Business final 2
Which of the following statements is true of the common stockholders' right to a residual claim on assets?
A firm must pay any back taxes, legal expenses, wages owed to workers, and debts owed to creditors before the owners get anything.
When people use the term "corporation" without specifying which type, they are generally referring to a(n) _____.
C corporation
Signork, an accounting firm, offers benefits such as higher education sponsorships, annual fixed bonuses, commissions, pension plans, and term insurance plans to its employees. The employees are given a set amount to spend and allowed to choose any of the benefits within that set amount. In this scenario, which of the following does Signork offer to its employees?
Cafeteria-style benefits
In the context of the barriers to international trade, which of the following is the best way to jump over sociocultural barriers?
Conducting thorough customer research
In the context of the social environment of business, which of the following is likely to happen as the American population rapidly ages?
Creative companies will reimagine their current products to serve older clients.
Ashton is working on a project at PowerTek Inc., a well-known multinational corporation. He uses capital budgeting to estimate the project's future cash flows. He finds that the present value of the estimated future cash flows is greater than the cost of the project. How likely is he to gain approval from the board?
He will quite certainly gain approval since the project has a positive net present value.
Documents stored on the World Wide Web are written and linked together using _____.
Hypertext Markup Language (HTML)
Which of the following is true of financial diversification?
Investing in a large number of individual securities is time consuming than investing in exchange-traded funds.
Which of the following statements is true of service utility?
It adds value by providing fast, friendly, personalized assistance.
Which of the following statements is true of trade credit?
It is granted by suppliers after evaluating the creditworthiness of a firm.
Which of the following statements is true of a flextime plan?
It makes less sense in jobs that entail extensive teamwork.
In the context of retail stores, which of the following statements is true of a convenience store?
It sells a small range of everyday and impulse products at easy-to-access locations with long hours and quick checkout.
In the context of fundamental principles of a free market system, which of the following statements is true of a demand curve?
It shows the relationship between price and quantity from a customer standpoint.
Which of the following statements is true of business emails?
Response to emails should be as prompt as possible.
Identify a true statement about loss-leader pricing.
Retailers place a handful of items that are priced temporarily below cost at the back of their store.
Which of the following statements is true of the members of a distribution channel?
Some distributors act as both wholesalers and retailers.
Despite not having achieved his annual targets, Ted, a bank salesman, got high scores for his performance appraisal because his manager is fond of him. Which of the following common appraisal goofs did Ted's manager make?
The "me filter"
Leading-edge companies have focused on customer satisfaction, with a goal to develop long-term, mutually beneficial relationships with customers. Which of the following dimensions of a business environment does this illustrate?
The competitive environment
Marina, a garments manufacturing company, signed a contract with Tertch Tex, a textile company, to receive 2 million pounds of yarn at a rate of $2 per pound. However, Tertch Tex hikes up the price to $5 per pound just before the day of delivery. Marina files a lawsuit against Tertch Tex for breaking an enforceable contract and receives $100 million in compensation. In this context, which dimension of the business environment is affected the most?
The economic environment
Which of the following dimensions of a business environment is specifically highlighted when stock markets lose a major portion of their value and when huge, venerable institutions collapse financially?
The economic environment
Spearhead Flight Academy uses flight simulation games to train its students in the basics of aviation. It uses these games to make its students more effective and efficient. In addition, it also offers six months of flight training. In this context, which of the following dimensions of the business environment is affected the most?
The technological environment
Which of the following is true of current assets?
They are resources that a firm expects to use up within a year.
Which of the following is a recent advancement in the Western European countries that developed powerful socialist economies in the decades after World War II?
They have imposed stiff austerity measures to control government spending.
Small firms tend to be effective innovators for a number of reasons. Most importantly, their very reason for being often ties to:
a brand-new idea.
Less savvy marketers frequently fall into one of two traps—overpromising or underpromising—when trying to _____.
achieve customer satisfaction
Mark and Augustine are employees of an advertising firm. Following a personal disagreement, Augustine steals Mark's idea for an advertisement and presents it as his own in a meeting. In this scenario, Augustine is guilty of _____.
an ethical lapse
Jim, the CEO of a management firm, needs to deliver a presentation on work ethics to his employees. He has a thorough knowledge of his employees' educational backgrounds. He uses this knowledge to create a presentation that would convey the message to his employees. In the given scenario, which of the following communication guidelines is Jim following?
analyze your audience
GRT Logistics takes the help of the latest technology to get its processes done. It uses fully programmed systems for which human control is not required at all. These systems operate the machinery and equipment on their own to perform a variety of tasks. In this scenario, GRT Logistics has _____ its processes.
automated
A _____ refers to the overage that occurs when more money flows into a nation than out of that nation.
balance of payments surplus
Drumming one's fingers on a desk while talking can distract the audience and create a _____ to communication.
body language barrier
An American petroleum company is facing legal action because it discharges a significantly higher level of greenhouse gases than the level permitted by the Environmental Protection Agency. In this scenario, the company is guilty of increasing its _____.
carbon footprint
Donton Inc. dominates its market section by offering a wide range of office supplies that includes printers, furniture, and cleaning supplies to final consumers. It is evident that Donton Inc. is a _____.
category killer
The various ways in which a message can be sent, ranging from one-on-one in-person meetings to Internet message boards, are called _____.
communication channels
In the context of economic systems, the two key phases of a business cycle are:contraction and expansion.
contraction and expansion.
Glinda goes to the supermarket for her monthly grocery shopping. As she waits in the line at the cash register, she sees her favorite kiwi-flavored candies on a stand and puts some into her shopping cart. In the context of product classifications, the candies purchased by Glinda are _____.
convenience products
William holds shares of preferred stock in a telecommunications company. However, given the lucrative benefits that come with holding common stock, William exchanges his shares of preferred stock with shares of common stock at the conversion price. In this scenario, William was holding _____ in preferred stock.
convertible securities
Distributors that provide service utility typically:
create a loyal base of customers.
Delvry Inc. is a solid fuel supplier. It supplies coal to different thermal power plants. The company takes legal possession of the coal, and they hire outside transporters to aid the delivery process. In this scenario, Delvry Inc. is a(n) _____.
drop shipper
Judith plans to start a prosthetic company to help physically challenged people avail prosthetics at affordable prices. She researches and develops a cost-effective way of crafting durable prosthetics. In the context of factors of production, the given scenario exemplifies the concept of _____.
entrepreneurship
When a company issues and sells new stock or uses retained earnings to meet its financial needs, it is using _____.
equity financing
Amanda, a primary school teacher, puts in extra effort in her teaching in a particular term. She is aware that if her class performs well, she will be nominated for the award that is received by the teacher whose class scores the highest in the state. This scenario is reflective of the assumptions of the _____ theory.
expectancy
A(n) _____ makes a profit by purchasing the receivables of a firm at a discount and collecting the full amount from the firm's customers.
factor
A firm's operating budget represents the firm's overall plan of action for a specified time period.
false
According to Maslow's hierarchy of needs theory, healthcare plans and life insurance serve to satisfy the esteem needs of employees.
false
An advantage of an expert system is that it is capable of solving a wide variety of problems, including those that are quite different from the problems it was originally designed to solve.
false
An ethical dilemma involves clear misconduct at the workplace.
false
Based on statistics from the U.S. Small Business Administration (SBA), small businesses account for 78% of all private sector employees.
false
Benny-Duke Inc. reported a net income of $7 million but paid no dividends to its shareholders. The shareholders should sue the company for failure to provide a return on their equity investment.
false
Contingent workers are workers who expect full-time jobs.
false
In business-to-business (B2B) e-commerce, customers usually do little or no research before making a purchase.
false
In the context of e-commerce, you can tell that a site on which you are doing business is using a secure socket layer (SSL) if the URL of the site begins with httpw://.
false
In the context of the history of American business, the industrial revolution era encouraged workers to take individual ownership and personal pride in the production process.
false
In the context of the legal and ethical dimensions of business conduct, practicing collusion with competitors is legal but unethical.
false
Organization charts help managers understand the financial situation of the company.
false
Rudy owns a small metal fabrication business that employs 23 workers. As the owner of a small business, one of the major advantages that Rudy enjoys while competing with larger firms is reduced burden of complying with government regulations.
false
Small businesses generate 50% of total employment in American inner cities.
false
Speed-to-market is the rate at which a company's competitors copy its product innovations.
false
The Securities and Exchange Commission (SEC) bans publicly traded corporations from making comparative financial statements.
false
The difference between the prices at which securities are bought and sold is called a thrift.
false
The term _____ refers to the use of debt to meet a firm's funding needs.
financial leverage
During the baseball season, the workers at Arenaz Stadium use mowing equipment to mow the baseball field. To ensure that the infield surface stays smooth and consistent, they use nail drags. The given scenario exemplifies the use of a _____.
fixed position layout
Verti, a North American country, engages in business with Jerg, a South American country. Verti imports agricultural products from Jerg, whereas Jerg outsources its technological operations to workers in Verti. The two nations are able to carry out these business transactions with minimal tax implications. The given scenario most likely exemplifies the concept of _____.
free trade
_____ refers to the unrestricted movement of goods and services across international borders.
free trade
Melvin is the co-owner of a gadget store. Unlike his partner who only provides monetary support to the business, Melvin is responsible for handling the daily operations of the store and bears complete personal liability for any debts incurred by the store. Melvin and his partner, however, share the profits of the store equally. In this scenario, Melvin is a _____.
general partner
Wendy quit her job as the regional manager of Rubicon Inc., a multinational company, and started her own fashion boutique. Within two years, she began earning more than what she earned during her tenure at Rubicon. Which of the following advantages of entrepreneurship is highlighted in the given scenario?
greater financial success
Robert started his company in his parents' garage because he could not afford to rent an office space. Most of his finances were spent on procuring the essential items to set up his company. As a result, he was able to save funds for the future. The opportunity of _____ is highlighted in the given scenario.
having lower overhead costs
In the context of the legal and ethical dimensions of business conduct, embezzling money is:
illegal and unethical
Unlike the debt in a firm's capital structure, the equity in a firm's capital structure:
imposes no required payments.
A severe cyclone causes substantial damage to a brick manufacturing company's production equipment. As a result, the company spends a sum of $25,000 to repair the equipment. Given this information, the sum of $25,000 that the company spends is its _____.
indirect cost
The U.S. government uses the consumer price index (CPI) and the producer price index (PPI) to evaluate:
inflation
In the context of the barriers to international trade, the term _____ refers to a country's physical facilities that support economic activity.
infrastructure
Futures Life Insurance is an insurance company in South Africa. The insurance company uses its large pool of financial capital, which it accumulates by collecting premiums from its policyholders, to purchase corporate stocks of different multinational companies. In this scenario, Futures Life Insurance is a(n) _____.
institutional investor
In the context of the various strategies for investing in securities, the problem with market timing is that:
it is tough to consistently identify the timing and direction of changes in stock prices.
Ponlinaytion, a clothing company, imports its raw materials from different countries. To cover the cost of expensive raw materials, Ponlinaytion takes a yearly loan of $5 million from Heritage Rimier, a finance company. The remaining budget is covered by the company itself. The given scenario indicates that the firm most likely relies on measuring _____ to decide how it finances its overall operations and growth by using different sources of funds.
leverage ratios
Calidasth is a company that sells cosmetic products. Its retail outlets offer discount sales at the end of every season. In the context of customer relationship management, Calidasth most likely establishes _____ with its customers.
limited relationship
Transcone is an independent distributer that distributes home décor related products to various retailers. The company takes legal possession of the goods it distributes. It warehouses the products and ships them to the retailers, but it does not provide credit or marketing assistance. It is evident that Transcone is a(n) _____.
limited-service merchant wholesaler
_____ is the profit or loss a firm earns in the time period covered by the financial statement that reports the revenues and expenses.
net income
In the context of Maslow's hierarchy of needs theory, the scenario that reflects the fulfillment of the self-actualization needs of an employee is him or her:
participating in a campaign to feed the poor.
Ruben owns an astronomy-themed restaurant. The entire restaurant resembles a planetarium. He has also installed a projector that transforms the ceiling into a night sky. Ruben used most of his savings to fund this venture and also borrowed funds from his friends and family. In the given scenario, Ruben used _____ to fund his business.
personal resources
All the airlines that fly to the island country of Klerwada distribute tourist information pamphlets in their flights. These pamphlets are prepared by the tourism ministry of Klerwada to attract people to explore tourist destinations. Which of the following marketing strategies does this scenario best illustrate?
place marketing
In the context of business product categories, marketing of raw materials primarily emphasizes:
price and service
In an effort to expand its business, music retailer Musow offers DVD rentals online. In order to understand the trends in consumer interest, Musow has decided to evaluate data of the hyperlinks that customers click when they visit its website. This is an example of how a company can obtain _____.
primary data
Luis runs a bakery that offers only takeaway service. His customers visit his residence and watch him prepare their order. They also get an opportunity to bring their cake designs and help Luis prepare the desired cake. As a result, he knows most of his customers well. The opportunity of _____ is highlighted in the given scenario.
providing personal customer service
In the context of the evolution of marketing, marketers of the _____ believe that satisfied customers can develop into advocates for businesses by becoming powerful generators of positive "word-of-mouth."
relationship era
In private placements, _____.
securities that haven't been registered with the Securities and Exchange Commission can only be sold to other accredited investors
In the context of consumer product categories, most people perceive _____ as being so important that they are unwilling to accept substitutes.
specialty products
_____ for a product includes not only its distribution channels but also the string of suppliers who deliver products to the producers.
the supply chain
The management of a telecommunications company informs the members of its sales team that if they continue to underperform, the management will have no other option but to downsize the team. In this scenario, the approach adopted by the management reflects the assumptions of _____.
theory x
Miguel is one of the managers in a food preservative manufacturing company. He, along with a few other managers of his rank, engages in the strategic planning for the company every five years. In the context of managerial planning, Miguel is a _____ manager.
top-level
A marketing plan is a formal document that defines marketing objectives and the specific strategies for achieving those objectives.
true
After defining the mission of an organization, the next step in strategic planning is to evaluate the organization's competitive position.
true
Agents and brokers facilitate transactions in exchange for commissions.
true
An effective business plan is usually 25 to 50 pages long.
true
Globalization has made ethics and social responsibility complicated for workers at every level.
true
Holding large inventories provides protection against stock-outs and lost sales.
true
The price of a product must be relative to the benefits of that product.
true
To create meaning and urgency, a company's strategic goals should be linked to a specific deadline.
true
Candice is an entrepreneur who mostly communicates with her clients over emails. Lately, however, she has found it difficult to locate legitimate email messages in her inbox. This is because of the numerous unsolicited commercial emails that clutter her inbox. To prevent this from occurring in the future, Candice should _____.
use a spam filter
When using block paragraphs in messages, one should:
use single spacing
In the context of software, _____ is designed for a specific industry or profession.
vertical applications software
