint B. C. For every additional unit of the objective function you create, the price of A rises by $7.50. D. For every additional unit of the objective function you create, you lose 0 units of B. 53) Search engines and metasearch engines are examples of which network application A. Local Area Network B. Web services C. Discovery D. Communications E. Collaboration 54) It is very difficult to manage data for which of the following reasons? A. data security is easy to maintain B. amount of data stays about the same over time C. data are scattered throughout organizations D. decreasing amount of external data needs to be considered E. data are stored in the same format throughout organizations 55) 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 56) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel. A. physical, digital B. e-commerce, digital C. physical, financial D. digital, e-commerce E. digital, physical 57) A set of programs that enable the hardware to process data is _____. A. procedures B. database C. software D. network E. hardware 58) _____ 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 processing E. Discovery 59) International Game Technology’s new ERP system produced all of the following benefits except: A. The company gained flexibility in manufacturing products B. Integrated the company’s business functions C. Company was able to maintain its original business processes D. ERP system connected the company’s global operations E. Operations employees were able to access manufacturing process details at their workstations 60) The management cockpit best exemplifies which type of system? A. Decision support system B. Functional area information system C. Expert system D. Digital dashboard E. Group decision support system 61) Competitive advantage for an organization manifests as all of the following except A. increased speed B. lower costs C. increased time to market D. increased profits E. higher quality 62) __________ integrate the planning, management, and use of all of an organization’s resources, and are designed to tightly integrate the functional areas of the organization. A. Corporate extranets B. Transaction processing systems C. Functional area information systems D. Enterprise resource planning systems E. Supply chain management systems 63) 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. $570 B. $900 C. -$150 D. $490 64) You hold a portfolio with the following securities: Security Percent of Portfolio Beta Return X Corporation 20% 1.35 14% Y Corporation 35% .95 10% Z Corporation 45% .75 8% Compute the expected return and beta for the portfolio. A. 10.67%, 1.02 B. 34.4%, .94 C. 9.9%, .94 D. 9.9%, 1.02 65) Mortgage bonds: A. are a type of debenture. B. usually pay little or no interest. C. are secured by a lien on real property. D. can only be issued by financial institutions 66) 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 profit 67) Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520. Year Net Cash Flow 1 $1,000 2 $1,500 3 $ 500 A. 48% B. 32% C. 28% D. 40% 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, more C. less, less D. more, less 69) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock? A. 15.62% B. 20.62% C. 14.37% D. 9.37% 70) Which of the following best represents operating income? A. Income from discontinued operations B. Earnings before interest and taxes C. Income from capital gains D. Income after financing activities 71) The common stockholders are most concerned with: A. the spread between the return generated on new investments and the investor’s required rate of return. B. the percentage of profits retained. C. the size of the firm’s beginning earnings per share. D. the risk of the investment. 72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean? A. The project’s IRR would have to be less that the firm’s discount rate. B. The project would add value to the firm. C. Under all conditions, the project’s payback would be less than the profitability index. D. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000. 73) Disadvantages of using current liabilities as opposed to long-term debt include: A. higher cash flow exposure B. greater risk of illiquidity, and uncertainty of interest costs C. decreased risk of liquidity D. certainty of interest costs E. uncertainty of future liabilities 74) 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. 12.5% B. 36.13% C. 8.0% D. 13.6% 75) If the quote for a forward exchange contract is greater than the computed price, the forward contract is: A. at equilibrium. B. undervalued. C. a good buy. D. overvalued. 76) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that: A. GDP measures show people's tendency to buy particular products. B. income tends to be evenly distributed among consumers in most countries. C. GDP estimates may not be very accurate for very different cultures and economies. D. Other countries most likely don’t use the US Dollar as their primary currency. E. GDP measures show the degree of competition in a market. 77) When one considers the strategy decisions organized by the four Ps, branding is related to packaging as: A. store location is to sales force selection. B. personal selling is to mass selling. C. production is to marketing. D. branding is to pricing. E. pricing is to promotion. 78) 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. 79) Clustering techniques applied to segmenting markets __________. A. doesn’t apply to demographic data B. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers C. remove the need for managerial judgment D. usually require computers to group people based on data from market research E. is time consuming and expensive 80) 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. the economic-buyer theory B. reference groups C. psychographics D. needs E. competitive advantage 81) When evaluating macro-marketing: A. one must determine how efficiently the society's resources are used. B. the evaluation is necessarily subjective. C. one must consider each individual firm's role in the marketing system. D. one must consider the society’s role in the marketing system. E. the best approach is to consider the profit generated by individual firms within the overall system. 82) The basic objective of the U.S. market-directed economic system is to: A. achieve an annual growth rate of at least 10 percent. B. provide each person with an equal share of the economic output. C. make the most efficient use of the country's resources. D. minimize inflation. E. satisfy consumer needs as they--the consumers--see them. 83) The three basic tasks of ALL managers, according to the text, are: A. planning, staffing, and evaluating. B. marketing, production, and finance. C. execution, feedback, and control. D. planning, implementation, and control. E. hiring, training, and compensating. 84) A cluster analysis of the "toothpaste market" would probably show that: A. most consumers are concerned about cost. B. most consumers are mainly concerned about brightness of teeth. C. the broad product-market can be served effectively with one marketing mix. D. factors such as taste, price, and "sex appeal" are not important. E. different market segments seek different product benefits. 85) The "four Ps" of a marketing mix are: A. Production, Personnel, Price, and Physical Distribution B. Promotion, Production, Price, and People C. Potential customers, Product, Price, and Personal Selling D. Product, Price, Promotion, and Profit E. Product, Place, Promotion, and Price 86) The economists' view of buyers: A. None of these are true B. assumes that they always buy the lowest-price alternative. C. is based on the idea that consumers value time and select the first alternative they learn about. D. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers. E. emphasizes psychological variables rather than social influences. 87) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market. A. Customer relationship management (CRM) B. Market scanning C. Positioning D. Brand familiarity E. Market segmentation 88) Which of the following is true about the Sherman Act? A. A business can be liable under either Section 1 or Section 2 without any agreement with another party. B. Liability under Section 1 for restraint of trade requires agreement with another party, but liability under Section 2 for monopolization does not. C. Liability under Section 2 for monopolization requires agreement with another party, but liability under Section 1 for restraint of trade does not. D. Liability under either Section 1 or Section 2 requires agreement with another party. 89) Which of the following statements is generally not true about state intermediate appellate courts? A. The appellate court allows the parties to make oral arguments outlining their position. B. The appellate court allows the parties to introduce new evidence so long as it was not previously introduced at the original trial. C. The appellate court usually allows the parties to file briefs outlining support for their positions. D. The appellate court reviews the record of the trial court. E. Appellate court decisions are final and further appeal is not possible. 90) What type of commercial speech did the U.S. Supreme Court say was protected in the Greater New Orleans Broadcasting Association, Inc. v. United States case? A. Information on gambling and lotteries. B. Information about child pornography. C. Obscene speech. D. Information on how to build a bomb. 91) Which article of the United States Constitution deals with the judicial power of the federal government? A. Article IV. B. Article II. C. Article III. D. Article I. E. Article V. 92) Mary arrived at work one day, and her boss said to her, “That’s the ugliest dress I have ever seen. Because you wore that to work today, you are fired.” Assuming that Mary is an at-will employee, which of the following is true? A. Mary can be fired only if it is in the best interest of the employer. B. If none of the exceptions to the at-will rule apply, Mary can be fired. C. If Mary has the will to work, she cannot be fired without cause. D. Mary can be fired for any reason. 93) What was the holding of the U.S. Supreme Court in its 2000 decision regarding a Massachusetts law affecting firms doing business with the nation of Myanmar (formerly Burma)? A. The state of Massachusetts was prohibited from conducting business with firms based in Myanmar B. The Massachusetts law prohibiting the state government from purchasing goods or services from firms doing business with Myanmar violated the Supremacy Clause C. Massachusetts was acting properly within its power in limited sales only within Massachusetts of firms conducting business with D. The state of Massachusetts was ordered to not discriminate against firms from Myanmar 94) Which of the following is correct about the states’ powers regarding foreign affairs A. The states can pass laws and enter into treaties with foreign nations so long as they do not unduly burden foreign commerce. B. The states can pass laws so long as they do not unduly burden foreign commerce, but the states have no authority to enter into treaties with foreign nations. C. The states have no power over foreign affairs because the U.S. Constitution grants that power exclusively to the federal governme D. The states can pass laws affecting foreign commerce and enter into treaties with foreign nations so long as they first obtain the con E. Because of the sharing of powers between the federal government and the states, states have powers over foreign affairs equal to the powers of the federal government. 95) Which of the following is not one of the Caux Round Table Principles for International Business? A. Promotion of Multiculturalism. B. Respect for the Environment. C. Support for Multilateral Trade. D. Avoidance of Illicit Operations. E. Responsibility of Business Beyond Shareholders Toward Stakeholders. 96) Information which comes to the knowledge of an agent is: A. Will result in termination of the agency arrangement if it is not communicated to the principal. B. Required to be communicated to the principal in all circumstances. C. Is imputed to the principal. D. Can be disclosed to the principal only with the third party’s consent. 97) Generally speaking, the contract of a minor: A. Is void. B. Is not enforceable by the minor. C. Is voidable at the minor’s option. D. Must be in writing. 98) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Mexico B. China C. Ecuador D. Canada E. Japan 99) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States. A. $2; about 25 B. About $2; about 15 C. Less than $1; about 15 D. Less than $1; about 25 E. Less than $1; about 40 100) 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. Mexico, Venezuela C. Great Britain, Paraguay D. Canada, Mexico E. Canada, Venezuela 1) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be A. $65. B. $75. C. $60. D. $50. 2) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $150,000 Land (held for future use) 225,000 Corporate Office Building 900,000 Inventory 300,000 Equipment 675,000 Office Furniture 150,000 Accumulated Depreciation 450,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,650,000 B. $2,400,000 C. $1,950,000 D. $1,425,000 3) Which list below best describes the major services performed by public accountants? A. Employee training, auditing, bookkeeping B. Auditing, taxation, management consulting C. Bookkeeping, mergers, budgets D. Cost accounting, production scheduling, recruiting 4) The major reporting standard for management accounts is __________. A. generally accepted accounting principles B. relevance to decisions C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management D. the Sarbanes-Oxley Act of 2002 5) The primary purpose of the statement of cash flows is to __________. A. provide information about the cash receipts and cash payments during a period B. facilitate banking relationships C. provide information about the investing and financing activities during a period D. prove that revenues exceed expenses if there is a net income 6) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________. A. have been approved for use by the managements of business firms B. have been approved by the Internal Revenue Service C. have substantial authoritative support D. are proven theories of accounting 7) The first step in activity-based costing is to __________. A. compute the activity-based overhead rate per cost driver B. identify the cost driver that has a strong correlation to the activity cost pool C. assign manufacturing overhead costs for each activity cost pool to products D. identify and classify the major activities involved in the manufacture of specific products 8) In what situations will a static budget be most effective in evaluating a manager's effectiveness? A. The company has substantial variable costs. B. The company has substantial fixed costs. C. The company has no fixed costs. D. The planned activity levels match actual activity levels. 9) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 Corporate Office Building 600,000 Inventory 200,000 Equipment 450,000 Office Furniture 100,000 Accumulated Depreciation 300,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,600,000 B. $950,000 C. $1,300,000 D. $1,100,000 10) The standards and rules that are recognized as a general guide for financial reporting are called __________. A. generally accepted accounting principles B. standards of financial reporting C. generally accepted accounting standards D. operating guidelines 11) Multinational corporations __________. A. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries B. 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 12) Which one of the following is a product cost? A. Sales person’s salaries B. Advertising costs C. Indirect labor D. Office salaries 13) 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 14) One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers? A. $150,000 B. $60,000 C. $90,000 D. $75,000 15) A production possibilities frontier will be a straight line if __________. A. the economy is producing efficiently B. the economy is engaged in trade with at least one other economy C. increasing the production of one good by x units entails no opportunity cost in terms of the other good D. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good 16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________. A. the value to Maurice of Options A, C and D combined B. the value to Maurice of the option he would have chosen had Option B not been available C. $100 D. $300 17) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________. A. should be counted only to the extent that they are more expensive at college than elsewhere B. should be counted in full, regardless of the costs of eating and sleeping elsewhere C. usually exceed the opportunity cost of going to college D. plus the cost of tuition, equals the opportunity cost of going to college 18) Which of the following statements about GDP is correct? A. GDP increases if the total population increases. B. Money continuously flows from households to government and then back to households, and GDP measures this flow of money. C. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate. D. GDP is to a nation’s economy as household income is to a household. 19) When a firm sells a good or a service, the sale contributes to the nation’s income __________. A. only if the buyer of the good or service is a household or another firm B. only if the buyer of the good or service is a household C. We have to know whether the item being sold is a good or a service in order to answer the question D. whether the buyer of the good or a service is a household, another firm, or the government 20) In computing GDP, market prices are used to value final goods and services because __________. A. market prices do not change much over time, so it is easy to make comparisons between years B. Market prices are not used in computing GDP C. market prices reflect the values of goods and services D. if market prices are out of line with how people value goods, the government sets price ceilings and price floors 21) One characteristic of an oligopoly market structure is: A. firms in the industry have some degree of market power. B. firms in the industry are typically characterized by very diverse product lines. C. the actions of one seller have no impact on the profitability of other sellers. D. products typically sell at a price that reflects their marginal cost of production. 22) Many U.S. business leaders argue that the current state of U.S. net exports is the result of A. U.S. export subsidies. B. free trade policies of foreign governments. C. unproductive U.S. workers. D. unfair foreign competition. 23) The balance of payment account is made up of: A. a monetary account and a fiscal account. B. an import account and an export account. C. a current account and a financial and capital account. D. an investment account and a consumption account. 24) The model of short-run economic fluctuations focuses on the price level and __________. A. the neutrality of money B. real GDP C. economic growth D. Net GDP 25) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated? A. Item (1) is included in the consumption component, while item (2) is included in the investment component. B. Item (1) is included in the investment component, while item (2) is included in the consumption component. C. Only item (2) is included in GDP and it is included in the investment component. D. Both item (1) and item (2) are included in the consumption component of GDP. 26) Over the past two decades, the United States has a. generally had, or been very near to a trade balance. b. had trade deficits in about as many years as it has tradesurpluses. c. persistently had a trade deficit. d. persistently had a trade surplus. 27) The Federal Reserve will tend to tighten monetary policy when __________. A. interest rates are rising too rapidly B. the growth rate of real GDP is quite sluggish C. it thinks the unemployment rate is too high D. it thinks inflation is too high today, or will become too high in the future 28) Having individuals actually do the job they are applying for as a test to see if they can do it is __________. A. an informal means of screening candidates B. a formal means of screening candidates C. an approach with high reliability D. an approach with low reliability E. an approach with high face validity 29) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States. A. Less than $1; about 15 B. $2; about 25 C. About $2; about 15 D. Less than $1; about 25 E. Less than $1; about 40 30) 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. Successful entrepreneurs take very careful, calculated risks B. Anyone can start a business C. All entrepreneurs need venture capital in order to get started D. Entrepreneurs are their own bosses and completely independent E. Money should not be considered a start-up ingredient 31) Managers will utilize __________ skills with increasing frequency as they rise within an organization. A. Technical B. Conceptual and decision C. Professional D. Professional E. Interpersonal and communication 32) Which of the following statements does NOT support Total Quality Management A. Use numerical quotas B. Strive for long-term improvement rather than short-term profit C. Build long-term relationships instead of awarding business on price tag alone D. Break down barriers among departments E. Creating silos between departments 33) To be competitive in a global economy, Europeans must increase their level of: A. Espionage activity B. Financial subsidy C. Philanthropic contributions D. Population density E. Productivity 34) __________ is the process of working with people and resources to accomplish organizational goals. A. Management B. Supervising C. Planning D. Decision making E. Controlling 35) 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 ethics C. Recruiting D. Diversity E. Employment 36) 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 harassment 37) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n): A. Small business B. Large corporation C. Online Business D. Multinational corporation E. Entrepreneurship venture 38) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a: A. Project group B. Parallel team C. Project team D. Work team E. Working group 39) A leader is: A. Someone with authority over others B. Someone who influences others to attain goals C. The top level manager in a firm or business D. Someone well-respected by others E. A strategic level manager 40) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by: A. Mass-producing products that have an established market niche B. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materials C. Making subtle changes to the product, thereby avoiding patent restrictions D. Learning from the leader thereby avoiding the costs and risks of technology leadership E. Technology followers are not successful at low-cost strategies 41) A manager's ability to stimulate people to be high performers is referred to as: A. Organizing B. Staffing C. Planning D. Controlling E. Leading 42) Thirty patients are selected from a filing cabinet containing 812 patient folders by choosing every 27th patient folder. Which sampling method is this? A. Cluster sample B. Simple random sample C. Stratified sample D. Systematic sample 43) 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, the standard deviation is approximately _____. A. 3.75 B. 4.55 C. 4.75 D. 3.03 44) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income. Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with Y = number of robberies in each city (thousands of robberies) and X = size of police force in each city (thousands of police)? A. No correlation. B. Autocorrelation. C. Positive slope (due to city size). D. High R2 (due to city size). 45) Use the following table to answer question: P(S | W) is approximately _____. A. .40 B. .30 C. .58 D. .12 46) In a random sample of 810 women employees, it is found that 81 would prefer working for a female boss. The width of the 95% confidence interval for the proportion of women who prefer a female boss is _____. A. ± .0105 B. ± .0196 C. ± .0288 D. ± .0207 47) Sampling error can be reduced by __________. A. none of the these affect sampling error B. increasing the sample size C. decreasing the sample size D. utilizing simple random samples 48) Theoretically, service capacity must exceed demand, lest queues become infinitely long. If capacity does not exceed demand, what is likely to happen? A. All of these B. Servers will eliminate time-consuming portions of their jobs, thereby increasing capacity. C. Customers will renege or balk, thereby reducing demand. D. Servers will decrease time spent per customer, thereby increasing capacity. 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) The one-worker, multiple machines approach functions as: A. a way to create uniform workstation loads. B. a production bottleneck. C. a one-person production line. D. a poka-yoke device. 51) You are faced with a linear programming objective function of: Max P = $20X + $30Y and constraints of: 3X + 4Y = 24 (Constraint A) 5X – Y = 18 (Constraint B) You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE? A. The most you would want to pay for an additional unit of A would be $7.50. B. You can change quantities of X and Y at no cost for Constraint B. C. For every additional unit of the objective function you create, the price of A rises by $7.50. D. For every additional unit of the objective function you create, you lose 0 units of B. 52) 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. 53) Various organizations that promote fair and responsible use of information systems often develop __________. A. a code of ethics B. responsibility charters C. a strategic plan D. a mission statement E. a goals outline 54) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could deploy. A. Globalization 1.0 B. Globalization 2.0 C. Globalization 3.0 D. None of these 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 privacy C. It is difficult to determine and enforce privacy regulations D. The Internet has increased individuals’ privacy E. An individual’s right to privacy is absolute 56) In the _____ phase of the decision making process, managers test potential solutions “on paper.” A. consideration B. design C. choice D. intelligence E. implementation 57) It is very difficult to manage data for which of the following reasons? A. amount of data stays about the same over time B. data are scattered throughout organizations C. decreasing amount of external data needs to be considered D. data security is easy to maintain E. data are stored in the same format throughout organizations 58) International Game Technology’s new ERP system produced all of the following benefits except: A. The company gained flexibility in manufacturing products B. Integrated the company’s business functions C. Company was able to maintain its original business processes D. ERP system connected the company’s global operations E. Operations employees were able to access manufacturing process details at their workstations 59) Information-based industries are most susceptible to which one of Porter’s five forces? A. threat of entry of new competitors B. bargaining power of suppliers C. bargaining power of customers D. threat of substitute products E. rivalry among existing firms in an industry 60) Credit card companies would most likely use which of the following to check for fraudulent credit card use? A. Data mining B. Expert systems C. Neural networks D. Multidimensional data analysis E. Structured query language 61) The end result of the Data Life Cycle is the generation of _____. A. wisdom B. data C. information D. knowledge E. decisions 62) Which of the following statements about information systems is not correct? A. Information systems are concentrated in the IS Department. B. Information systems tend to follow the structure of the organization. C. Information systems are based on the needs of employees. D. Any information system can be strategic. E. Managing information systems is difficult. 63) 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. 12.5% B. 36.13% C. 8.0% D. 13.6% 64) An increase in future value can be caused by an increase in the __________. A. dividends paid B. annual interest rate and number of compounding periods C. original amount invested D. starting value E. rate of return 65) Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520. Year Net Cash Flow 1 $1,000 2 $1,500 3 $ 500 A. 48% B. 32% C. 28% D. 40% 66) Mortgage bonds: A. are a type of debenture. B. usually pay little or no interest. C. are secured by a lien on real property. D. can only be issued by financial institutions 67) The common stockholders are most concerned with: A. the risk of the investment. B. the size of the firm’s beginning earnings per share. C. the percentage of profits retained. D. the spread between the return generated on new investments and the investor’s required rate of return. 68) Exchange rate risk: A. doesn’t affect trades made in US Dollars. B. has been phased out due to recent international legislation. C. arises from the fact that the spot exchange rate on a future date is a random variable. D. applies only to certain types of domestic businesses. 69) PepsiCo calculates unlevered betas for each peer group in order to: A. eliminate different financial risks. B. eliminate different business risks. C. eliminate judgment factors. D. eliminate competitive factors. 70) Suppose you determine that the NPV of a project is $1,525,855. What does that mean? A. The project’s IRR would have to be less that the firm’s discount rate. B. The project would add value to the firm. C. Under all conditions, the project’s payback would be less than the profitability index. D. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000. 71) Dublin International Corporation’s marginal tax rate is 40%. It can issue three-year bonds with a coupon rate of 8.5% and par value of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $23 per bond in flotation costs. Determine the approximate after-tax cost of debt for Dublin International to use in a capital budgeting analysis. A. 9.2% B. 5.1% C. 8.5% D. 6.0% 72) 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 profit 74) Forward rates are quoted: A. in direct form and at a premium or discount B. by the FDIC C. in an indirect form D. on financial statements E. daily 75) Tri State Pickle Company preferred stock pays a perpetual annual dividend of 2 1/2% of its par value. Par value of TSP preferred stock is $100 per share. If investors’ required rate of return on this stock is 15%, what is the value of per share? A. $6.00 B. $16.67 C. $37.50 D. $15.00 76) In comparison to the buying of final consumers, the purchasing of organizational buyers: A. is always emotional. B. leans basically toward economy, quality, and dependability. C. is even less predictable. D. is always based on competitive bids from multiple suppliers. E. is strictly economic and not at all emotional. 77) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market. A. Customer relationship management (CRM) B. Market scanning C. Positioning D. Brand familiarity E. Market segmentation 78) When evaluating macro-marketing: A. one must determine how efficiently the society's resources are used. B. the evaluation is necessarily subjective. C. one must consider each individual firm's role in the marketing system. D. one must consider the society’s role in the marketing system. E. the best approach is to consider the profit generated by individual firms within the overall system. 79) Marketing strategy planning" means: A. selecting a target market and developing a marketing strategy. B. finding attractive opportunities and selecting a target market. C. selecting an attractive marketing mix. D. selecting an attractive target market. E. finding attractive opportunities and developing profitable marketing strategies. 80) The basic objective of the U.S. market-directed economic system is to: A. achieve an annual growth rate of at least 10 percent. B. provide each person with an equal share of the economic output. C. make the most efficient use of the country's resources. D. minimize inflation. E. satisfy consumer needs as they--the consumers--see them. 81) Analysis of demographic dimensions: A. is the most important step to successful segmentation. B. can be used along with analysis of other dimensions to identify attractive target markets. C. considers income and sex, but not age. D. only considers age. E. is the most effective way to identify unmet consumer needs. 82) When looking at demographic dimensions, marketers should: A. recognize that demographics can be very useful for estimating the market potential of possible target markets. B. know that it is illegal to segment markets based on membership in some racial or ethnic group. C. understand that ethnic groups are generally homogeneous within. D. always consider external influences. E. know that demographics are especially helpful in explaining why specific people buy specific brands. 83) The difference between target marketing and mass marketing is that target marketing: A. means focusing on a small market. B. focuses on short-run objectives, while mass marketing focuses on long-run objectives. C. focuses on specific customers, while mass marketing aims at an entire market. D. aims at increased sales, while mass marketing focuses on increased profits. E. does not rely on e-commerce but mass marketing does. 84) When one considers the strategy decisions organized by the four Ps, branding is related to packaging as: A. store location is to sales force selection. B. personal selling is to mass selling. C. production is to marketing. D. branding is to pricing. E. pricing is to promotion. 85) 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. the economic-buyer theory B. reference groups C. psychographics D. needs E. competitive advantage 86) Coca-Cola is taking advantage of the new willingness of Chinese leaders to engage in international trade by marketing its soft drinks in China. What type of opportunity is Coke pursuing? A. test marketing B. product development C. market penetration D. diversification E. market development 87) When doing "positioning," a marketing manager should: A. exclusively use focus groups. B. avoid targeting strategies. C. rely on how customers think about proposed and/or existing brands in a market. D. focus on specific product features of all generic competitors. E. plan physical product changes rather than image changes. 88) Which of the following statements is not true under the Fair Labor Standards Act? A. Children ages 16 and 17 may work unlimited hours in nonhazardous jobs. B. Persons age 18 or over may work unlimited hours in nonhazardous jobs. C. Children ages 14 and 15 may work limited hours in nonhazardous jobs. D. Children under 14 cannot work at all, except on farms. E. Persons age 18 or over may work unlimited hours in hazardous jobs. 89) Which of the following is true about the Sherman Act? A. A business can be liable under either Section 1 or Section 2 without any agreement with another party. B. Liability under Section 1 for restraint of trade requires agreement with another party, but liability under Section 2 for monopolization does not. C. Liability under Section 2 for monopolization requires agreement with another party, but liability under Section 1 for restraint of trade does not. D. Liability under either Section 1 or Section 2 requires agreement with another party. 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) 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. 92) In which of the following are these steps of a criminal case listed in the correct order? A. Arrest, indictment, trial, arraignment B. Arrest, arraignment, indictment, trial C. Indictment, arraignment, arrest, trial D. Arraignment, arrest, trial, indictment E. Arrest, indictment, arraignment, trial 93) Which of the following is true about “proof of claims?” A. They can generally be filed any time within one year of the filing of the bankruptcy petition. 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 are never used by secured creditors. 94) If a minor wishes to be bound to a contract after becoming an adult, she must: A. Bring an action to verify the contract. B. Give back the goods or services received as a minor. C. Disaffirm the contract. D. Ratify the contract. 95) What is the major convention that provides international protection to patents? A. The Digital Millennium Treaty. B. The Berne Convention of 1786. C. The Paris Convention. D. The General Agreement on Tariffs and Trade (GATT). 96) Which of the following lists, in descending priority, of sources considered by most courts in settling questions of international law? A. Conventions, treaties, comity, customs B. Treaties, customs, conventions, comity C. Treaties, customs, conventions, comity D. Conventions, comity, customs, general principles of law E. Treaties, customs, general principles of law, judicial decisions and teachings 97) If you are a creditor, your best protection in the event of the debtor’s bankruptcy (including protection from the debtor’s other creditors) is usually obtained if you had previously received: A. A security interest granted by the debtor. B. A written promise from the debtor to pay the debt as agreed. C. Audited financial statements of the debtor. D. The debtor’s agreement to pay you first. 98) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Japan B. China C. Canada D. Mexico 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 15 B. $2; about 25 C. About $2; about 15 D. Less than $1; about 25 E. Less than $1; about 40 100) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner. A. Canada, Venezuela B. Mexico, Venezuela C. Canada, Mexico D. Mexico, Canada E. Great Britain, Paraguay 1) 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 $44,000 To 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 column B. 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 2) Multinational corporations __________. A. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries B. 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 accounts 4) What is value chain management best defined as? A. The incremental value of costs associated with hiring a new production floor leader B. 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 occurs 5) The primary purpose of the statement of cash flows is to __________. A. provide information about the cash receipts and cash payments during a period B. facilitate banking relationships C. provide information about the investing and financing activities during a period D. prove that revenues exceed expenses if there is a net income 6) 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 salaries B. Advertising costs C. Indirect labor D. Office salaries 8) These are selected account balances on December 31, 2008. Land (location of the corporation's office building) $100,000 Land (held for future use) 150,000 Corporate Office Building 600,000 Inventory 200,000 Equipment 450,000 Office Furniture 100,000 Accumulated Depreciation 300,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? A. $1,600,000 B. $950,000 C. $1,300,000 D. $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 sales C. Hardware store D. Farm implement dealership 10) 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 expenditures D. will not be able to pay cash dividends 11) 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. $12,000 B. $18,000 C. $6,000 D. $28,000 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 aggregated B. 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 trade C. 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 other B. collude with each other C. form various degrees of cartels D. cooperate rather than compete with each other 19) 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 supplied C. less than quantity supplied D. double the quantity supplied 20) 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 ceiling 21) A tax on an imported good is called a __________. A. supply tax B. quota C. tariff D. trade tax 22) The political business cycle refers to __________. A. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle B. the fact that about every four years some politician advocates greater government control of the Fed C. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected D. changes in output created by the monetary rule the Fed must follow 23) 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 money B. real GDP C. economic growth D. Net GDP 25) 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 services B. 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 services 26) 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 rate D. the trade balance and the exchange rate 27) 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 contributions C. 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 management E. Effectiveness 30) 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 leadership B. 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 materials E. Technology followers are not successful at low-cost strategies 31) 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 office B. 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. Supervising C. 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 integration D. Six Sigma Quality E. Mechanistic 34) The pursuit of lucrative opportunities by enterprising individuals is called: A. Business incubating B. Social experimentation C. Independence D. Intrapreneurship E. Entrepreneurship 35) 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 skills D. Technical skills E. Professional skills 36) Managers will utilize __________ skills with increasing frequency as they rise within an organization. A. Technical B. Professional C. Interpersonal and communication D. Conceptual and decision E. Professional 37) 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 ethics C. Employment D. Diversity E. Recruiting 39) 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 started C. Entrepreneurs are their own bosses and completely independent D. Anyone can start a business E. Successful entrepreneurs take very careful, calculated risks 40) Which of these represent skills that managers need? A. Professional, technical and interpersonal & communication B. Interpersonal & communication, conceptual & decision making and professional C. Interpersonal, quantitative, and professional D. Technical, interpersonal & communication and conceptual & decision making E. Conceptual & decision making, professional and technical 41) 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 harassment 42) 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. ± .07357 B. ± .08765 C. ± .04472 D. ± .00329 45) Use the following table to answer question: P(S | W) is approximately _____. A. .40 B. .12 C. .58 D. .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. Midrange D. Median 47) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value? A. .0708 B. .0301 C. .0874 D. .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 sample C. measure the number of defects per sample unit D. use the student's distribution 51) 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-commerce D. 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 privacy C. It is difficult to determine and enforce privacy regulations D. The Internet has increased individuals’ privacy E. An individual’s right to privacy is absolute 56) 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 pressure D. Need to access remote information sources E. Number of alternatives are decreasing 59) _____ 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 processing E. Discovery 60) 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 industry C. bargaining power of customers D. bargaining power of suppliers 61) _____ is the acquisition and efficient use of resources in accomplishing organizational goals. A. Strategic planning B. Wisdom C. Management control D. Expertise E. Operational control 62) _____ is the efficient and effective execution of specific tasks. A. Strategic planning B. Wisdom C. Management control D. 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 operations D. Earnings before interest and taxes 66) 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, more C. less, less D. more, less 69) 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 periods C. dividends paid D. rate of return E. starting value 71) 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. -$150 D. $570 72) 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 profit 76) 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 theory E. competitive advantage 77) 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 consumers B. remove the need for managerial judgment C. usually require computers to group people based on data from market research D. doesn’t apply to demographic data E. is time consuming and expensive 79) The "four Ps" of a marketing mix are: A. Production, Personnel, Price, and Physical Distribution B. Promotion, Production, Price, and People C. Potential customers, Product, Price, and Personal Selling D. Product, Price, Promotion, and Profit E. Product, Place, Promotion, and Price 80) 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 segmentation 83) 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 25 B. Less than $1; about 15 C. About $2; about 15 D. $2; about 25 E. Less than $1; about 40 100) 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 1) The major reporting standard for management accounts is __________. A. generally accepted accounting principles B. relevance to decisions C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management D. the Sarbanes-Oxley Act of 2002 2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________. A. have been approved for use by the managements of business firms B. have been approved by the Internal Revenue Service C. have substantial authoritative support D. are proven theories of accounting 3) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March? A. $4,500 B. $8,250 C. $5,250 D. $750 4) Managerial accounting __________. A. is governed by generally accepted accounting principles B. is concerned with costing products C. pertains to the entity as a whole and is highly aggregated D. places emphasis on special-purpose information 5) The conceptual framework developed by the Financial Accounting Standards Board __________. A. are rules that all accountants must follow B. was approved by a vote of all accountants C. is legally binding on all accountants D. is viewed as providing a constitution for setting accounting standards for financial reporting 6) 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 $44,000 To enter the net income (or loss) for the period into the above worksheet requires an entry to the __________. A. income statement credit column and the balance sheet debit column B. income statement debit column and the balance sheet credit column C. income statement debit column and the income statement credit column D. balance sheet debit column and the balance sheet credit column 7) In what situations will a static budget be most effective in evaluating a manager's effectiveness? A. The company has substantial variable costs. B. The company has substantial fixed costs. C. The company has no fixed costs. D. The planned activity levels match actual activity levels. 8) 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. $28,000 B. $12,000 C. $18,000 D. $6,000 9) If a company reports a net loss, it __________. A. will not be able to make capital expenditures B. will not be able to get a loan C. may still have a net increase in cash D. will not be able to pay cash dividends 10) The cost of an asset and its fair market value are __________. A. the same when the asset is sold B. irrelevant when the asset is used by the business in its operations C. never the same D. the same on the date of acquisition 11) The first step in activity-based costing is to __________. A. compute the activity-based overhead rate per cost driver B. identify the cost driver that has a strong correlation to the activity cost pool C. assign manufacturing overhead costs for each activity cost pool to products D. identify and classify the major activities involved in the manufacture of specific products 12) The cost principle is the basis for preparing financial statements because it is __________. A. the most accurate measure of purchasing power B. a conservative value C. relevant and objectively measured, and verifiable D. an international accounting standard 13) Multinational corporations __________. A. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries B. 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 14) The primary purpose of the statement of cash flows is to __________. A. provide information about the cash receipts and cash payments during a period B. facilitate banking relationships C. provide information about the investing and financing activities during a period D. prove that revenues exceed expenses if there is a net income 15) In order to be successful, a cartel must a. find a way to encourage members to produce more than they would otherwise produce. b. agree on the total level of production for the cartel, but they need not agree on the amount produced by each member. c. agree on the total level of production and on the amount produced by each member. d. agree on the prices charged by each member, but they need not agree on amounts produced. 16) Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market? a. high prices b. low price elasticity of demand c. high compatibility of member interests d. significant barriers to entry e. unequal member ownership of the natural resources 17) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms’ production levels as given. Then the output effect A. must dominate the price effect. B. must be smaller than the price effect. C. must balance with the price effect. D. can be larger or smaller than the price effect 18) A rational decision maker __________. A. ignores the likely effects of government policies when he or she makes choices B. ignores marginal changes and focuses instead on “the big picture” C. takes an action only if the marginal benefit of that action exceeds the marginal cost of that action D. takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions 19) One characteristic of an oligopoly market structure is: A. firms in the industry have some degree of market power. B. firms in the industry are typically characterized by very diverse product lines. C. the actions of one seller have no impact on the profitability of other sellers. D. products typically sell at a price that reflects their marginal cost of production. 20) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________. A. monopolistically competitive markets B. imperfectly competitive markets C. incomplete markets D. oligopoly markets 21) A production possibilities frontier will be a straight line if __________. A. the economy is producing efficiently B. the economy is engaged in trade with at least one other economy C. increasing the production of one good by x units entails no opportunity cost in terms of the other good D. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good 22) Real GDP __________. A. evaluates current production at the prices that prevailed in some specific year in the past. B. is not a valid measure of the economy's performance, since prices change from year to year. C. is a measure of the value of goods only; it excludes the value of services. D. evaluates current production at current prices. 23) The Federal Open Market Committee __________. A. is required to keep the interest rate within a range set by Congress B. operates with almost complete discretion over monetary policy C. is required to increase the money supply by a given growth rate each year D. is required by its charter to change the money supply using a complex formula that concerns the tradeoff between inflation and unemployment 24) 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. supplied for the purpose of buying assets abroad B. supplied for the purpose of selling assets domestically C. demanded for the purpose of buying U.S. net exports of goods and services D. demanded for the purpose of importing foreign goods and services 25) In general, the longest lag for __________. A. both fiscal and monetary policy is the time it takes for policy to affect aggregate demand B. monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand C. fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand D. both fiscal and monetary policy is the time it takes to change policy 26) Most economists use the aggregate demand and aggregate supply model primarily to analyze __________. A. the effects of macroeconomic policy on the prices of individual goods B. short-run fluctuations in the economy C. productivity and economic growth D. the long-run effects of international trade policies 27) The political business cycle refers to __________. A. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected B. changes in output created by the monetary rule the Fed must follow C. the fact that about every four years some politician advocates greater government control of the Fed D. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle 28) 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 harassment 29) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by: A. Mass-producing products that have an established market niche B. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materials C. Making subtle changes to the product, thereby avoiding patent restrictions D. Learning from the leader thereby avoiding the costs and risks of technology leadership E. Technology followers are not successful at low-cost strategies 30) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of: A. Staffing B. Planning C. Organizing D. Controlling E. Goal Coordination 31) The most dominant areas in the global economy include: A. North America, South America and Western Europe B. North America, Western Europe and Asia C. Western Europe, Asia and Africa D. North America, Asia and Africa E. North America, Mexico and Asia 32) The best way for an employer to find out if a potential employee can do a job is by __________. A. administering an IQ test B. using the interview process C. using a performance simulation test D. using a written test E. having them spend a day in the office 33) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity? A. work sampling B. intelligence tests C. behavioral assessment D. aptitude tests E. integrity evaluations 34) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a: A. Project group B. Parallel team C. Project team D. Work team E. Working group 35) The pursuit of lucrative opportunities by enterprising individuals is called: A. Business incubating B. Intrapreneurship C. Social experimentation D. Entrepreneurship E. Independence 36) Building a dynamic organization is another way of describing which function of management? A. Leading B. Staffing C. Controlling D. Planning E. Organizing 37) Which of these refers to the practices aimed at discovering and harnessing an organization's intellectual resources? A. Effectiveness B. Knowledge management C. Collaboration D. Competitiveness E. Innovation 38) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is: A. Total quality management B. Customer-based integration C. Computer-integrated manufacturing (CIM) D. Just-in-time control (JIT) E. ISO 9000 39) To be competitive in a global economy, Europeans must increase their level of: A. Espionage activity B. Financial subsidy C. Philanthropic contributions D. Population density E. Productivity 40) Having individuals actually do the job they are applying for as a test to see if they can do it is __________. A. an informal means of screening candidates B. a formal means of screening candidates C. an approach with high reliability D. an approach with low reliability E. an approach with high face validity 41) 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, the median is _____. A. 3 B. 3.5 C. 2 D. 2.5 42) 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, the standard deviation is approximately _____. A. 3.75 B. 4.55 C. 4.75 D. 3.03 43) A financial institution wishes to estimate the mean balances owed by its credit card customers? A financial institution wishes to estimate the mean balances owed by its credit card customers. The population standard deviation is estimated to be $300. If a 98 percent confidence interval is used and an interval of ±$75 is desired, how many cardholders should be sampled? A. 3382 B. 62 C. 629 D. 87 44) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value? A. .0708 B. .0874 C. .4292 D. .0301 45) Use the following table to answer question: P(S | W) is approximately _____. A. .40 B. .30 C. .58 D. .12 46) 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) 47) Suppose the estimated quadratic model Yt = 500 + 20 t - t2 is the best-fitting trend of sales of XYZ Inc. using data for the past twenty years (t = 1, 2,.., 20). Which statement is incorrect? A. Sales are increasing by about 20 units per year. B. The turning point would be in period 10. C. The trend was higher in year 10 than in year 20. D. Latest year sales are no better than in year zero. 48) 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 master production schedule is a projected statement of income, costs, and profits. C. Aggregation can be performed along three dimensions: product families, labor, and time. D. A staffing plan is the intermediate link between the business plan and the master production schedule 49) 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. 50) Which one of the following statements concerning production and staffing plans is best? A. When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time. B. The impact of production and staffing plans cuts across several functional areas of the firm. C. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated. D. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another. 51) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE? A. The expected duration of this project is 25 days. B. The expected duration of this project is 25 + 15 + 20 = 60 days. C. A–D–C is the critical path. D. A–B–C has the most slack. 52) The Global, Web-Based Platform enables individuals to do which of the following? A. all of these are true B. produce and sell goods and services C. exchange knowledge D. access information, services, and entertainment E. connect, compute, communicate, collaborate, and compete everywhere and all the time 53) Search engines and metasearch engines are examples of which network application? A. Web services B. Discovery C. Communications D. Local Area Network E. Collaboration 54) In the _____ phase of the decision making process, managers test potential solutions “on paper.” A. consideration B. design C. choice D. intelligence E. implementation 55) 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 56) When customers access a Web site and make purchases, they generate __________. A. Web data B. Tracking cookies C. Information D. Clickstream data E. Hyperlink data 57) Which of the following is NOT a function of functional area information systems? A. provides analysis capabilities to middle level managers and staff B. provides information mainly in the form of reports C. supports the managerial tasks of planning, organizing, and controlling operations D. provides information to managers in the functional areas E. provides data from business events to the corporate database 58) 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 industry C. bargaining power of customers D. bargaining power of suppliers 59) Computer support is greatest for which of the following problems? A. Semistructured and management control B. Unstructured and operational control C. Semistructured and strategic planning D. Structured and operational control E. Structured and management control 60) _____ 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 processing E. Discovery 61) Credit card companies would most likely use which of the following to check for fraudulent credit card use? A. Data mining B. Expert systems C. Neural networks D. Multidimensional data analysis E. Structured query languag 62) Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520. Year Net Cash Flow 1 $1,000 2 $1,500 3 $ 500 A. 48% B. 32% C. 28% D. 40% 63) If the quote for a forward exchange contract is greater than the computed price, the forward contract is: A. at equilibrium. B. undervalued. C. a good buy. D. overvalued. 64) The common stockholders are most concerned with: A. the risk of the investment. B. the size of the firm’s beginning earnings per share. C. the percentage of profits retained. D. the spread between the return generated on new investments and the investor’s required rate of return. 66) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years? A. 7% B. 6% C. 5% D. 8% 67) 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. 12.5% B. 36.13% C. 8.0% D. 13.6% 68) Dublin International Corporation’s marginal tax rate is 40%. It can issue three-year bonds with a coupon rate of 8.5% and par value of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $23 per bond in flotation costs. Determine the approximate after-tax cost of debt for Dublin International to use in a capital budgeting analysis. A. 9.2% B. 5.1% C. 8.5% D. 6.0% 69) 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 profit 70) 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. $570 B. $900 C. -$150 D. $490 71) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period? A. Income statement B. Cash flow statement C. Balance sheet D. Quarterly statement 72) Bondholders have a priority claim on assets ahead of: A. creditors. B. common and preferred stockholders. C. investors D. shareholders. 73) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows: Cost of debt 8% Cost of preferred stock 12% Cost of common stock 16% Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project? A. $1,568 B. $463 C. $1,241 D. $871 74) Which of the following best represents operating income? A. Income from discontinued operations B. Income from capital gains C. Income after financing activities D. Earnings before interest and taxes 75) Suppose you determine that the NPV of a project is $1,525,855. What does that mean? A. The project’s IRR would have to be less that the firm’s discount rate. B. The project would add value to the firm. C. Under all conditions, the project’s payback would be less than the profitability index. D. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000. 76) Analysis of demographic dimensions: A. is the most important step to successful segmentation. B. can be used along with analysis of other dimensions to identify attractive target markets. C. considers income and sex, but not age. D. only considers age. E. is the most effective way to identify unmet consumer needs. 77) When one considers the strategy decisions organized by the four Ps, branding is related to packaging as: A. store location is to sales force selection. B. personal selling is to mass selling. C. production is to marketing. D. branding is to pricing. E. pricing is to promotion. 78) The clustering techniques that can be used in segmenting: A. looks for differences between groups of people. B. group people together based on age. C. eliminate the need for management intuition and judgment. D. group people together into heterogeneous product-market segments. E. try to find similar patterns within sets of data. 79) When evaluating macro-marketing: A. one must determine how efficiently the society's resources are used. B. the evaluation is necessarily subjective. C. one must consider each individual firm's role in the marketing system. D. one must consider the society’s role in the marketing system. E. the best approach is to consider the profit generated by individual firms within the overall system. 80) Clustering techniques applied to segmenting markets __________. A. doesn’t apply to demographic data B. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers C. remove the need for managerial judgment D. usually require computers to group people based on data from market research E. is time consuming and expensive 81) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called: A. market planning. B. strategic (management) planning. C. marketing strategy planning. D. management by objective. E. marketing programming. 82) "Positioning": A. eliminates the need for judgment in strategy planning. B. applies to new products--but not existing products. C. is concerned with obtaining the best shelf space in retail outlets. D. helps strategy planners see how customers view competitors' offerings. E. is useful for combining but not for segmenting. 83) In an effort to increase its total sales, Champion has started exporting its spark plugs for use by several German auto producers. Champion is pursuing a _____ opportunity. A. mass marketing B. diversification C. market penetration D. market development E. product development 84) Which of the following is a business or organizational customer? A. All of these are business and organizational customers. B. a wholesaler. C. a government agency. D. a retailer. E. producers of goods or services. 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. stratification. B. product development. C. market penetration. D. market development. E. diversification. 86) Economists' economic-buyer theory assumes that __________. A. consumers only want the cheapest price B. consumers should purchase only low-priced products C. consumers always make rational decisions D. buyers logically compare choices in order to maximize their satisfaction E. demographic data are very useful for predicting consumer behavior 87) The "four Ps" of a marketing mix are: A. Production, Personnel, Price, and Physical Distribution B. Promotion, Production, Price, and People C. Potential customers, Product, Price, and Personal Selling D. Product, Price, Promotion, and Profit E. Product, Place, Promotion, and Price 88) Bob, an employee of Risky Manufacturing, Inc. is accidentally injured by a fellow worker while working his shift. Under workers’ compensation, Bob can: A. Recover from workers’ compensation only if Risky was negligent in allowing the injury to occur. B. Sue Risky or seek workers’ compensation recovery, but not both. C. Seek workers’ compensation only. D. Sue Risky or seek workers’ compensation recovery. 89) Justin was hired in February of 2004 as a salesperson. There is no written employment contract, and Justin is paid on a commission basis. Justin’s manager has said to Justin on several occasions that if Justin continues to meet his sales quotas, that the company “will keep him around for a long time.” Justin has always met his sales quotas, but is told one day that they have decided to replace him because he does not project the image that the company wants. If Justin is an at-will employee, which of the following is true? A. The employer would not be able to fire Justin on the basis of public policy. B. The statements by the manager could likely give Justin contract rights that could amount to an exception to the at-will doctrine. C. The employer can terminate Justin only if the employer would suffer a loss by not terminating him. D. As an at will employee, there are no restrictions on the employer terminating Justin. E. Because there is no written employment contract, the employer can terminate Justin. 90) Which of the following statements is not true under the Fair Labor Standards Act? A. Children ages 16 and 17 may work unlimited hours in nonhazardous jobs. B. Persons age 18 or over may work unlimited hours in nonhazardous jobs. C. Children ages 14 and 15 may work limited hours in nonhazardous jobs. D. Children under 14 cannot work at all, except on farms. E. Persons age 18 or over may work unlimited hours in hazardous jobs. 91) In which of the following are these steps of a criminal case listed in the correct order? A. Arrest, indictment, trial, arraignment B. Arrest, arraignment, indictment, trial C. Indictment, arraignment, arrest, trial D. Arraignment, arrest, trial, indictment E. Arrest, indictment, arraignment, trial 92) Which of the following is correct about interpretive rules? A. Interpretive rules are not subject to judicial review. B. All federal administrative agencies have implied power to make interpretive rules. C. They must be accompanied by substantive rules. D. They do not establish new law. E. They require public notice and participation to create. 93) Which of the following is correct with regard to the relationship between law and ethics? A. Although much of law is based on ethical standards, not all ethical standards have been enacted as law. B. The rule of law and the golden rule of ethics demand the same response. C. The law may not permit something that would be ethically wrong. D. Lawful conduct is always ethical conduct. 94) Which of the following statements is true regarding the relationship of law and ethics? A. The legal requirements will almost always be the same as the ethical requirement because the law is based on ethical standards. 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, the law will require a high standard of conduct than ethics, but never vice versa. D. In some cases, ethics will require a higher standard of conduct than the law, but never vice versa. 95) For which of the following kinds of intellectual property is a filing or registration required in order to receive protection A. Copyrights B. Copyright and Service marks C. Service marks D. Trademarks E. Patents and Trademarks 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) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner. A. Canada, Venezuela B. Mexico, Venezuela C. Canada, Mexico D. Mexico, Canada E. Great Britain, Paraguay 99) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods? A. Japan B. China C. Canada D. Mexico E. Ecuador 100) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States. A. Less than $1; about 15 B. $2; about 25 C. About $2; about 15 D. Less than $1; about 25 E. Less than $1; about 40 [Show More]

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