WPC480 Exam 1

If Modern Furniture LLC obtains an 18 percent return on invested capital, which of the following will help determine if it has a competitive advantage over other pharmaceutical companies? a) comparing the return to the return on invested capital obtained by other firms in the industry b) evaluating the liquidity ratios for other pharmaceutical companies c) comparing the value to the history of the firm's return of investment over a number of years d) assessing the value based on the shareholders' expectations of return on their capital

comparing the return to the return on invested capital obtained by other firms in the industry

Green and Good Inc., a multinational company, relies on its media partner OmniSignal to regularly advertise its offers, sales, and new products. OmniSignal is invested in this relationship because it generates most of its revenue from advertising Green and Good's products. In this scenario, OmniSignal is Green and Good Inc.'s a) stockholder. b) internal stakeholder. c) external stakeholder. d) workforce.

external stakeholder

Leslie owns a large portion of Hue Apparel's stock. However, she is not employed by the company. In this scenario, Leslie is the company's a) internal stakeholder. b) customer. c) external stakeholder. d) creditor.

internal stakeholder

Which of the following three important stakeholder attributes should managers pay special close attention to in order to better understand stakeholder impact analysis? a) shareholder rights plan, board representation and CEO influence b) grace under pressure, financial control, and reward power c) power, legitimacy, and urgency d) competitive advantage, economic value, and time

power, legitimacy, and urgency

Tony's Pizza Shop is able to net $10,000 a week; this makes his shop profitable. His number one competitor, Leo's Pies is also profitable, netting $12,000 a week. Lil Anthony's Pizza Palace nets $13,000 a week. Since Tony's Pizza Shop is profitable, we can conclude that he has a competitive advantage in the industry. a) False—Tony more than likely has a sustained competitive advantage since he's been in business longer. b) True—competitive advantage is achieved through profitability alone. c) True—competitive advantage is achieved since Tony has a positive net income. d) False—competitive advantage is only achieved by generating above average returns, relative to competition.

False—competitive advantage is only achieved by generating above average returns, relative to competition.