GLB Capstone Midterm (Chapter 5)

Answering the balanced scorecard question of "how do we create value?" challenges managers to develop strategic objectives that ensure future ______. (Check all that apply.)

- innovation - competitiveness - organizational learning

Investors in a company are mostly concerned about the company's ______.

Total return to shareholders

In general, a firm generates ______ when its cost of capital is lower than its ROIC.

value

Which of the following are among the most commonly used metrics for comparing the performance of different companies? (Check all that apply.)

- return on revenue - return on equity - return on assets

3 Standard Performance Dimensions

1. Accounting profitability 2. Shareholder value 3. Economic value

To determine how well money devoted to sales support is being spent, managers look at the marketing intensity ratio, which is also known as ______.

SG&A/revenue

Companies are required to provide ______ to shareholders, which are used in determining a firm's competitive advantage.

benchmarks

When a firm goes bankrupt, shareholders ___.

cannot recover their risk capital

A firm's actual ___ minus depreciation is called the book value.

costs of assets

The difference between the cost of producing a product and the price consumers are willing to pay for that product is known as ______.

economic value created

The subjectively determined maximum amount a customer would pay for a product is its ______ price.

reservation

When a trade occurs, the consumer and producer both capture ______.

some of the economic value

Which of the following statements about the disadvantages of the accounting profitability perspective are correct?

- Accounting data are historical and therefore backward-looking. - Accounting data focus primarily on tangible assets.

Which of the following statements are true about the rival businesses Apple and Microsoft? (Check all that apply.)

- Apple introduced a series of popular consumer electronic devices. - Microsoft leveraged its computer operating system to sell other software programs.

Which of the following are true of a firm's book value? (Check all that apply.)

- It is calculated as costs of assets minus accumulated depreciation. - Its importance has declined over time. - It captures the historical cost of a firm's assets.

To determine a product's producer surplus, which of the following must be compared? (Check all that apply.)

- Total cost of production - Price charged

Which of the following are standard performance dimensions for a company? (Check all that apply.)

- a firm's accounting profitability - how much economic value a firm generates - how much shareholder value a firm creates

According to the efficient-market hypothesis, information about which of the following is embedded in a stock price? (Check all that apply.)

- a firm's current state - a firm's past - expectations of the firm's future performance

Which of the following statements is best illustrated by the decades-long business rivalry between the technology giants Apple and Microsoft?

A firm's competitive advantage is transitory.

If Tom would have paid $1,000 for a new laptop but was able to purchase one for $800, the $200 he saved is considered his ______.

Consumer Surplus

The difference between the cost of producing a product and the price consumers are willing to pay for that product is known as ______.

Economic value created

Profit margin

The profit margin is the difference between the PRICE charged (which is not always the same as the price consumers are willing to pay) and the cost of producing a product.

Public companies are required by law to release detailed accounting data, which enables ______.

comparative analysis of firms

When the high market valuation of internet-based firms, such as Facebook or Google, is analyzed, the importance of ______ becomes clear.

intangible

Which of the following would provide the best benchmark of a computer firm's performance relative to other high-tech firms?

the NASDAQ computer index

The most a consumer is willing to pay for a product is equivalent to the product's ______.

total perceived consumer benefits

In order to determine market capitalization, one multiplies which of the following together?

- number of outstanding shares - share price

Which of the following are considered off-balance sheet items? (Check all that apply.)

- pension obligations - operating leases

In their annual filing with the Securities and Exchange Commission, public companies in the United States must report which of the following? (Check all that apply.)

- the total return to shareholders - benchmarks