Ch 5.2 Quiz

Which of the following best expresses fixed asset turnover? Question options: A) Revenue/Fixed assets B) Fixed assets/Total return to shareholders C) Current assets/Fixed assets D) Fixed assets/Current liabilities

A)

_______ precisely indicates how much of a firm's sales is converted into profits. Question options: A) Return on revenue B) Break-even price C) Inventory turnover D) Working capital turnover

A)

During the process of formulating an effective business model, a firm's managers should first Question options: A) transform their strategy of how to compete into a blueprint of actions and initiatives. B) evaluate the firm's strategy already in effect and take corrective actions if necessary. C) implement their blueprint of actions and initiatives through structures, processes, culture, and procedures. D) implement their strategy at corporate, strategic business unit, and functional levels. View Feedback

A

How does a firm capture its producer surplus for a good or service? Question options: A) as profit per unit sold B) as earnings per share C) as cost per unit sold D) as market price per share

A

When using the balanced-scorecard approach to assess a firm's performance, which of the following is not a key question that managers need to answer? Question options: A) How do we reduce the economic value created? B) How do shareholders view us? C) What core competencies do we need? D) How do customers view us?

A

The fixed asset turnover of a company is 8.3. What do you infer from this? Question options: A) The return on fixed assets will break even in 8.3 years. B) Every dollar spent on the company's fixed assets generates $8.30 of revenue. C) 8.3% of the company's revenue is invested in fixed assets. D) The cost of capital invested on fixed assets is 8.3% of the total profit.

B

Which of the following is a disadvantage of measuring firm performance through total return to shareholders and firm market capitalization? Question options: A) These tools measure competitive advantage in absolute terms rather than relative terms. B) Only the book value of the share prices is taken into account when applying these measures, and not the market value. C) Market volatility makes it difficult to assess firm performance through these measures, particularly in the short-term. D) These tools fail to indicate how the stock market views all available public information about a firm's expected future performance. View Feedback

C

______ are the legal owners of public companies. Question options: A) Creditors B) Shareholders C) Employees D) Category captains

C

_____ is the money shareholders provide in return for an equity share, which they cannot recover if the firm goes bankrupt. Question options: A) Tangible assets B) Value creation C) Risk capital D) Market capitalization

C)

Janet is the CEO of Far Sight Inc., which uses a triple-bottom-line approach. As a result, Janet will tend to Question options: A) ignore the ecological dimension for her company. B) view superior financial performance as the sole objective of her firm. C) expect her company to be socially responsible. D) use fossil fuels to run her company's production plants. View Feedback

c