BUS 498 Chapter 5 TB

________ are the legal owners of public companies. A) Employees B) Shareholders C) Category captains D) Creditors

B) Shareholders

________ is best described as the difference between a buyer's willingness to pay for a product or service and a firm's total cost to produce it. A) Economic value created B) Break-even point C) Consumer surplus D) Cost of capital

A) Economic value created

In an economic context, strategy for producers is primarily about A) distributing the economic value created equally between consumers and themselves. B) reducing the difference between consumer's willingness to pay for a product and the cost to produce it. C) capturing the economic value created as much as possible. D) lowering producer surplus and increasing consumer surplus.

C) capturing the economic value created as much as possible.

Economic value creation is best expressed as A) producer surplus minus consumer surplus. B) consumer surplus minus cost of production. C) consumer surplus plus firm profit. D) producer surplus plus firm profit.

C) consumer surplus plus firm profit.

The top management at Sunshine Vitamins, through rigorous testing, ensures that the company develops and sells vitamins that are free of harmful side effects. Also, the company ensures that the chemical waste generated in the manufacturing process is kept to a bare minimum and is disposed of according to the regulations of the Environmental Protection Agency. The management assesses its overall performance based on these dimensions. Thus, the managers at Sunshine Vitamins are applying the ________ approach to measure firm performance. A) economic value creation B) shareholder value creation C) triple-bottom-line D) accounting profitability

C) triple-bottom-line

Serena paid $900 for a camera that she thought was worth $1100 for all the features included in it. For the consumer electronics firm selling the camera, however, the cost of producing the camera was only $350. What is the consumer surplus in this scenario? A) $900 B) $1,100 C) $550 D) $200

D) $200

________ is a business model in which the manufacturer sets a fixed price on a product, but the retailer is free to set it's own price. A) Agency B) Freemium C) Bundling D) Wholesale

D) Wholesale

________, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period. A) Total return to shareholders B) Earnings per share C) Receivables turnover D) Dividend yield

A) Total return to shareholders

________ are best described as the value of the best forgone alternative use of the resources employed. A) Variable costs B) Opportunity costs C) Social costs D) Switching costs

B) Opportunity costs

Which of the following competitively important assets is typically excluded from a firm's balance sheet? A) land and building B) accounts payable C) patents D) customer experience

D) customer experience

Happy Foods and General Grains both produce similar puffed rice breakfast cereals. For both companies, the cost of producing a box of cereal is 45 cents, and it is not possible for either company to lower their production costs any further. How can one company achieve a competitive advantage over the other? A) Increase total perceived consumer benefits through differentiation. B) Raise prices above the current reservation price. C) Lower prices to the break-even price. D) Increase the number of stock market shares available to investors.

A) Increase total perceived consumer benefits through differentiation.

Which of the following is a disadvantage of measuring firm performance through total return to shareholders and firm market capitalization? A) Market volatility makes it difficult to assess firm performance through these measures, particularly in the short-term. B) These tools fail to indicate how the stock market views all available public information about a firm's expected future performance. C) These tools measure competitive advantage in absolute terms rather than relative terms. D) Only the book value of the share prices is taken into account when applying these measures, and not the market value.

A) Market volatility makes it difficult to assess firm performance through these measures, particularly in the short-term.

The market capitalization of a public company is $5 billion. Each share of the company is traded at $200. What do you infer from this financial data? A) The firm's number of outstanding shares is 25 million. B) The firm pays an annual dividend of 10 percent. C) The firm's total return to shareholder is $5 billion. D) The firm's economic value created is $5 billion.

A) The firm's number of outstanding shares is 25 million.

Mega Media sells books by having salespeople set up appointments with potential customers and give them a sales pitch for the product. When a salesperson sells a book, he or she gets a predetermined percentage commission. This type of business model is called A) an agency. B) bundling. C) wholesale. D) a freemium.

A) an agency.

Competitive advantage goes to the firm that achieves the A) largest economic value created. B) lowest producer surplus. C) highest payable turnover. D) highest Cost of goods sold/Revenue ratio.

A) largest economic value created.

The ratio Cost of goods sold/Revenue indicates how efficiently a company can A) produce a good. B) sell a good. C) advertise a good. D) design a good.

A) produce a good.

From an investors' or shareholders' perspective, the measure of competitive advantage that matters most is the A) return on risk capital. B) economic value created. C) consumer surplus. D) inventory turnover.

A) return on risk capital.

Return on risk capital primarily includes A) stock price appreciation plus dividends received over a specific period. B) consumer surplus plus firm profit. C) account receivables plus account payables. D) economic value created by a firm plus reservation price.

A) stock price appreciation plus dividends received over a specific period.

A high percentage of R&D/Revenue ratio indicates a(n) A) strong focus on innovation to improve current products and services. B) inefficiency in the management to focus on new products. C) strong focus on marketing and sales to promote products and services. D) negligent investment toward research and development.

A) strong focus on innovation to improve current products and services.

Which of the following approaches to assess competitive advantage is based on the view that noneconomic factors can have a significant impact on a firm's financial performance? A) the triple-bottom-line approach B) the economic value creation framework C) the accounting profitability approach D) the balanced-scorecard

A) the triple-bottom-line approach

During the process of formulating an effective business model, a firm's managers should first A) transform their strategy of how to compete into a blueprint of actions and initiatives. B) implement their strategy at corporate, strategic business unit, and functional levels. C) implement their blueprint of actions and initiatives through structures, processes, culture, and procedures. D) evaluate the firm's strategy already in effect and take corrective actions if necessary.

A) transform their strategy of how to compete into a blueprint of actions and initiatives.

A defining characteristic of the pay-as-you-go business model is that the A) users pay for only the services they consume. B) users pay for access to a product or service whether they use it during the payment term or not. C) initial product is often sold at a loss in order to drive demand for complementary goods. D) the basic features of a service are provided free of charge, but the user must pay for premium services.

A) users pay for only the services they consume.

Mobius Electronics incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the product at $600 in the market. Considering the technological advancement of the cell phone, customers perceive its value to be around $800. What is the economic value created in this scenario? A) $350 B) $450 C) $800 D) $200

B) $450

Which of the following statements is true of accounting data? A) Accounting data focus mainly on intangible assets, rather than tangible assets. B) Accounting data are historical data and thus backward-looking. C) Accounting data do not have to be adjusted in any manner to compare companies with different capital structures. D) Accounting data consider off-balance sheet items, such as pension obligations of a firm.

B) Accounting data are historical data and thus backward-looking.

Which of the following statements correctly compares Apple and Microsoft in 2016? A) Apple had a higher return on revenue than Microsoft. B) Apple had a higher return on invested capital than Microsoft. C) Microsoft had higher total sales than Apple. D) Microsoft had a lower cost structure than Apple.

B) Apple had a higher return on invested capital than Microsoft.

You are the CEO of a home appliance manufacturing company and have recently undertaken a review of your company's strategy. In comparing your stock market valuation to that of your closest competitor, you note that your firm is currently valued at $50 billion, while your competitor is valued at $40 billion. How should you proceed? A) Consider this evidence of a sustainable competitive advantage and maintain your current strategy. B) Compare the current valuations with past valuations to determine a trend. C) Assume your current strategy has failed and begin to formulate a new one. D) Compare your valuation to firms in another industry.

B) Compare the current valuations with past valuations to determine a trend.

It is April 2018 and Mark is a novice investor who wants to decide between purchasing shares in EagleCorp or Myna Bird Inc. In fiscal year 2017, EagleCorp's return on invested capital (ROIC) was 15 percent, and its cost of capital was 12 percent. During the same period, Myna Bird Inc.'s ROIC was 22 percent and its cost of capital was 25 percent. What does this information tell Mark? A) Myna Bird Inc. is more likely to create value while EagleCorp is more likely to destroy value. B) EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value. C) Both Myna Bird Inc. and EagleCorp are likely to create value. D) Neither Myna Bird Inc. nor EagleCorp are likely to create value.

B) EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value.

Which of the following is an advantage of applying the economic value creation perspective to assess a firm's performance? A) When the need for "hard numbers" arises, managers and analysts rely on economic value creation perspective to measure competitive advantage. B) In economic value perspective, analysts not only consider historical costs, but also opportunity costs. C) Arriving at the economic value created is easy because determining the value of a good in the eyes of consumers is a simple task. D) It is the most efficient tool for assessing corporate-level competitive advantage of highly diversified companies with large product portfolios.

B) In economic value perspective, analysts not only consider historical costs, but also opportunity costs.

Which of the following is an advantage of the balanced-scorecard? A) It is a tool for both strategic formulation and strategic implementation. B) It allows managers to translate a firm's vision into measureable operational goals. C) The balanced-scorecard is independent of the skills of the managers responsible for its implementation. D) Its implementation is a one-time effort and does not require continuous tracking of metrics or updating of strategic objectives.

B) It allows managers to translate a firm's vision into measureable operational goals.

The Lynx Manufacturing Company produces components used in electronic toys. In fiscal year 2017, Lynx earned an accounting profit of $3 million. However, Lynx's production facilities might have also been used to produce components for mobile phones, which would have generated $2 million in revenues and saved the company $500,000 in production costs. Which of the following statements is true? A) Lynx earned an economic profit of $5.5 million. B) Lynx earned an economic profit of $500,000. C) Lynx suffered an economic loss of $500,000. D) Lynx suffered an economic loss of $2.5 million.

B) Lynx earned an economic profit of $500,000.

________ denotes the dollar amount a consumer would attach to a good or service. A) Utility B) Value C) Consumer surplus D) Economic contribution

B) Value

Rock Bottom Tiles has developed a new customer-oriented business model. Rather than maintain a network of showrooms across the country, the business will now let customers choose several styles that interest them from an online site, and will ship samples of each of the styles to the customer to test in their home free of charge. Once they have settled on a tile choice, Rock Bottom will send a representative to their home to schedule installation. The company has determined that busy middle-class customers will value the convenience of the new model, which allow them to upgrade the look of their homes without spending time browsing showrooms. The new model will be created by selling the old showrooms and shifting resources to the new online site and regional offices for sales personnel. What question remains for Rock Bottom to ask in order to put its strategy into action? A) Why does the business model create value? B) What activities need to be performed to create and deliver the offerings to consumers? C) How are the offerings to the customers created? D) Who are the main stakeholders who will be performing the activities?

B) What activities need to be performed to create and deliver the offerings to consumers?

Unlike the financial ratios based on accounting data, total return to shareholders is A) backward-looking and historic in nature. B) an external performance metric. C) an absolute measure of competitive advantage. D) unaffected by market volatility or macroeconomic factors.

B) an external performance metric.

How does a firm capture its producer surplus for a good or service? A) as cost per unit sold B) as profit per unit sold C) as earnings per share D) as market price per share

B) as profit per unit sold

The value a consumer attaches to a product or service is captured in the A) least price a consumer is willing to pay for it. B) consumer's maximum willingness to pay for it. C) expenses incurred by the firm in manufacturing it. D) difference between the price charged for it and the cost to produce it.

B) consumer's maximum willingness to pay for it.

Threadless allows customers to submit their own designs and to vote on which designs they would like to see printed on a T-shirt. This business uses a ________ technique. A) offshoring B) crowdsourcing C) peer-to-peer D) binge watching

B) crowdsourcing

By selling a laptop at $1,000 for which consumers are willing to pay up to $1,200, a consumer electronics firm makes a profit of $400 per unit. In this scenario, the amount $600, that is ($1200 - $1000) + $400, is the A) opportunity cost. B) economic value created. C) reservation price. D) consumer surplus.

B) economic value created.

Cloudlink is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate? A) subscription-based B) freemium C) pay-as-you-go D) razor-razor-blade

B) freemium

The ratio of SG&A/Revenue is an indicator of a firm's focus on A) researching to produce innovative products and services. B) marketing and sales to promote its products and services. C) producing a good in an efficient manner. D) creating a good that is cost-effective.

B) marketing and sales to promote its products and services.

Polygon sells its e-book readers at the cost price of $15 each. However, the company makes its profits when users have to download or buy books online. Which of the following business models is Polygon implementing? A) subscription-based B) razor-razor-blade C) pay-as-you-go D) direct sales

B) razor-razor-blade

A defining characteristic of the subscription-based business model is that the A) user pays for only the services he or she consumes. B) user pays for access to a product or service whether he or she uses it during the payment term or not. C) basic features of a product or service are provided free of charge, but the user must pay for premium services such as advanced features or add-ons. D) initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.

B) user pays for access to a product or service whether he or she uses it during the payment term or not.

A watchmaking company has priced one of its wristwatches at $210. Most of its competitors sell similar watches at $180. Selling anything less than $150 would result in a loss for the company. However, the absolute maximum a customer is willing to pay for it is $170. In this scenario, what is the reservation price of the wristwatch? A) $150 B) $180 C) $170 D) $210

C) $170

A firm incurs $100 to manufacture an office table. It fixes the market price of the table as $250, and discounts the price to $200. However, the maximum a person is willing to pay for it is $180. What is the amount of total perceived consumer benefits in this scenario? A) $250 B) $200 C) $180 D) $100

C) $180

A firm has 30 million shares outstanding, and each share is traded at $100. Also, each shareholder gets a dividend of $2,000 annually. In this case, the market capitalization is A) 30,000 shares, that is, 30 million shares/$100. B) $200,000, that is, $2,000 × $100. C) $3 billion, that is, 30 million shares × $100. D) 20:1, that is, $2,000/$100.

C) $3 billion, that is, 30 million shares × $100.

Elena is the CEO of Geode Technologies, a consumer electronics manufacturer. Last year, Geode's return on invested capital (ROIC) was 11.6 percent, while Geode's closest competitor, NorthWest Tech, had an ROIC of 17 percent. Which of the following factors might Elena use to convince investors to invest in Geode rather than NorthWest Tech? A) Geode had a Research & development (R&D) expense / Revenue ratio of 16 percent, while NorthWest Tech had an R&D / Revenue ratio of 12 percent. B) Geode's working capital to revenue ratio was 75 percent, while NorthWest Tech's was 68 percent. C) Geode's intangible intensity was 6 percent, while NorthWest Tech's was 3 percent. D) Geode's plant, property, and equipment (PPE) over revenue ratio was 19 percent, while NorthWest Tech's was 10 percent.

C) Geode's intangible intensity was 6 percent, while NorthWest Tech's was 3 percent.

Which of the following scenarios exemplifies a sustainable strategy under the triple bottom line approach? A) Rather than complying with the restrictive recycling laws in the United States, Impervious Plastics outsourced its manufacturing to a country that has fewer environmental restrictions. B) Impervious Plastics developed a chemical additive that doubled the life of its plastics. The additive was currently legal, but environmental groups argued that it harmed the environment. C) Impervious Plastics reformulated its products to eliminate chemicals that were widely used in the industry but were being investigated for their potential negative effects on the environment. D) Impervious Plastics' nearest competitor increased the salaries of its production workers by 30 percent, but Impervious kept its wages the same to gain a cost advantage over its competitor.

C) Impervious Plastics reformulated its products to eliminate chemicals that were widely used in the industry but were being investigated for their potential negative effects on the environment.

________ precisely indicates how much of a firm's sales is converted into profits. A) Break-even price B) Working capital turnover C) Return on revenue D) Inventory turnover

C) Return on revenue

Both Saturn Technologies and Granite Inc. incur a cost of $200 to manufacture a single unit of a cell phone. However, Saturn Technologies charges a higher price than Granite Inc. does, but it still sells a higher number of phones. What does this imply? A) Saturn Technologies and Granite have achieved a competitive parity. B) Granite Inc. has a competitive advantage over Saturn Technologies. C) Saturn Technologies creates more economic value than Granite Inc. does. D) Granite Inc. is not charging enough for its product.

C) Saturn Technologies creates more economic value than Granite Inc. does.

Erin is the manager of gardening supplies wholesaler SpringTime Inc. The company's vision is to become the leading supplier of gardening materials west of the Mississippi River. In assessing the firm's current state, Erin has determined that the firm could differentiate itself from competitors with an easy-to-use online ordering system and a two-day delivery guarantee. To accomplish this, Erin has determined that SpringTime must spend the next two quarters honing its capabilities for sourcing materials quickly and improving its web development competencies. According to the balanced scorecard approach, what is wrong with Erin's thinking? A) She has not considered the opportunity costs associated with launching an online ordering system. B) She has not addressed the question of which core competencies the firm needs. C) She has failed to account for external factors such as customer perceptions and shareholder perceptions. D) She has not addressed the question of how SpringTime will create value.

C) She has failed to account for external factors such as customer perceptions and shareholder perceptions.

The tenet behind the triple-bottom-line is that A) a firm should solely focus on increasing the economic value created to/for its customers. B) a firm's primary objective should be increasing the total returns to its shareholders. C) a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy. D) a firm's return on revenue can be broken down into three ratios: COGS/Revenue, R&D/Revenue, and SG&A/Revenue.

C) a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

You are the founder of Shadow Skateboards, and you are considering methods of gaining and sustaining a competitive advantage. Which of the following changes has the best chance of quickly creating a sustainable advantage? A) devoting significant resources to researching and developing new products that will be more durable than competitors' B) automating the manufacturing process to reduce production costs C) allowing customers to upload their own image designs and help assemble the finished product at retail locations D) switching to a just-in-time inventory system to reduce inventory costs

C) allowing customers to upload their own image designs and help assemble the finished product at retail locations

The balanced-scorecard can accommodate A) only short-term performance metrics. B) only long-term performance metrics. C) both short- and long-term performance metrics. D) neither short- or long-term performance metrics.

C) both short- and long-term performance metrics.

The translation of strategy into action primarily takes place in a firm's A) mission statement. B) executive summary. C) business model. D) code of conduct.

C) business model.

54) When SW International declared a dividend of $20,000,000, its market value increased from $8 billion to $8.5 billion. However, it lost a chance to reinvest $20,000,000 in the research and development of a new product which would have earned a profit of $200 million. Thus, this $200 million is referred to as SW International's A) producer surplus. B) consumer surplus. C) opportunity cost. D) social cost.

C) opportunity cost.

Unplug Wireless is a cellular service provider that charges its customers $1 for three hours of talk time. So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month. Which of the following business models does this best illustrate? A) razor-razor-blade B) subscription-based C) pay-as-you-go D) freemium

C) pay-as-you-go

The difference between the price charged for a product and the cost to manufacture it is referred to as the A) consumer surplus. B) break-even price. C) producer surplus. D) reservation price.

C) producer surplus.

Shark Fin Golf Club requires its members to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate? A) razor-razor-blade B) pay-as-you-go C) subscription-based D) freemium

C) subscription-based

The management team for Volcanic Batteries came up with the following vision statement: "Volcanic Batteries will conscientiously track its financial performance to ensure profits for its investors, enhance its community through employment and supporting charities, and dispose of waste in a manner that will not harm the environment." This vision statement is most likely based on the A) accounting profitability approach. B) economic value creation approach. C) triple-bottom-line approach. D) balanced-scorecard approach.

C) triple-bottom-line approach.

Which of the following statements about competitive advantage is true? A) Competitive advantage is an absolute measure; it is not relative. B) Competitive advantage is a one-dimensional concept. C) Competitive advantage is permanent and not transitory; once gained by a firm it stays with the firm. D) Competitive advantage can be assessed by measuring accounting profit, shareholder value, or economic value.

D) Competitive advantage can be assessed by measuring accounting profit, shareholder value, or economic value.

The working capital turnover of Tesva Systems Corp. is 6.0. What does this financial data suggest? A) For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00. B) For every $6.00 Tesva Systems puts to work, the company realizes sales of $1.00. C) For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss. D) For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.

D) For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.

Which of the following scenarios best illustrates bundling? A) Clean Brush Inc. sells its electric toothbrushes for a low cost, but charges a high price for replacement brushes. B) Cumulus Media Inc. sells its cloud computing network by having customers pay for the service as they use it. C) Sharp Cable Inc. sells its basic TV channels for free but charges high prices for any channels that customers add on later. D) Fresh Seeds Inc. sells seed packages, in which a person can buy a package of three types of seeds at a discounted price compared to buying the seeds individually.

D) Fresh Seeds Inc. sells seed packages, in which a person can buy a package of three types of seeds at a discounted price compared to buying the seeds individually.

Which of the following statements is true of the balanced-scorecard? A) It is a more or less a one-dimensional metric of measuring competitive advantages of a firm. B) It is one of the traditional approaches of measuring firm performance. C) Its primary focus is to base a firm's strategic goals entirely on external performance dimensions. D) It attempts to provide a holistic perspective on firm performance.

D) It attempts to provide a holistic perspective on firm performance.

How does a sustainable strategy typically help a firm? A) It helps the firm focus solely on its financial goals. B) It reduces the need for corporate social responsibility within the firm. C) It facilitates the firm in effectively isolating its external stakeholders. D) It helps the firm achieve positive results along the social and ecological dimensions.

D) It helps the firm achieve positive results along the social and ecological dimensions.

Which of the following is a disadvantage of the balanced-scorecard approach? A) It fails to link the strategic vision to responsible parties within the organization. B) It fails to translate the vision into measureable operational goals. C) It provides limited guidance for designing and planning business processes. D) It provides limited guidance about which metrics to choose.

D) It provides limited guidance about which metrics to choose.

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research & development expense/Revenue, and A) Accounting profitability/Revenue. B) Economic value created/Revenue. C) Total return to shareholders/Revenue. D) Selling, general, & administrative expense/Revenue.

D) Selling, general, & administrative expense/Revenue.

A firm incurs $400 to manufacture a television. In the market, customers are willing to pay a maximum of $600 for the television priced at $500. The difference of $200 ($600 minus $400) is the A) consumer surplus. B) total return to shareholders. C) customer lifetime value. D) economic value created.

D) economic value created.

Aguilar Industries has produced a new piece of technology that will monitor the soil moisture in a user's garden and send a notification to an app on the user's phone when it is time to water their plants. The goal of this inexpensive technology is to entice users to purchase Aguilar's more expensive automated watering system, so that they can trigger the watering process from the app on their phones. Which business model is most likely to help Aguilar Industries accomplish its goals? A) agency B) wholesale C) pay-as-you-go D) freemium

D) freemium

Zelda is a recent fashion graduate. She started her own apparel store with an investment of $300,000. In the first year she made a profit of $60,000. If she had taken up a job as a fashion editor for a magazine, she would have earned $50,000 as salary per year. Also, she could have invested her capital, $300,000, in treasury bonds and earned an interest of $12,000. Thus, the amount $62,000 ($50,000 + $12,000) would be Genevieve's A) social cost. B) break-even price. C) reservation price. D) opportunity cost.

D) opportunity cost.

After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress. However, the dress was priced at $80. What is the amount, $100, referred to as? A) the producer surplus B) the firm's cost (C) in manufacturing the dress C) the consumer surplus D) the value (V) the consumer attaches to the dress

D) the value (V) the consumer attaches to the dress

Which of the following is an external performance metric? A) return on revenue B) fixed assets turnover C) inventory turnover D) total return to shareholders

D) total return to shareholders

The cost of capital to create a product is a fixed cost because it is A) directly proportional to the output level. B) uniform throughout all firms and industries. C) not a part of the profit calculations. D) unaffected by consumer demand.

D) unaffected by consumer demand.

Which of the following expressions accurately describes market cap? A) It is the product of the number of outstanding shares and the share price. B) It is the difference between the book value and the market value of a firm's assets. C) It is the ratio of a firm's equity finance and its debt finance. D) It is the difference between a firm's account receivables and account payables.

A) It is the product of the number of outstanding shares and the share price.

Which of the following is an advantage of a triple-bottom-line approach? A) The approach takes an integrative and holistic view in assessing a company's performance. B) The approach does not rely on an external view of a firm to assess its performance. C) The approach is more of a quantitative performance metric rather than a mere conceptual framework. D) The framework can help managers assess a firm's competitive advantage without taking into account the firm's performance along noneconomic dimensions.

A) The approach takes an integrative and holistic view in assessing a company's performance.

________ is best described as a measure of how effectively capital is being used by a firm to generate revenue. A) Return on revenue B) Risk capital C) Working capital turnover D) Revenue per employee

C) Working capital turnover

Which of the following frameworks used to measure competitive advantage relies on both an internal and an external view of a firm? A) the economic value creation model B) the accounting profitability model C) the shareholder value creation model D) the balanced-scorecard model

D) the balanced-scorecard model