KIN 3804 Final

c. Statement of Cash Flows

A report that tracks cash in and cash out of an organization and provides data as to whether a company has sufficient cash on hand to meet its debts and obligations is called the... a. Balance sheet b. Income Statement c. Statement of Cash Flows

visitors; leakages

A smaller defined impact area brings in more _____, but there are increased _____ to areas outside the impact area.

multiplier

A variable that helps researchers quantify indirect and induced economic impacts, by measuring the change in output for each and every industry as a result of the injection of one dollar of direct impact into any of those industries

d. through a lottery

According to List and Gneezy, one of the best ways to raise money is... a. by using attractive individuals to solicit funds b. through the internet c. through door-to-door selling d. through a lottery

b. Employment

According to the notes, what is the least reliable multiplier? a. Output b. Employment c. Income d. Transaction

d. step cost

According to your textbook, repairs and maintenance of sports facilities are what type of cost? a. fixed cost b. variable cost c. mixed cost d. step cost

d. Security

According to your textbook, which of the following costs are categorized generally as step costs? a. Arena Maintenance b. Part-time Wages c. Utilities d. Security

reserve clause

An agreement among owners that ties a player to a team in perpetuity.

d. Modified internal rate of return

As facility projects can often lead to non-normal cash flows, it is recommended that which budgeting method be used when developing a capital budget? a. Payback period b. Net present value c. Internal rate of return d. Modified internal rate of return

certificate of participation

Financial instrument that a government agency or a non-profit corporation sets up to build a facility; often sold to one or more financial institutions to obtain the initial capital for construction. Then, the agency or non-profit leases the facility either directly to the tenants or to a facility operator and uses the lease payments to pay it off.

c. the supply curve to shift to the left to achieve equilibrium between price and quantity

Higher input prices will cause... a. the supply curve to shift to the right to achieve equilibrium between price and quantity b. the demand curve to shift to the right to achieve equilibrium between price and quantity c. the supply curve to shift to the left to achieve equilibrium between price and quantity d. the demand curve to shift to the left to achieve equilibrium between price and quantity

displaced spending

Money spent by a local resident on an event that is assumed would have been spent elsewhere in the local economy if the event would not have occurred

a. Single Entity

One of the advantages of this type of league structure is the league can place players on preferred teams. a. Single Entity b. Distributed Club c. Single owner/private investor d. Multiple owners/publicly traded corporation

d. have a well thought out business plan

One of the key tips for seeking funding for your own sport business is to... a. be a billionaire b. give all of your friends positions within the new company c. have a sport management degree d. have a well thought out business plan

a. improve the stadium

One of the main reasons for selling equity in British soccer clubs has been to... a. improve the stadium b. attract a better head coach c. showcase the financial stability of the franchise d. compete against US franchises for fans

c. the ability to operate confidentially

One of the main reasons teams in North American professional sports leagues are not publicly traded is...? a. fan pressure b. SEC Requirements c. the ability to operate confidentially d. they would be unable to attract new fans around the world

c. Business Plan

One tip from Ralph Willis says that this document has to describe the company in detail includes historical financial performance, realistic projections of future performance, and includes key industry drivers. a. PS-22 b. Marketing Plan c. Business Plan d. Form S-1 from the SEC

a. Increase ticket prices

Suppose an athletic team's executives notice that the demand curve for their events shifted to the right. What should they do in regards to setting ticket prices to achieve equilibrium between price and quantity to react to the move? a. Increase ticket prices b. Hold prices constant c. Decrease ticket prices d. Cancel the season...too much economics

b. Jock Tax

The Phil Mickelson Phoenix Open Golf example mainly illustrates the type of tax sometimes called source income tax a. Federal Tax b. Jock Tax c. Caddie Tax d. Estate Tax

output; employment

The _____ multiplier measures the indirect and induced effects of an extra unit of direct spending on economic activity within the local economy while the _____ multiplier measures the number of full-time equivalent jobs supported in the local economy as a result of visitor expenditures.

construction impact

The amount of money that comes into a community during the construction phase of a building that would not otherwise have entered the community.

d. the return to single use facilities

The biggest difference in facilities today compared to 25-30 years ago is... a. Astroturf b. high-definition videoboards c. technology and communication d. the return to single use facilities

d. Staff cost

The biggest expense associated with developing, soliciting, and implementing sponsorship is... a. Opportunity cost b. Financial cost c. Unrelated business income tax d. Staff cost

a. the herd mentality

The concept of when people see other people of influence giving to a cause it increases the likelihood of contributing is known as... a. the herd mentality b. guilt c. advertising d. a well thought out fundraising plan

induced economic impact

The effect of direct and indirect economic impacts on earnings and employment.

psychic impact

The emotional impact on a community of having a local sport team or hosting national or international events.

b. Rate of Return

The gain or loss of an investment over a period of time is known as its... a. Present Value b. Rate of Return c. Stand Alone Risk d. Future value

b. Sum-of-years-digits

The method of depreciation that takes the non-linear loss of value into account is... a. Straight-line b. Sum-of-years-digits c. Double-declining balance d. Units of Production

c. Double-declining balance

The most aggressive form of depreciation for allocating loss of useful life to early years is... a. Straight-line b. Sum-of-years-digits c. Double-declining balance d. Units of Production

d. An exchange of mutual benefits

The most critical component of a sponsorship agreement is... a. Image enhancement b. Commercial advantage c. Business relationship d. An exchange of mutual benefits

leakage

The movement of money out of a geographic region.

efficiency principle

The notion that a tax should be easy to understand, simple for government to collect, low in compliance costs, and difficult to evade

price elasticity of demand

The percentage decrease in the number of units sold compared to the percentage increase in the unit price.

capture rate

The portion of an organization's spending that is spent locally

b. Real value

The purchasing power of a dollar is referred to as its... a. Nominal value b. Real value c. Present value d. Future value

c. Pittsburgh Pirates

The ratio exam examined the financial statements of which professional sports team? a. Pittsburgh Steelers b. Brooklyn Nets c. Pittsburgh Pirates d. Philadelphia Phillies

permanent seat license

The right to purchase tickets for a specific seat location, for the life of the facility, with fewer restrictions on exchange or sale than those for personal seat licenses.

tax increment financing

The use of only additional or new taxes generated from a certain source, such as property taxes, to help finance a sport facility.

public financing

The use of public funds to finance a project. For the construction of an arena or facility, tax revenues are typically used to retire debt service.

a. Sole proprietorships

The vast majority of for-profit businesses in the US operate as which of the following? a. Sole proprietorships b. General partnerships c. Subchapter S corporations d. Limited liability corporations

e. Gift

This type of financing includes charitable donations, either cash or in-kind, made to an organization and is the primary source of operating and investing income for major collegiate sports programs. a. Debt b. Equity c. Retained Earnings d. Government e. Gift

b. Time switcher

This type of individual changes the time he or she is coming to a community to coincide with an event being held in that community (i.e., LSU basketball game). If the university is performing an economic impact study of its basketball team, this individual would be classified as a... a. Incremental visitor b. Time switcher c. Casual visitor d. Reverse time switcher

c. Casual visitor

This type of individual comes to a community for one event while also attending a basketball game. If a university is performing an economic impact study of its basketball team, this individual would be classified as a... a. Incremental visitor b. Time switcher c. Casual visitor d. Reverse time switcher

b. Industry and Company

This type of risk outlined in your book arises from current economic conditions, political development, and inflation. a. External Business Activity b. Industry and Company c. Global

c. Global

This type of risk outlined in your book includes changes to regulations regarding import and export activities, expropriation, and changes in exchange rates. a. External Business Activity b. Industry and Company c. Global

casual visitor

Visitors attending a sporting event, who were already in town for a different reason.

incremental visitors

Visitors who came to town because of an event and would not have come to town otherwise

time-switcher

Visitors who would have come to town at another time, but opted to come to town during this time instead, in order to attend the event.

e. Collateral

What dimension of a person's credit, specified in the 5 C's of credit, deals with anything of value that can be pledged by the applicant to guarantee final repayment of a loan? a. Character b. Capital c. Capacity d. Condition e. Collateral

b. Capital

What dimension of a person's credit, specified in the 5 C's of credit, deals with the amount of equity the applicant will put into his/her own business? a. Character b. Capital c. Capacity d. Condition e. Collateral

a. Character

What dimension of a person's credit, specified in the 5 C's of credit, deals with the applicant's credit history and truthfulness? a. Character b. Capital c. Capacity d. Condition e. Collateral

e. Condition

What dimension of a person's credit, specified in the 5 C's of credit, deals with the applicant's primary opportunity to sell the lender on the value of the business? a. Character b. Capacity c. Collateral d. Capital e. Condition

c. Capacity

What dimension of a person's credit, specified in the 5 C's of credit, deals with the lender's determination about whether the potential business has the right management team and philosophy? a. Character b. Capital c. Capacity d. Collateral e. Condition

b. Overestimation is never corrected or reviewed

What is one of the major disadvantages to the incremental budgeting approach? a. Lots of internal politics b. Overestimation is never corrected or reviewed c. Staff involved in early stages of budgeting process d. Time consuming

d. Small Business Association

What is the government source that was covered in the lecture slides that assists all small businesses in obtaining various types of loans and other capital efforts. a. Women's Prequalified Loan Program b. Department of the Treasury c. Fort Knox d. Small Business Association

a. The PPM ignores the time value of money

What is the major disadvantage to the payback period method (PPM)? a. The PPM ignores the time value of money b. The PPM requires a detailed prediction of the project's future cash flows c. Multiple internal rates of return may exist that the PPM cannot analyze d. The PPM is not easy to calculate or understand

c. Consumer Price Index

What is the result of a calculation based on the prices of roughly 80,000 goods and services in more than 200 categories which reflects the current lifestyle of the typical American consumer to determine the overall change in real prices during a period. a. Consumer Confidence Index b. Federal Funds Rate c. Consumer Price Index d. Purchasing Power Parity

d. Luxury Seating

What piece of real estate within the facility is the single largest change in facility management and design? a. Seating Deck b. Concourses and Entrances c. Naming Rights d. Luxury Seating

Swimming

What recreational activity is second on popularity only to walking in the U.S.?

c. accrued transaction

When Nike accounts money from a distributor such as Foot Locker when it earns the money not when actual cash is exchanged, this transaction is known as a... a. cash transaction b. illegal transaction c. accrued transaction d. opportunity transaction

d. an opportunity cost

When the citizens of St. John's, Newfoundland, decided to raise their taxes to fund a new arena for minor hockey rather than to raise taxes for improving the city's infrastructure, the missed chance to improve the infrastructure is known as... a. a marginal cost b. a fixed cost c. a variable cost d. an opportunity cost

c. Net present value

Which capital budgeting method is preferred by most managers as it analyzes cash flows rather than net earnings? a. Payback period b. Discounted payback period c. Net present value d. Modified internal rate of return

Spain

Which country's entire team was barred from competing at the Paralympics in Sydney because it was caught entering non-handicapped athletes into the games?

1960s

What decade saw names first appear on the backs of NFL jerseys?

operations impact

The economic impact of a facility generated through its daily operation.

horizontal equity

The idea that those with similar incomes should pay similar amounts of tax

personal seat license

The right to purchase tickets for a specific seat location, sometimes limited to a period of time that may not match the expected lifespan of the facility.

multiplier effect

The ripple effects of initial spending (direct impacts), consisting of indirect and induced impacts.

securitization

The use of contractually obligated future revenue as collateral for issued debt.

d. St. Louis Spirits

The owners of which franchise agreed to a perpetuity when they negotiated to fold their team after the merger of the ABA with the NBA? a. Denver Nuggets b. San Antonio Spurs c. Indiana Pacers d. St. Louis Spirits

vertical equity

The idea that a tax should not cause poorer persons to bear a disproportionate share

benefit principle

The idea that those who benefit from a particular project ought to be the ones taxed to pay for it

economic impact

The net economic change in a host community resulting from spending attributed to an event or facility.

revenue bonds

A form of public finance that is paid off solely from specific, well-defined sources, such as hotel taxes, ticket taxes, or other sources of public funding.

public good

A good that is non-rival and non-excludable.

inheritance (death) tax

A levy upon an estate applied when the owner dies.

salary arbitration

A process whereby an independent judge determines whether the salary that a team submits for a player or the salary that the player requests will be paid.

lease revenue bond

A version of revenue bond in which the revenue stream backing the payment of the bonds is a lease.

b. Program planning budgeting systems

This budgeting system is associated with output budgeting in which specific goals and objectives form the framework for a strategic, goal oriented budgeting process. a. Incremental budgeting b. Program planning budgeting systems c. Zero-based budgeting d. Modified zero-based budgeting

a. Labor Demand

This curve shows the amount of labor an individual firm is willing to purchase at every wage, holding constant other factors. a. Labor Demand b. Lorenz c. Labor Supply d. Laffer

a. Strategic Planning Horizon

This distinct budgeting time period extends far into the future and focuses on long-term aspirations of the sport organization. a. Strategic Planning Horizon b. Business Planning Horizon c. Budget Time Horizon

c. Budget Time Horizon

This distinct budgeting time period is the immediate future (next 12 months) that can be predicted with a reasonable degree of certainty. a. Strategic Planning Horizon b. Business Planning Horizon c. Budget Time Horizon

c. Bill Veeck

This owner's original tax plan was altered by the Omnibus Tax Act of 2004, permitting a new owner to deduct 100% of the purchase price of the franchise over a 15-year period. a. George Steinbrenner b. Al Davis c. Bill Veeck d. Art Rooney

1. Number of Visitors 2. Average Spending per Visitor 3. Multiplier

Three components of economic impact:

Sports Broadcasting Act (SBA) of 1961

A 1961 law providing an anti-trust exemption that permitted pro sport leagues to sell their TV rights as a league package.

a. Risk premium

Because cash is worth more to an investor than the same cash in the future, THIS compensates investors for risking today's cash. THIS is defined as the difference between the rate of return for a risky investment and the risk-free rate. a. Risk premium b. Consumer Price Index c. Coefficient of Variation d. Stand-Alone Risk

positive externalities

Benefits produced by an event that are not captured by the event owners or sport facility being used; also termed overflow benefits.

asset-backed securities

Bonds guaranteed by a franchise's COI or expected revenue streams.

general obligation bond

Bonds that last about 20 years, secured by tax revenues and the issuing entity's ability to impose new taxes, with interest paid each year directly out of the general funds of a local government.

a. Zero-based

Decision units, base budget, reduced level budgets, and decision packages are key elements of what budgeting approach? a. Zero-based b. Incremental c. Program Planning d. Performance

non-excludable

Describes a good that a team cannot prevent someone from consuming or enjoying

non-rival

Describes a good that can be consumed by one person without preventing another person from consuming it

indirect economic impact

Economic impact that represents the circulation of initial expenditures (direct impacts) in an economy.

b. The percentage of public money has decreased from the Gestation era to the Fully Loaded Era

Examining the four eras of facility financing, what is the trend regarding the percentage of public investment in all sport facilities? a. The percentage of public money has increased from the Gestation era to the Fully Loaded Era b. The percentage of public money has decreased from the Gestation era to the Fully Loaded Era c. There has been no change in the percentage of public dollars

direct impact

Expenditures on a project or event that contribute to economic impact.

5: 1991, 1993, 1996, 1997, and 2000

How many CWS titles did Skip Bertman win as head coach of LSU?

reverse time-switcher

Local residents who leave town during an event period because of the event.

payments in lieu of taxes (PILOT)

Payments that are made to a local government instead of paying franchise, property, or sales taxes.

1. Seating Deck 2. Luxury Suites 3. Entrances & Concourses 4. Scoreboards 5. Playing Surfaces 6. Naming Rights

Six distinct pieces of real estate within stadiums that can maximize revenue flows

incremental spending

Spending above and beyond what a person would have spent had the event not taken place

a. Accounts Receivable

Which of the following is an example of a current asset? a. Accounts Receivable b. Land c. Buildings d. Vehicle

contractually obligated income

A revenue stream that a team receives under multi-year contracts. These revenue sources may serve as collateral for loans

c. Efficiency Principle

Which of the following equity principles concerns is described as the notion that a tax should be easy to understand, simple for government to collect, low in compliance costs, and difficult to evade? a. Vertical Equity b. Horizontal Equity c. Efficiency Principle d. Benefit Principle

d. Modified zero-based budgeting

Which of the following forms of budgeting is preferred in sport, such as in the case of Southern Ohio University, as it begins with a floor of expenses while also using cost behavior and cost identification techniques? a. Incremental budgeting b. Program planning budgeting c. Zero-based budgeting d. Modified zero-based budgeting

d. Tax abatements

Which of the following is an indirect source of public financing? a. Sales tax revenue b. Sin tax revenue c. Tourism tax revenue d. Tax abatements

d. Units of Production

Which of the following is an indirect source of public financing? a. Straight-line b. Sum-of-years-digits c. Double-declining balance d. Units of Production

a. Inflation rate

Which of the following is calculated by investigating changes in the Consumer Price Index (CPI)? a. Inflation rate b. Interest rate c. Business activity rate d. Discount rate

b. Conduct a post-audit analysis

Which of the following is the final step in the capital budgeting process? a. Select the capital budgeting method b. Conduct a post-audit analysis c. Determine the incremental cash flow of a project d. Determine the initial cost of the project

Michael Jordan

Which sports figure holds the record for appearing the most times on the cover of Sports Illustrated?

Charles McClendon—137 wins from 1962-1979

Who is LSU's all time winningest football coach in terms of number of wins?

Ryan Fitzpatrick

Who is the only modern-era quarterback from Harvard to ever go on to play in the NFL?

Steffi Graf

Who is the only tennis player to have won each of the four grand slam events at least four times?

young professionals; baby boomers

With luxury seating and other amenities within the stadiums, downtown locations have been enhanced particularly for two specific non-business market segments: _____ and _____

property; vertical

_____ taxes are the "backbone of local government" and are consistent with both _____ equity and the benefit principle.

private financing

Financing that does not use public dollars.

leakages

The movement of money out of a geographic region