Capsim Exam 1

Which financial obligation is best satisfied with Current Debt?

**NOT Paying for increased production capacity.

Assuming no additional product promotion, what percent of customers, reached through last year's marketing campaign will carry over into the current year?

67%.

Each segment places

a different emphasis on the 4 buying criteria.

Based on the example in the Student Guide, what additional awareness does a promotion budget of $1,500,000 buy?

36%.

Once you upload your official decisions during a round, how many times can you change them before the end of the round?

As many times as you want

Which of the following are not considered in the Fine Cut?

Automation

The segments are all drifting to the lower-right section of the perceptual map. Why does this drift take place?

Customers want smaller and faster products.

A bond with the number 12.6S05 indicates that:

the interest rate is 12.6%; due on December 31, 2005.

Last year your company built 1,500,000 units of product Able and sold 1,405,000 After 14 months in R&D, a revision of product Able is due out tomorrow, on January 2 (the first business day of this year) What will happen to the unsold inventory of 95,000 units of "old" product Able?

they'll be reworked to match the new specifications for product Able.

The relationship between promotion and sales budgets and sensor sales is generally...

a direct one.

If you purchase production capacity and automation:

it is available in the next year.

Inside each fine cut circle,

segments have an ideal spot where demand is at its highest.

The Low segment's ideal spot is

near the center of its circle.

The promotion budget affects:

awareness

There is ______ lag in buying new Capacity and ______ lag in changing Automation.

1 year; 1 year

If your short-term interest rate (the rate on your current debt) is 12.1%, then your bond rate (the rate on your long-term debt) is:

13.5% (1.4% higher than the current debt rate).

What percentage of additional awareness does the first $1,500,000 increase in promotion budget buy? (Hint: see curve on p. 13 of the Guide.)

36%

The Finance Department can use which of the following methods to acquire capital for company activities?

Current Debt, Stock Issues, Bond Issues and Profits.

If the previous year you reached 100% customer awareness in your company, this year what will you need to do to maintain this level?

I would scale back promotional expenditures to about $1,400,000 to maintain awareness.

How many assembly lines are there?

One for each product.

At the beginning of the simulation, how many assembly lines are there?

One line per company.

If your team decides to introduce a new product, when should capacity and automation be purchased?

One round prior to product release

If you or your team decides to introduce a new sensor product, when should capacity and automation be purchased?

One round prior to product release.

The two characteristics that the perceptual map evaluates are

Performance and Size.

If you are marketing to High Tech customers, which criteria are most important to them in order of importance?

Positioning, Age, Price, MTBF.

New products are created on which spreadsheet?

Research and Development

A firm's bond rating slips by 1 category for each ______ in interest

additional 0.5%.

Capital needed for company activities cannot be acquired through:

arbitrarily firing employees.

When purchasing Capacity and Automation, it becomes available,

at the beginning of the next year/round.

An increase in promotional budgets has:

diminishing returns become apparent at $2 million.

In order to achieve 100% accessibility, a team must:

have two products in the same segment.

A change in MTBF affects:

material cost.