Practice Questions
57. Eight machines can produce 360 bottles per hour . If all the machines work at the same rate , how many bottles could 5 such machines produce in 3 hours ? ( a ) 675 ( b ) 790 ( c ) 1,850 ( d ) 5,300
( a ) Eight machines produce 360 bottles per hour So , one machine produces 360 / 8 = 45 bottles per hour Five machines produce 45 * 5 = 225 bottles per hour So , five machines production in three hours = 225 * 3 = 675
49. A stock expected to pay a 1.00 dividend next year with a cost of capital 14 % and zero growth rate would have a price of : ( a ) 7.14 ( b ) 6.75 ( c ) 11.9 ( d ) 6.13
( a ) Share Price = Next year dividend / ( cost of capital - growth rate ) Share Price = 1.00 / ( 0.14-0 ) Share Price = 7.14
90. If your company's current assets are $ 40 million and current liabilities are $ 48 million what is the current ratio ? ( a ) 0.83 ( b ) 0.88 ( c ) 0.90 ( d ) 1.00
( a ) Current Ratio = Current assets / Current liabilities Current Ratio = $ 40 / $ 48 = 0.83
42-44 Suppose that in 1995 the price billion . The corresponding numbers for 1996 index ( base year 1992 ) was 110 and the income was $ 700 were 120 and $ 800 billion . 44. Inflation during 1996 was : ( a ) less than 10 % ( b ) 10 % ( c ) more than 10 % but not more than 20 % ( d ) more than 20%
( a ) Current year inflation = ( current price index / last year price index ) - 1 Inflation = ( 120/110 ) -1 Inflation = 1.0909-1 = 0.0909 9.09 % So , it is less than 10 %
Suppose that in 1995 the price index ( base year 1992 ) was 110 and the income was $ 700 billion . The corresponding numbers for 1996 were 120 and $ 800 billion . 42. 1996 income expressed in 1992 dollars is : ( a ) less than $ 600B ( b ) $ 600B or more but not more than $ 700B ( c ) more than $ 700B but not more than $ 800B ( d ) more than $ 800B
( b ) Current year = 1996 Base year = 1992 Current price index = 120 So , Current price index / base price index = current income / current year income expressed in base year 120 / 100 = 800 / current income expressed in base year So , 1996 income expressed in base year numbers would be = 100 / 120 * $ 800 = $ 666.67 So , more than $ 600 , but less than $ 700 .
51. A budget was estimated by a company for producing 500 C's and 300 D's for the coming next year . D's usually take twice the time to be made as it takes for C's. Expected total fixed overheads are $ 102,000 . Cost relating to C's are as such : Material 3000 Kg $ 24000 Labor 2000 hours $ 40000 Fixed overhead are to be absorbed on an hourly basis . Some of the material goes to waste which is estimated to be about 10 % of the material purchased . Absorption cost per unit of C is ? ( a ) $ 225.52 ( b ) $ 226.05 ( c ) $ 260.30 ( d ) $ 260.83
( b ) Material Cost Per Kg = $ 24000 / 3000 = $ 8 Material Needed for C = 3000 Kg , Expected wastage 10 % of the purchase . So material need to be purchased for C = 3000 / ( 1-10 % ) = 3333.33 Total Material Cost = 3333.3333 * $ 8 = $ 26667 Material cost per unit = $ 26667 / 500 = $ 53.33 Labor Cost Per Unit = $ 40000 / 500 = $ 80 Total Fixed head cost = $ 102,000 Total Hours per Unit product for C = 2000 / 500 = 4 Hour Total Hours per Unit product for D = 4 * 2 = 8 Hour Total Hours worked for C = 4 * 500 = 2000 Hours Total Hours worked for D = 8 * 300 = 2400 Hours Fixed cost per hour = $ 102,000 / ( 2000 + 2400 ) = $ 23.18 Fixed cost for C = $ 23.18 * 2000 = $ 46363 Fixed cost per Unit = $ 46363 / 500 = $ 92.73 Absorption Cost per Unit = Material cost per unit + Labor cost per unit + Fixed Cost per Unit Absorption Cost per unit = $53.33+$80+$92.73 = $226.05
54. In your duties as a manger providing financial statement analysis to your firm's executives you were asked to provide a vertical analysis . If the cost of goods was rounded to $ 240,000 and the firm's net sales were $ 480,000 what rounded percentage outcome of the vertical analysis would you present to your executives ? ( a ) 40 % ( b ) 24 % ( c ) 50 % ( d ) 20 % 55. For the week ending June 30 , Sara Workmann completed the following number of pieces : Monday 53 ; Tuesday 56 ; Wednesday 49 ; Thursday 54 ; and Friday 52. The piece rate is $ .75 . Find her total wages . ( a ) $ 216.15 ( b ) $ 198.00 ( c ) $ 198.75 ( d ) $ 199.56
( b ) Total Wages = Total hours worked * rate Total Hours worked = 53 + 56 + 49 + 54 + 52 = 264 Rate = $ 0.75 Total Wages = 264 * $ . 75 = $ 198
102. You own 1,000 shares of stock in Beal's Corporation . You will receive a $ 0.75 per share dividend in one year . In two years , Beal's will pay a liquidating dividend of $ 40 per share . The required return on Beal's stock is 16 percent . Suppose you want only $ 190 total in dividends the first year , show how you can accomplish this by creating homemade dividends . Your total dividend amount in year 2 will be _______? ( a ) $ 40,655.7 ( b ) $ 40,649.6 ( c ) $ 41,678.7 ( d ) $ 42,675.9
( b ) Price of Share today = expected present value of all future cash flow Expected cash flow in one year = $ 0.75 per share PV of expected cash flow in one year = $ 0.75 / 1.16 = $ 0.647 Expected cash flow in second year = $ 40 per share PV of expected cash flow in second year = $ 40 / ( 1.16 ) ² = $ 29.726 Price of stock today = $ 0.647 + $ 29.726 = $ 30.373 So , if I only $ 190 dividend in first year , that would make $ 190 / 1000 = $ 0.19 dividend / Share Using the same price today , Price of stock today = PV of expected cash flow in first year + PV of expected cash flow in second year $ 30.373 = ( $ 0.19 / 1.16 ) + ( D / 1.16² ) $ 30.373 = $ 0.1637 + ( D / 1.3456 ) D = ( $ 30.373- $ 0.1637 ) * 1.3456 = $ 40.649 So , dividend on 1000 Shares would be $ 40.649 * 1000 = $ 40,649
58. Amy's Family Lite Yogurt Company sells two popular favors , vanilla and almond . On Monday , the ratio of vanilla cones sold to almond cones sold was 2 to 3. If the business had sold 4 more vanilla cones , the ratio of vanilla cones sold to almond cones sold would have been 3 to 4. How many vanilla cones did the store sell on Monday ? ( a ) 33 ( b ) 32 ( c ) 42 ( d ) 43
( b ) Assume store sold 2x vanilla cones on Monday , So , almond cones sold were 3x If store had sold 4 more vanilla cones then sold vanilla cones would be 2x + 4 and ratio would have been 3 to 4 . So , using the equation (2x + 4)/3x = 3/4 Using the crossing mehtod 4*(2x+4)=3*3x 8x+16=9x X=16 Number of vanilla cones sold on Monday = 16*2 = 32
38. Suppose a supplier gives a credit terms of " 2/10 , net 40 " . What would the approximate cost the buyer will bear by not taking the discount and paying at end of credit period ? ( a ) 18.6 % ( b ) 24.3 % ( c ) 24.8 % ( d ) 30.0 %
( c ) Cost to the Buyer = Discount % / ( 100 - Discount % ) x ( 365 / ( Full allowed payment days - Discount days ) ) Cost to the Buyer = 2 % / ( 100 % -2 % ) x ( 365 / ( 40-10 ) ) Cost to the Buyer = 2% / 98% * (365/30) Cost of the Buyer = 0.0204 * (365/30) = 24.83%
53. The following are the results for the last year's production : Overhead budgeted = $ 8000 Production budgeted = 4000 units Actual overheads = $ 8500 Actual production = $ 3800 What is under / over absorption ? ( a ) $ 500 under absorption ( b ) $ 500 over absorption ( c ) $ 900 under absorption ( d ) $ 900 over absorption
( c ) Budgeted Per Unit overhead = $ 8000 / 4000 = $ 2 Actual Production = 3800 units Budgeted overhead on Actual Production = 3800 * $ 2 = $ 7600 Actual overhead = $ 8500 As budget is lower than actual so it would be under absorption. Under absorption = $ 8500 - $ 7600 = $ 900
54. In your duties as a manger providing financial statement analysis to your firm's executives you were asked to provide a vertical analysis . If the cost of goods was rounded to $ 240,000 and the firm's net sales were $ 480,000 what rounded percentage outcome of the vertical analysis would you present to your executives ? ( a ) 40 % ( b ) 24 % ( c ) 50 % ( d ) 20 %
( c ) COGS Vertical Analysis = Cost of Goods Sold / Net Sales COGS Vertical Analysis = $240,000/$480,000 = 50%
59. Your discount carpet business normally sells all of its merchandise at a discount of 10 % to 30 % off the suggested retail price . If , during a special promotional sale , an additional 20 % were to be deducted from the discounted price , what would be the lowest possible price of an item costing $ 260 before any discounts ? ( a ) $ 192.00 ( b ) $ 135.60 ( c ) $ 145.60 ( d ) $ 152.45
( c ) Lowest possible price = Highest discount Highest discount rate = 30 % So , Price before any discount = $ 260 First highest discount = 30 % Price after first discount = $ 260 * ( 1-30 % ) = $ 182 Additional discount rate = 20 % Price after additional discount = $ 182 * ( 1-20 % ) Price after additional discount = $ 145.60
56. Your store sells a six - pack of soda pop for $ 2.70 . This represents a saving of 10 % off the individual price of a can of soda pop . Your regional manager wants you to sell individual cans without the 10 % saving , so what would be the price a single can of soda pop ? ( a ) $ 0.40 ( b ) $ 0.35 ( c ) $ 0.50 ( d ) $ 0.55
( c ) Price of six cans = $ 2.70 Price of single can = $ 2.7 / 6 = $ 0.45 Saving = 10 % So , price without saving = price with saving / ( 1 - saving rate ) Price without saving = $ 0.45 / ( 1-0.1 ) = $ 0.5
Suppose that in 1995 the price index ( base year 1992 ) was 110 and the income was $ 700 billion . The corresponding numbers for 1996 were 120 and $ 800 billion . 43. 1996 income expressed in 1995 dollars is : ( a ) less than $ 600B ( b ) $ 600B or more but not more than $ 700B ( c ) more than $ 700B but not more than $ 800Bd ( d ) more than $ 800B
( c ) So , current price index / 1995 price index = current income / current income expressed in 1995 . 120/110 800 / current income expressed in 1995 Current income expressed in 1995 = $ 800 * 110/120 = $ 733 So , it is greater than $ 700 , but less than $ 800
50. If the equity in total capital is 1/3 debt is 2/3 and return on equity is 15 % , with debt of 10 % , and corporate tax of 32 % . What is the WACC ? ( a ) 10.53 % ( b ) 7.533 % ( c ) 9.533 % ( d ) 11.350 %
( c ) WACC = ( equity weight * cost of equity ) + ( debt weight * cost of debt * ( 1 - tax rate ) ) WACC = ( 1 / 3 * 15 % ) + ( 2 / 3 * 10 % * ( 1-32 % ) ) WACC = 5 % + 4.53 % WACC = 9.533 %
88. Your company made a purchase of $ 80,000 in equipment that has a life span of 4 years . Using a straight - line method of measuring depreciation , what is the amount you can depreciate for each of the 4 years ? ( a ) $ 10,000 ( b ) $ 15,000 ( c ) $ 20,000 ( d ) $ 32,000
( c ) Straight line depreciation = ( Purchase price - salvage value ) / No of years Straight line depreciation = ( $ 80000-0 ) / 4 = $ 20000
60. Your retail business receives a shipment of 1,000 dresses , for which you pay at a price 80 % above the cost for one month , after $ 9,000 . You sell the dresses above cost . Your store then sells which you reduce the price of the dresses to 20 % 75 % of the dresses during the first month and 50 % of the remaining dresses afterward . How much gross income did sales of the dresses generate for you ? ( a ) $ 10,200 ( b ) $ 11,553 ( c ) $ 12,111 ( d ) $ 13,500
( d ) Cost of 1000 dresses = $ 9000 Per dress cost = $ 9000 / 1000 = $9 Price in first month ( 80 % above cost ) = $ 9 * ( 1 + 80 % ) = $ 16.2 Price after first month ( 20 % above cost ) = $ 9 * ( 1 + 20 % ) = $ 10.8 Sales during first month ( 75 % of total dresses ) = 1000 * 75 % = 750 Sales after first month ( 50 % of remaining dresses ) = ( 1000-750 ) * 50 % = 125 Income Sales * Price Income in first month = 750 * $ 16.2 = $ 12150 Income after first month = 125 * $ 10.8 = $ 1350 Total Income = $ 12150 + $ 1350 = $ 13500
41. James Housing negotiated a revolving credit agreement of $ 50,000 with Brans Bank . The agreement calls for an interest rate of 10 % on fund use , 15 % compensating balance and 1 % commitment fee in the unused line of credit line . Assuming that compensating balance would not be maintained otherwise what would be the effective annual interest cost if the company borrows $ 200,000 for one year : ( a ) 11.5 % ( b ) 15 % ( c ) 26.5 % ( d ) 13.53 %
( d ) Effective Annual Interest Cost = ( Interest Cost + Commitment fee ) / ( amount borrowed - compensating balance ) Interest cost = $ 200,000 * 0.1 = $ 20,000 Commitment fee = ( $ 500,000 - $ 200,000 ) * 0.01 = $ 3000 Compensating balance = borrowed amount * compensating rate Compensating balance = $ 200,000 * 0.15 = $ 30,000 So , Effective annual interest cost = ( $ 20,000 + 3,000 ) / ( $ 200,000 - $ 30,000 ) = 13.53 %
103. You own a portfolio that has $ 1,400 invested in Stock A and $ 1,900 invested in Stock B If the expected returns on these stocks are 11 percent and 13 percent , respectively , the expected return on the portfolio is _percent ? ( a ) 11.15 ( b ) 13.33 ( c ) 14.90 ( d ) 12.15
( d ) Weight of stock A = 1400 / ( 1400 + 1900 ) = 0.424 = 42.4 % Weight of Stock B = 1-42.4 % = 0.576-57.6 % E xpected return on portfolio ( Weight of stock A * return on stock A ) + ( weight ofstock B return on stock B ) Expected return on portfolio = ( 42.4 % * 11 % ) + ( 57.6 % + 13 % ) Expected return on portfolio = 4.664 % + 7488 % = 12.152 %
61. As a marketing manager your team has asked you to determine what percentage of Americans own both an automobile and a motorcycle . You determine that 75 % of all Americans own an automobile and 15 % own a motorcycle . But , 20 % off all Americans own neither an automobile nor motorcycle . What is the percentage of Americans who own both ? ( a ) 2 % ( b ) 3 % ( c ) 5% ( d ) 10%
( d ) Percentage of Americans who own neither = 20 % So , Percentage of Americans who at least own one = 1-20 % = 80 % Percentage of Americans who own a motorcycle = 15 % Percentage of American who own an automobile = 75 % So , Percentage of Americans who own both = Percentage of American who own a motorcycle + Percentage of American who own an automobile - Percentage of Americans who at least own one . Percentage of Americans who own both = 15 % + 75 % - 80 % = 10 % :
92. Your company's net income is $ 8.5 million and the shareholder's equity is $ 145 million therefore the return on equity is : ( a ) 17.5 % ( b ) 59 % ( c ) 5 % ( d ) 5.9 %
( d ) Return on Equity = Net income / Shareholder's equity Return on Equity = $ 8.5 / $ 145 = 5.9 %
11. Trends in increased service - based economies often leads to : ( a ) Influx of migrant workers ( b ) Increased minimal wages ( c ) Decreases in college enrollments ( d ) More skilled talent moving abroad
A
16. In the Product Life Cycle , what usually follows " product maturity " : A. Saturation B. Growth C. Decline D. Abandonment
A
19. In accounting , the premise of the theory of constraints is that organizations can be measured and controlled by 3 measures . What are those measures ? ( a ) Throughput , operational expense , and inventory ( b ) Materials , production , and the supply chain ( c ) Throughput , operational expense , and sales ( d ) Materials , manufacturing , and production
A
24. Mr. Alison wants to ask field experts for general opinions and then compile these into a forecast. What type of research would Mr. Alison most likely to use? A. Delphi Method B. Market Research C. Polling D. Forecast research method
A
3. The most common form of variable pay is: A. Performance bonus's B. Raises C. Tax incentives D. IRA matching or equity-based compensation
A
32. Using the information of the above question, what will be the approximate theoretic value of one share of Alaba Corp if it goes "ex-rights"? A. $58.80 B. $57.50 C. $56.80 D. $59.04
A
37. If an amount of $ 200 is received from Mr. Jones , but it is credited to Mr. James what would this transaction affect ? ( a ) Accounts of both James and Jones ( b ) Only cash accounts ( c ) Only the Jones accounts ( d ) Only the James accounts
A
6. Ms. Carol Jones of ABC Forecasting Agency wants to prioritize her workers training needs. What 3 perspectives (method of assessing) should she follow to help in this process: A. Difficulty, importance, and frequency B. Difficulty, influence, and frequency C. Degree of certainty, influx of needs, and forecast of decisions D. Decision, individual needs, and frequency
A
66. Consumer research finds that the majority of televisions are purchased in the United States are by men . This appears to debunk the myth that women watch more television than men. more television than men. This argument is flawed because : ( a ) It fails to differentiate between buying and using ( b ) It does not provide information about men and women in general ( c ) It is not statistical in nature ( d ) It is bias and likely not true
A
72. The use of secondary data is preferred over primary data because it is : ( a ) More cost effective and quick ( b ) More scientific ( c ) More reliable ( d ) More understandable
A
74. Newskin , Inc. is marketing a new face cream that is very expensive but expects wide sales anyway because of the notion it will make buyers look years younger . This pricing is based on what type of tactic : ( a ) Value pricing ( b ) Flat rate pricing ( c ) Direct price discrimination ( d ) Complementary pricing
A
79. What is the most likely reason to recruit externally : ( a ) To find new talent and to bring new ideas and energy to the organization ( b ) To upset internal staff so they make changes ( c ) To create employee competition ( d ) To meet requests and receive incentives of outside recruiters and headhunters .
A
82. The " selling concept " is most likely synonymous to : ( a ) Hard sales ( b ) A product selling itself ( c ) Sales being inevitable ( d ) Sales baded on a bargain
A
96. The cost savings that result from dealing in larger quantities , can be increased to the extent that fixed costs ( those not sensitive to variations in volume ) are absorbed by each additional unit that is produced or purchased is known in operational management as : ( a ) Economies of scale ( b ) Economies of supply ( c ) Economies of volume ( d ) Economies of quantity
A
opportunity for 100. The 2009 balance sheet of Carlo's Marina Shop showed long - term debt of $ 3.2 million , and the 2010 balance sheet showed long - term debt of $ 3.9 million . The 2010 income statement showed an interest expense of $ 750,000 . The firm's cash flow to creditors during 2010 is ________? ( a ) $ 50,000 ( b ) $ 55,000 ( c ) $ 45,000 ( d ) $ 51,500
A Cash flow to creditors = decrease in log term loan + interest payment Cash flow to creditors = ($3.2-$3.9)+$0.75 Cash flow to creditors = -$0.7+$0.75 = $0.05 million = $50,000
34. For the previous estimate of $3.835 trillion, the Commerce Ministry revised the real GDP of the country to $3.887 trillion. Before any adjustment for inflation was made, the GDP was $4.603 trillion, up from $4.523 trillion. What is the GDP deflator used in the revision of the calculation? A. 118.0 or less B. Not greater than 118.5 C. Greater than 118.5, but not greater than 119.0 D. More than 119.0
A GDP Deflator = (Nominal GDP/Real GDP)*100 As we are calculating GDP deflator for used in revision so we will take revised values. GDP Deflator = ($4.523/$3.877)*100 = 116.66
33. If Labbot Pharmcy gets an invoice for the purchase with the date 10/21/12 subjected to credit terms "3/10, net 30 EOM" what is last possible date on which the payment has to be made: (i) if the discount is taken, (ii) if the discount is not taken? A. Nov 1 and Nov 20, respectively B. Nov 10 and Nov 20, respectively C. Nov 10 and Nov 30, respectively D. Dec 10 and Dec 30, respectively
A If discount is taken then payment would be made in 10 days. As purchase was made on Oct 21 then payment would be made on November 1st. If discount was not taken then payment would be made after 30 days.
36. Consider the following information : Owner's Equity = $ 50,500 Assets = $ 99,500 . What will be the liabilities ? ( a ) $ 49,000 ( b ) $ 55,000 ( c ) $ 125,000 ( d ) $ 115,700
A Liabilities = Assets - Owner's Equity Liabilities = $ 99,500 - $ 50,500 Liabilities : = $ 49000
21. Susan Roberton is managing partner of new 60-room motel. She anticipates renting these rooms for 16,000 nights next year. All rooms are similar and will rent for the same price. Branch estimates the following operating costs for the next year: Variable operating costs: $4 per room-night Fixed costs: Salaries/wages $170,000 Maintenance 48,000 Other operating / admin costs 122,000 What are the total fixed costs? A. $340,000 B. $404,000 C. $170,000 D. $214,000
A Total Fixed Costs = $170,000 + $48,000 + $122,000 = $340000
31. Using the information in question 30, what will be the approximate theoretic value of one share of Alaba Corp if it goes "ex-rights"? A. $58.80 B. $57.50 C. $56.80 D. $59.04
A. Theoretical value of right = ($60 - $54)/(4+1) = $1.20 Share price before right = $60 Share price after it goes ex right = $60 - $1.20 = $58.80 Another method: Share Price after it goes ex right = (share price before right * number of shares + right subscription share price * number of shares)/ total number of shares Share price after it goes ex right = (60*4+54*1)/5 = $58.80
1. The main role of the US Securities and Exchange Commission (SEC) is: A. To track and report exchange rates B. Investor protection and law enforcement C. Issuing US stocks and bonds D. Informing citizens on how to invest
B
10. What economic theory explains why it is beneficial for two parties are countries , regions , or businesses , to trade their goods and whether - services : the ( a ) Economic Trade Theory ( b ) Theory of Comparative Advantage ( c ) Theory of Opportunity Cost ( d ) Keynesian Economic Theory
B
29. Expense occurred which gives benefit for less than twelve months is known as ______. A. Capital expense B. Revenue expense C. Revenue receipt D. Differed expense
B
40. Fixed - income security bonds that yield interest payments : ( a ) Irredeemable Bonds ( b ) Convertible Bonds ( c ) Redeemable Bonds ( d ) Deep Discount Bonds
B
46. Information about physical working conditions , work scheduling including the organizational and social context of the job , is called : ( a ) Job context ( b ) Job specification ( c ) Work activities ( d ) HR policy manual
B
48. Beta is : ( a ) Measure of market risk ( b ) Measure of the systemic risk ( c ) Measure of total risk ( d ) All of above
B
65. Usually a successful year for a stock fund will result in an increased investor dollar flowing into the fund and increase in other mutual stocks offered by that same company . However , while last year JP Connor Mutual Company had one stock beat average market returns by a large margin , their other funds did not report an increase . Which conclusion can best be drawn from the information above ? ( a ) When one stock fund beats the market the other is expected to follow ( b ) The success of one fund is not the only factor affecting whether investors will invest in other funds by the same company ( c ) The performance of JP Connor is unstable and investors should seek another company to invest with ( d ) The market itself is unstable
B
67. According to McCarthy , the " 4Ps " of the Marketing Mix are generally known as : ( a ) Price , Platforms , Promotion , and Product ( b ) Price , Place , Promotion , and Product ( c ) Price , Place , Promotion , and Process ( d ) Price , Place , Program , and Product
B
7. The development in organizations to help boost the economic potential in a society and to help generate the tools necessary to fuel its capitalistic nature is an example of what business theory : ( a ) Systems Theory ( b )Organizational Theory ( c ) Capitalism Theory ( d ) Economic Theory
B
70. The last buyers of technology are referred to in marketing as : ( a ) Slow movers ( b ) Laggards ( c ) Conservative shoppers ( d ) Isolated market
B
75. Jell - 0 brand gelatin offering Jell - O Pudding Ice - pops is an example of what marketing strategy : ( a ) Branding ( b ) Brand extension ( c ) Brand expansion ( d ) Brand reconditioning
B
76. Setting up tables or booths in a grocery store and allowing customers to try products for free is what type of marketing promotion strategy : ( a ) Premium strategy ( b ) Sampling strategy ( c ) Direct marketing strategy ( d ) Product promotion strategy
B
80. The most important outcome in favor of the organization for increasing an employee's compensation regularly is : ( a ) The employee's internal sense of accomplishment ( b ) The employee's increase in productivity ( c ) The employee's personal satisfaction ( d ) The employee's thankfulness to management .
B
81. The " product concept " is most likely synonymous to : ( a ) Price ( b ) Quality ( c ) Market Value ( d ) Idea
B
83. Due to a legal regulation , Don's Digital Signs was unable to advertise and market in a way they wished . What type of variable , beyond Don's control , created this issue ? ( a ) Marketing variable ( b ) Exogenous variable ( c ) External variable ( d ) Regulatory variable
B
84. Mr. Rollen wants to market a new product that appears more advantageous to potential customers than competing brands . The rate of adoption of a new offering therefore depends on the product's : ( a ) Cost savings ( b ) Relative advantaged ( c ) Market share ( d ) Warranty
B
9. What percentage of ownership of a company abroad by a US multinational is referred to as direct foreign investment : ( a ) 5 % ( b ) 10 % ( c ) 25 % ( d ) 50 %
B
91. Based on the current ratio found in question # 90 above , what should the company do ? ( a ) Borrow ( b ) Restructure debt ( c ) Sell stock ( d ) Keep doing what they are doing
B
95. Ms. Rose feels that if she is benevolent to her employees they will like her and do what she tells to do is likely to use what type of management style : ( a ) Autocratic ( b ) Custodial ( c ) Participative ( d ) Collegial
B
of responses ? 98. What type of research data collection method would likely yield the least amount ( a ) Focus groups ( b ) Mailing ( c ) Telephoning ( d ) In person
B
20. Company A is trying to determine target annual operating and target operating income per unit of Provalue II respectively . Determine these figures based on the information provided below : Invested capital : $ 96,000,000 Target rate of return on investment : 18 % ( a ) $ 16,900,000 ; $ 86.50 ( b ) $ 17,280,000 ; $ 86.40 ( c ) $ 17,310,000 ; $ 86.40 ( d ) $ 18,280,000 ; $ 88.50
B Invested capital = $96,000,000 Return on investment = 18% So, target annual income = $96,000,00 * 0.18 = $17,280,000
27. Calculate the foreign ROI in foreign currency for Peno's Inns in Mexico City base don the following information: The investment (total assents) in Mexico City is 30,000,000 pesos. The operating income of Peno's Inn in 2011 was 6,000,000 pesos. What is the ROI, calculated using pesos? A. 18% B. 20% C. 25% D. 30%
B ROI = Income/Investment ROI = 6,000,000 Pesos/30,000,000 Pesos = 20%
30. Price of common stock of Alaba Corp in market is $60 per share and purchase of each share gives the buyer a subscription right. If someone has four rights then an additional share of common stock can be purchased at a subscription price of $54 per share. What would be the approximate theoretical value of a right if the company is currently selling common stocks "rights-on"? A. $0.96 B. $1.20 C. $1.50 D. $6.00
B Right can be exercised on the 5th share Theoretical value of right = (Stock price - Rights subscription price per share)/(Number of rights required to buy one share + 1 ) Theoretical value of right = ($60 - $54)/(4+1) = $1.20
26. ABCD company has decided to dispose of an old machine. However, before doing so the manager wants to consider the tax consequence of disposing an old machine. What would be the tax savings on the loss of the machine given the following data? Current disposal value of old machine: $6,500 Deducted book value: 40,000 Loss on disposal of machine: ($33,500) A. 0 B. $13,400 C. $6,900 D. -6,500
B Tax savings on the loss = loss amount * tax rate Tax savings on the loss = $33,500*40%= $13,400
12. Mr. Roberts contacts Accenty International , Inc. in order to get a job complete in minimum time and at a low cost without domestic labor involved . Mr. Roberts outsources the job to Accenty that subsequently outsources the work to a company in a foreign county. What model is Mr. Roberts looking to in order to get the job done? A. Outsourcing direct model B. Offshoring contracting model C. Global corporation D. Multinational
C
17. The shareholder's equity should read: A. revenue-costs B. Profit - loss C. Assets - liabilities D. Profit - taxes
C
2. According to Human Resources (HR) expert Mark Huselid what tool best communicates key organizational objectives to the workforce: A. HR Master Excel Spreadsheet B. The Human Resource Metric C. The HR Scorecard D. The HR Organizational Chart
C
23. The selling concept is predicated upon the notion that consumers: A. Will make purchases in the absence of strong selling and promotional efforts B. Will be undecided about purchases without coupons or incentives C. Will not make purchases in the absence of strong selling and promotional efforts D. Will make purchases without promotions, but will likely return these products later
C
39. The future value of all cash inflow at the end of time horizon at a particular rate of interest calculated is a feature of : ( a ) Risk - free rate ( b ) Compounding method ( c ) Discounting ( d ) Risk Premium
C
47. Management philosophy that requires employers to continuously set and relentlessly meet ever high quality , cost delivery and availability goals , is called : ( a ) Performance appraisal ( b ) Performance management ( c ) Continuous improvement ( d ) Management by objective
C
5. The best way an Employment Planning Service can assist a person seeking employment to learn about the job and to make informed decisions is to have the prospect: A. Provide them with primary and secondary data for the industry B. Have them participate in job simulation C. Have them job shadow D. Have them interview those actually doing the job
C
62. A fashion company's spring season line for women utilizing a new soft fabric broke record sales last quarter . The company now plans to launch a line of clothing for men made with the same fabric . The company's plan assumes that : ( a ) Women will plan to buy more clothing for themselves and their male partners ( b ) Other companies will not make such a move ( c ) Men will be as interested in the new soft fabric like the women were the year before ( d ) The new line will replace declining markets
C
63. New technologies make it possible for customer service representatives to work from home , saving them extra time and money in commuting . They would likely increase productivity if the employees did not : ( a ) Commute far ( b ) Use cars verses other means of commuting ( c ) Need to consult frequently with other colleagues to solve callers ' issues ( d ) Have pets at their home
C
64. One of your employees did not report that another worker stole company merchandise . The act of the employee who stole is unethical and perhaps a criminal violation if : ( a ) The employee reported it ( b ) The employee did not report it ( c ) The employee reported it , or not ( d ) The employee is caught and charged accordingly
C
68. As part of a marketing campaign to sell 10,000 1940 Ford truck replicas , what segments would best be targets for the most sales : ( a ) Gender , location , and eye color ( b ) Race , religion , location ( c ) Age , interest , and gender ( d ) Interest , race , job status .
C
69. First buyers of new technologies are referred to in marketing as : ( a ) Geeks ( b ) First time buyers ( c ) Innovators ( d ) Test markets
C
77. What statement is most true of teams : ( a ) Teams are made up of people who agree on how things should get done ( b ) Teams are highly interdependent and cannot function when the members have multiple highly interdependent subtasks . ( c ) Teams are comprised of groups of people linked to a common and conduct tasks that are high in complexity and have many interdependent purpose subtasks ( d ) Teams need to function with uncommon team because its diversity that bonds them together tasks because that's why they are a team because its diversity that bonds them together.
C
8. The first line benefit for offshoring is : ( a ) Improvements in the quality of goods , materials , and services ( b ) Increased profits due to the ability to offer a larger selection of goods ( c ) Decreased labor costs ( d ) Improved " Green " conditions domestically
C
85. Marketing in a way to get customers to buy a product despite the fact that it may not necessarily be good for them ( e.g. foods high in fat content ) is the ability to help them work through this condition : com ( a ) Guilt ( b ) Social pressure ( c ) Cognitive dissonance ( d ) Manipulation
C
87. While doing an analysis of the product life cycle for Product " A " you notice that several other companies have market share for the same product and that Product " A " has been suffering declines in sales . What would be a reasonable recommendation to make ( a ) File for bankruptcy ( b ) Abandonment . Go out of business to avoid further decline ( c ) Cut costs and offer a new product ( d ) Merge with another company
C
93. According to Standard and Poor's ( S & P ) the highest rating a bond can achieve is : ( a ) A + ( b ) AA ( c ) AAA ( d ) AAAA
C
97. Mr. Jones wants to determine at what point the company should switch from one product to a competing other . What tool should he use ? ( a ) Cost analysis ( b ) Cluster analysis ( c ) Crossover analysis ( d ) Point analysis
C
13. Novo Nordisk is a pharmaceuticals company headquartered in Denmark but has established divisions of subsidaries in Italy, Mexico, Switzerland , the Netherlands, and the United States. Novo Nordisk is an example of what type of company? ( a ) Foreign - Domestic Company ( b ) International Trade Corporation ( c ) Global Corporation ( d ) Multinational
D
15. Mr. Rose completed the financial statement for his company and reported a net income of $ 2 million . However , he forgot to deducted the taxes and interest expenses so considering that everything else was done correctly the $ 2 million really represented : ( a ) Total revenue ( b ) Profits ( c ) Sales ( d ) Operating income
D
22. What function is not one of the six primary functions of the value chain? A. Research and development B. Design of products and processes C. Production D. Human Resources
D
25. Mr. Jones has recently taken over a CEO of the Company C. At the helm Mr. Jones took on total authority and control over all decision-making. What type of leadership style is Mr. Jones likely to align to? A. Democratic B. Collegial C. Demanding D. Autocratic
D
28. Company A and Company B were told by the government that they were not allowed to merge because they would the be a monopoly. What always are the government following? A. Anti-monopoly laws. B. Merge protection laws C. Consumer protections laws D. Anti-trust laws
D
35. Which of the following bond option provides most protection to the investor ? ( a ) Debentures ( b ) First - mortgage bonds ( c ) Subordinated debentures ( d ) Income bonds
D
4. What is the best example of an external influence to the company's Human Resources: A. Labor unions B. Organizational structure C. Business objectives D. Industry trends
D
45. Which is not a market entry strategy : ( a ) Licensing ( b ) Indirect exporting ( c ) Joint venture ( d ) International marketing
D
71. Focusing on what technologies the customer is currently using and how many of the products in the market the customer needs is what segmentation variable : ( a ) Demographic variable ( b ) Personal variable ( c ) Situational variable
D
73. What type of organization would most be preferred if you wanted a structure that facilitated the horizontal flow of skills and information and your main idea was in the management of large projects or product development processes , drawing employees from different functional disciplines for assignment to a team without removing them from their respective positions : ( a ) Simple ( b ) Functional ( U - Form ) ( c ) Multidivisional ( M - form ) ( d ) Matrix
D
78. What is the most likely outcome of internal recruitment for upper mobility positions : ( a ) Will act to deter those who are not hired to apply again ( b ) Will upset the majority of staff in the organization ( c ) Will draw scandals from outside employment agencies ( d ) Will act as an incentive for staff to work harder within the organization
D
86. Scott wants to do market research on religious beliefs and opinions of clergy . What dimension of segmentation is Scott looking at : ( a ) Demographic ( b ) Usage ( c ) Sector ( d ) Psychographic
D
94. A manager who rewards and gives important titles to employees will likely satisfy what Maslow's hierarchy of need : ( a ) Level 1 : Survival ( b ) Level 2 : Safety ( c ) Level 3 : Belonging ( d ) Level 4 : Self - Esteem
D
99. Which method would likely yield the greater opportunity for interviewer cheating ? ( a ) Focus groups ( b ) Mailing ( c ) Telephoning ( d ) In person
D
Netherlands , 14. The primary function of the World Trade Organization is : ( a ) To resolve disputes related to international trade ( b ) To ensure that trade is balanced among free countries ( c ) To ensure corporate responsibility compliance among trading countries ( d ) To oversee the agreement of the Uruguagy Round of free trade talks
D
18. Assume that you are presented with an investment opportunity that would cost $ 3,800 in today's money . Further assume that you can reasonably expect to generate $ 1,000 in income per year for each of five years and that the prevailing cost of money or interest rate is 8 % . The discount factors each year are : ( Year 1 : .926 ; Year 2 : .857 ; Year 3 : .794 ; Year 4 : .735 ; and Year 5 : .681 ) . What would be the net present value ( NPV ) , and should you accept the opportunity ? ( a ) $ -1007 , no ( b ) $ 1007 , yes ( c ) $ 1200 , yes ( d ) $ 193 , yes
D Initial Cost : $ 3800 Income each year : $ 1000 No. of Years : 5 NPV = PV of all positive cashflows - Initial Investment PV of First year inflow = $ 1000 * 0.926 = $ 926 PV of Second Year Inflow = $ 1000 * 0.857 = $ 857 PV of Third Year Inflow = $ 1000 * 0.794 = $ 794 PV of Fourth Year Inflow = $ 1000 * 0.735 = $ 735 PV of Fifth Year Inflow = $ 1000 * 0.681 = $ 681 So NPV = ( $ 926 + $ 857 + $ 794 + $ 735 + $ 681 ) - $ 3800 = $ 193 Yes , since NPV is greater than 0 the project should be accepted .
