Strat Man Chap 8

88) What is the most common type of financial budget?

A) Cash

75) After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

A) Debt appears to be the best financing alternative.

93) Which item is not included in net worth?

A) Fixed assets

53) What percent of strategies formulated are successfully implemented?

A) Less than 10 percent

65) What entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry?

A) Positioning

76) What becomes a more attractive financing technique when cost of capital is high?

A) Stock issuance

102) The attitude of U.S. firms toward research and development is best described by which of the following?

A) The veil of secrecy is being lifted, resulting in more collaboration.

73) Which of the following is not true regarding stock issuances?

A) They are always better than debt for raising capital.

97) In the context of a balance sheet, goodwill represents

A) a premium paid over the book value of an acquisition.

78) A benefit of using projected balance sheets and income statements is that

A) an organization can compute projected financial ratios under various scenarios.

84) Retained earnings is obtained by subtracting

A) any dividends to be paid for that year from net income.

72) In the low earnings period, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

A) debt

61) Perhaps the most dramatic new market segmentation strategy is the

A) targeting of regional tastes.

5) All of the following are examples of marketing decisions that may require policies except:

A) to be a market leader or follower.

90) How should financial budgets be thought of?

B) As a method for obtaining the most productive and profitable use of an organization's resources.

74) What is the most widely used technique for determining the best combination of debt and stock?

B) Earnings per share/earnings before interest and tax analysis

63) Which variable would be considered part of the "product" element of the marketing mix?

B) Packaging

66) Which is not a required step in product positioning?

B) Serve two segments with the same strategy

69) Which of the following is true about two different market segments?

B) They usually require different marketing strategies.

95) The valuation of a firm's worth

B) requires both qualitative and quantitative skills.

70) Which of these is not a rule of thumb when using product positioning as a strategy-implementation tool?

C) "Try to serve more than one segment with the same strategy."

99) If an initial stock issuance is at or under $1 million, what is the average total cost paid to lawyers, accountants and underwriters?

C) 25 percent

86) Which of these is the most common type of budgeting time frame?

C) Annual

77) What is a drawback of using only equity to raise capital?

C) Dilution of the control of the company

60) Why is market segmentation an important variable in the strategy-implementation process?

C) It directly affects marketing mix variables

82) In preparing projected statements, to project cost of goods sold and the expense items in the income statement, which of these methods is recommended?

C) Percentage-of-sales method

94) Which method of determining a firm's net worth divides the market price of the firm's stock by the annual earnings per share, and multiplies this number by the firm's average net income for the past five years?

C) Price-earnings ratio method

59) Which of the following variables are not directly affected by market segmentation?

C) Process

85) In projected financial statements, what is used as a plug figure?

C) The cash account

92) Which of the following is not an accepted for determining a business's worth?

C) What the firm's return on investment has been.

98) A conservative rule of thumb is to establish a business's worth as ________ the firm's current annual profit.

C) five times

96) The Financial Accounting Standard Board (FASB) Rule 142 deals with

C) goodwill.

79) Projected financial analysis is an important strategy-implementation technique because

C) it allows an organization to examine the expected results of various actions and approaches.

100) R&D employees and managers perform all of the following tasks except:

C) researching resource availability.

67) Looking for a vacant niche helps a company determine

C) the best place to position a product.

89) Who has mandated that every publicly held company in the United States must issue an annual cash-flow statement in addition to the usual financial reports?

D) FASB

83) Which element in the projected income statement cannot be forecasted using the percentage-of-sales method?

D) Interest expense

80) What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches?

D) Projected financial statement analysis

64) Which variable would be considered part of the "place" element of the marketing mix?

D) Sales territory

62) Matching of which factors would allow factories to produce desirable levels without extra shifts, overtime or subcontracting?

D) Supply and demand

101) Which of the following is not a major approach to R&D?

D) To be a liquidator

87) If a firm incurs a loss during a particular year, or if the firm had positive net income but paid out dividends more than the net income, its retained earnings for that year will most likely be

D) a negative number.

57) Subdividing a market into distinct subsets of customers according to their needs and the way they buy and use a product or service is known as

D) market segmentation.

81) The first step in performing projected financial analysis is to

D) prepare the projected income statement.

68) Multidimensional scaling is used to determine

D) product positioning.

103) Information collection, retrieval, and storage can be used to create competitive advantages in ways such as

E) All of the above

54) What level of management is directly affected by strategy implementation?

E) All of the above

58) Why is market segmentation an important variable in strategy implementation?

E) All of the above

91) What is a limitation of using financial budgets?

E) All of the above

56) Which two variables rank as marketing's most important contributions to strategic management?

E) Market segmentation and product positioning.

71) Which of the following is not an example of a decision that may require finance/accounting policies?

E) To determine the amount of product diversification