479 Chapter 8 Quiz

The common stock of a firm that is owned by the firm itself is called​ what? A. Treasury stock B. Convertible stock C. Goodwill D. Preferred stock E. Retained earnings

A. Treasury stock

In the United States​ , only two states currently require businesses to tell employees if their electronic communicationslong dash—including ​e-mails, instant​ messages, texts,​ photos, and websites visitedlong dash—are being​ monitored; the two states are​ _____ and​ _____. A. Delaware; Connecticut B. Virginia; Florida C. Hawaii, Oregon D. New​ York; California E. Texas; Alaska

A. Delaware; Connecticut

What formula below is correct for valuing a company using the​ price/earnings ratio​ method? A. Divide the market price of the​ firm's common stock by the annual earnings per share​ (EPS) and multiply this number by the​ firm's average net income for the past 5 years. B. Divide the market price of the​ firm's common stock by the​ firm's current ratio and multiply this number by the​ firm's average net income for the past 5 years. C. Divide the market price of the​ firm's common stock by the annual earnings per share​ (EPS) and multiply this number by the​ firm's average revenue for the past 5 years. D. Divide the market price of the​ firm's common stock by the annual earnings per share​ (EPS) and multiply this number by the​ firm's average sales for the past 5 years. E. Divide the market price of the​ firm's common stock by the​ firm's debt-to-equity ratio and multiply this number by the​ firm's average net income for the past 5 years.

A. Divide the market price of the​ firm's common stock by the annual earnings per share​ (EPS) and multiply this number by the​ firm's average net income for the past 5 years.

In​ EPS/EBIT analysis, from where does the tax rate percentage​ come? A. Use the​ company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the​ firm's income statement. B. Use the​ company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the​ firm's cash flow statement. C. Just use 10 percent for all financing options to better examine impact of debt versus stock options for raising capital. D. Estimate the​ company's future tax rate based on the​ company's strategies. E. Use the respective​ country's federal income tax rate.

A. Use the​ company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the​ firm's income statement.

Is the following statement​ true? No federal laws in the United States currently prevent businesses from using GPS devices to monitor​ employees, and federal law does not require businesses to disclose to employees whether they are using such techniques. A. Yes B. No C. It depends on the particular industry. D. It depends on the particular state. E. C and D

A. Yes

Digital advertising spending on social media and mobile devices increased nearly​ ____ percent to​ $50 billion in the United States in​ 2014, comprising 28 percent of total ad spending in the nation. A. 37 B. 17 C. 27 D. 47 E. 7

B. 17

About​ _____ percent of all traffic on the Internet is​ fake, the result of bogus computers programmed to visit websites to take advantage of marketers who typically pay for ads whenever they are loaded when a user visits a​ webpage, regardless of whether the user is an actual person. A. 56 B. 36 C. 26 D. 16 E. 46

B. 36

Regarding corporate​ valuation, a conservative rule of thumb is to establish a​ business's worth as​ ____ times the​ firm's current annual profit. A. 10 B. 5 C. 12 D. 6 E. 3

B. 5

Another term for product positioning is​ _______________. A. product marketing B. perceptual mapping C. perceptual marketing D. product mapping E. product segmentation

B. perceptual mapping

More than 40 percent of businesses that send employees out on service calls today track the location and movement of those employees by their​ company-owned/-provided hand-held devices or vehicles. A. 50 B. 30 C. 40 D. 20 E. 10

C. 40

The top 20 most valuable college football programs are listed in the chapter in terms of their monetary value. What team is most​ valuable? A. Michigan Wolverines B. LSU Tigers C. Texas Longhorns D. Notre Dame Fighting Irish E. Alabama Crimson Tide

C. Texas Longhorns

What two criteria does an excellent product positioning map​ meet? A. It uniquely distinguishes a company from the competition. B. It leads to an effective target market. C. It leads customers to expect slightly less service than a company can deliver. D. A and C E. A and B

D. A and C

Limitations of​ EPS/EBIT analysis​ include: A. dividends and EBIT ranges. B. continuity and extent leveraged. C. timing, control, and flexibility. D. A, B, and C E. A and C

D. A, B, and C

In developing projected financial​ statements, how do you calculate retained earnings on the balance​ sheet? A. Use a percentage of sales method based on the prior 3 years coupled with the​ company's strategies. B. Use retained earnings as the plug figure to make the balance sheet balance. C. Add the net income to the prior​ year's retained earnings. D. Add the net income less dividends to the prior​ year's retained earnings. E. Use a percentage of sales methods based on the prior 3 years.

D. Add the net income less dividends to the prior​ year's retained earnings.

Three marketing activities are especially important in strategy implementation and thus are discussed as major sections in Chapter 8. Which activity is not one of the​ three? A. Engage customers in social media. B. Develop and use​ product-positioning/perceptual maps. C. Segment markets effectively. D. Advertise products effectively. E. B and D

D. Advertise products effectively.

Some hotel​ chains, such as​ ________, are holding off on using smartphones as keys until potential security issues can be resolved. A. Motel 6 B. Starwood Hotels and Resorts C. Hilton Worldwide D. Marriott E. Super 8 Motels

D. Marriott

The marketing mix component​ variables, also called the 4​ P's of​ marketing, are: A. personal​ selling, place,​ publicity, and price. B. ​publicity, price, personal​ selling, and place. C. product, publicity,​ packaging, and price. D. product, place,​ promotion, and price. E. price, place,​ publicity, and packaging.

D. product, place,​ promotion, and price.

R&D spending in China increased to about​ $___ billion in​ 2014, up​ ___ percent from 2012. In​ contrast, R&D spending in the United States grew about​ ___ percent to​ $____ billion during the same period. A. 225; 26;​ 62; 115 B. 46; 4;​ 8; 92 C. 465; 4;​ 22; 285 D. 115; 62;​ 26; 225 E. 285; 22;​ 4; 465

E. 285; 22;​ 4; 465

Which statement below is​ false? A. FASB Rule 142 requires companies to admit once a year whether the premiums they paid for​ acquisitions, called​ goodwill, were a waste of money. B. Goodwill is not a good thing to have on a balance sheet. C. Because goodwill​ write-down accounting rules involve projections and​ judgments, companies have leeway for when to write down​ goodwill, and by how much. D. A and C E. All statements are true.

E. All statements are true.

Which statement below is​ false? A. Many firms prefer to leave their cash outside the United States if it was earned outside the United States because to use those funds to pay dividends or purchase treasury​ stock, for​ example, would trigger a big U.S. corporate income tax payment. B. Going public is not recommended for companies with less than​ $10 million in sales because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile. C. Increasingly, companies are issuing corporate bonds to buy back their own stock and to pay cash dividends to shareholders. This has become a concern. D. "Going public" means selling off a percentage of a company to others to raise​ capital; consequently, it dilutes the​ owners' control of the firm. E. All statements are true.

E. All statements are true.

What is the only​ way(s) for retained earnings on the balance sheet to decrease from one year to the​ next? A. If the firm spent more retained earnings than it earned in a year B. If the firm had positive net income for the year but paid out dividends greater than the net income C. If the firm incurred an earnings loss that year D. If the firm had zero net income for the year but paid out some dividends E. B, C, and D

E. B, C, and D

When a firm buys more of its own common​ stock, what is the effect on the​ firm's earnings per share​ (EPS) value? A. The effect varies by industry. B. The effect varies by size of firm. C. There is no effect. D. It goes down. E. It goes up.

E. It goes up.

____________ can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits. A. Market targeting B. Target marketing C. Customer segmentation D. Product positioning E. Market segmentation

E. Market segmentation

Which statement is​ false? A. Sometimes firms will thus increase their treasury stock near the end of the​ quarter, or near the end of the​ year, to​ "artificially" inflate their EPS. B. Normally, in developing projected financial​ statements, the cash account is used as the plug figure. C. Another name for the balance sheet account—​additional-paid-in-capital—is capital surplus. D. A and B E. None of the above

E. None of the above

The corporate valuation formula for the net worth method is​ what? A. Additional paid in capital plus retained earnings minus​ (goodwill -​ intangibles). B. Net worth plus retained earnings​ + (goodwill​ + intangibles). C. Total​ owners' equity​ (SE) +​ (goodwill +​ intangibles). D. Additional paid in capital plus retained earnings minus​ (goodwill +​ intangibles). E. Total​ shareholders' equity​ (SE) minus​ (goodwill +​ intangibles).

E. Total​ shareholders' equity​ (SE) minus​ (goodwill +​ intangibles).