MAN 4720, Chapter 5, Exam 1

14. To understand how efficiently a company is in extending credit (i.e. the degree to which it gives customers interest-free loans), companies look at the ratio of revenue to a. A/R b. A/P c. SG&A d. COGS

a. A/R

18. When you join Zooooom you are allowed to use a motorized scooter whenever you like, though you do not have to own the machine. You have to pay by the hours of usage. Zooooom operates on a ________ model a. Pay-as-you-go b. Subscription-based c. Razor-razor-blade d. Triple bottom line

a. Pay-as-you-go

11. Netflix has a large library of streaming content, but also has recently begun producing and distributing original content. This demonstrates that business models are most successful when they include various a. Reinforcing activities b. Action-plan discussions c. Balanced scorecards d. Strategy summits

a. Reinforcing activities

15. Benchmarks are useful in determining a firm's a. Likelihood of surviving b. Competitive advantage c. Number of shareholders d. Market share

b. Competitive advantage

2. Given that compared to the past the importance of intangible has increased, the importance of the firm's book value has ______ as part of a firm's total stock market valuation a. Increased b. Decreased c. Stayed the same

b. Decreased

4. To determine the value of a good in the eyes of consumers, a firm can a. Identify some of the most commonly used profitability metrics in strategic management b. Examine a consumer's purchasing habits for their revealed preferences c. Employ the use of estimates in firm level strategic management d. Recall the fixed and variable costs to measure competitive advantage

b. Examine a consumer's purchasing habits for their revealed preferences

9. True or False: When companies commit to sustainable strategies, they do so purely out of a spirit of charity, with an understanding that doing so will hurt the bottom line a. True b. False

b. False

12. With the growing popularity of the internet, the pay-as-you-go model is a. Becoming increasingly niche b. Gaining momentum c. Difficult to apply outside its traditional functions d. Dying out

b. Gaining momentum

8. A balanced scorecard is a tool for strategy a. Formulation b. Implementation c. Survival d. Metrics

b. Implementation

5. When a company has a low payables turnover ratio, it indicates a. The firm has increased its number of invoices b. MORE efficient management in paying creditors and generating interest-free loans from suppliers c. LESS efficient management in paying creditors and generating interest-free loans from suppliers

b. MORE efficient management in paying creditors and generating interest-free loans from suppliers

1. Because external factors create volatility in stock prices, a better measure of a firm's performance over the long term is the a. Unemployment rate b. Total return to shareholders c. Sum total of the market's trajectory d. The NASDAQ computer index

b. Total return to shareholders

3. When a firm does unfavorably compared to similar firms, it is said to a. File for bankruptcy b. Underperform c. Go our of business d. Exceed benchmarks

b. Underperform

17. Netflix's decisions to produce digital content is a notable example of a. Overhead maximization modeling b. Consumer cost sharing c. Business model innovation d. Revenue depreciation

c. Business model innovation

16. When trade happens, consumers and producers both capture a. Opportunity cost b. Some cost reduction surplus c. Some of the economic value d. Various strategic intent factors

c. Some of the economic value

10. To determine how efficiently a company can produce a good, managers look to the a. SG&A/revenue ratio b. COGS/inventory ratio c. R&D/revenue ratio d. COGS/revenue ratio

d. COGS/revenue ratio

13. The money a firm spends to set up a sales website can be considered a ______ cost a. Competitive b. Low c. Variable d. Fixed

d. Fixed

7. A balanced scorecard offers both common financial metrics and a variety of _____ on customer satisfaction, internal processes, and the company's innovation and improvement activities a. Variable cost indices b. Overhead reduction benefits c. Opportunity costs d. Operational measures

d. Operational measures

6. To determine economic value creation, one must look at a. Consumer surplus minus the firm's profit b. Economic contextual factors c. The sum of opportunity d. The sum of consumer and producer surplus

d. The sum of consumer and producer surplus