479 Chapter 8 Quiz
The common stock of a firm that is owned by the firm itself is called what? A. Treasury stock B. Convertible stock C. Goodwill D. Preferred stock E. Retained earnings
A. Treasury stock
In the United States , only two states currently require businesses to tell employees if their electronic communicationslong dash—including e-mails, instant messages, texts, photos, and websites visitedlong dash—are being monitored; the two states are _____ and _____. A. Delaware; Connecticut B. Virginia; Florida C. Hawaii, Oregon D. New York; California E. Texas; Alaska
A. Delaware; Connecticut
What formula below is correct for valuing a company using the price/earnings ratio method? A. Divide the market price of the firm's common stock by the annual earnings per share (EPS) and multiply this number by the firm's average net income for the past 5 years. B. Divide the market price of the firm's common stock by the firm's current ratio and multiply this number by the firm's average net income for the past 5 years. C. Divide the market price of the firm's common stock by the annual earnings per share (EPS) and multiply this number by the firm's average revenue for the past 5 years. D. Divide the market price of the firm's common stock by the annual earnings per share (EPS) and multiply this number by the firm's average sales for the past 5 years. E. Divide the market price of the firm's common stock by the firm's debt-to-equity ratio and multiply this number by the firm's average net income for the past 5 years.
A. Divide the market price of the firm's common stock by the annual earnings per share (EPS) and multiply this number by the firm's average net income for the past 5 years.
In EPS/EBIT analysis, from where does the tax rate percentage come? A. Use the company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the firm's income statement. B. Use the company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the firm's cash flow statement. C. Just use 10 percent for all financing options to better examine impact of debt versus stock options for raising capital. D. Estimate the company's future tax rate based on the company's strategies. E. Use the respective country's federal income tax rate.
A. Use the company's prior year tax rate as revealed by dividing income before taxes by taxes paid off the firm's income statement.
Is the following statement true? No federal laws in the United States currently prevent businesses from using GPS devices to monitor employees, and federal law does not require businesses to disclose to employees whether they are using such techniques. A. Yes B. No C. It depends on the particular industry. D. It depends on the particular state. E. C and D
A. Yes
Digital advertising spending on social media and mobile devices increased nearly ____ percent to $50 billion in the United States in 2014, comprising 28 percent of total ad spending in the nation. A. 37 B. 17 C. 27 D. 47 E. 7
B. 17
About _____ percent of all traffic on the Internet is fake, the result of bogus computers programmed to visit websites to take advantage of marketers who typically pay for ads whenever they are loaded when a user visits a webpage, regardless of whether the user is an actual person. A. 56 B. 36 C. 26 D. 16 E. 46
B. 36
Regarding corporate valuation, a conservative rule of thumb is to establish a business's worth as ____ times the firm's current annual profit. A. 10 B. 5 C. 12 D. 6 E. 3
B. 5
Another term for product positioning is _______________. A. product marketing B. perceptual mapping C. perceptual marketing D. product mapping E. product segmentation
B. perceptual mapping
More than 40 percent of businesses that send employees out on service calls today track the location and movement of those employees by their company-owned/-provided hand-held devices or vehicles. A. 50 B. 30 C. 40 D. 20 E. 10
C. 40
The top 20 most valuable college football programs are listed in the chapter in terms of their monetary value. What team is most valuable? A. Michigan Wolverines B. LSU Tigers C. Texas Longhorns D. Notre Dame Fighting Irish E. Alabama Crimson Tide
C. Texas Longhorns
What two criteria does an excellent product positioning map meet? A. It uniquely distinguishes a company from the competition. B. It leads to an effective target market. C. It leads customers to expect slightly less service than a company can deliver. D. A and C E. A and B
D. A and C
Limitations of EPS/EBIT analysis include: A. dividends and EBIT ranges. B. continuity and extent leveraged. C. timing, control, and flexibility. D. A, B, and C E. A and C
D. A, B, and C
In developing projected financial statements, how do you calculate retained earnings on the balance sheet? A. Use a percentage of sales method based on the prior 3 years coupled with the company's strategies. B. Use retained earnings as the plug figure to make the balance sheet balance. C. Add the net income to the prior year's retained earnings. D. Add the net income less dividends to the prior year's retained earnings. E. Use a percentage of sales methods based on the prior 3 years.
D. Add the net income less dividends to the prior year's retained earnings.
Three marketing activities are especially important in strategy implementation and thus are discussed as major sections in Chapter 8. Which activity is not one of the three? A. Engage customers in social media. B. Develop and use product-positioning/perceptual maps. C. Segment markets effectively. D. Advertise products effectively. E. B and D
D. Advertise products effectively.
Some hotel chains, such as ________, are holding off on using smartphones as keys until potential security issues can be resolved. A. Motel 6 B. Starwood Hotels and Resorts C. Hilton Worldwide D. Marriott E. Super 8 Motels
D. Marriott
The marketing mix component variables, also called the 4 P's of marketing, are: A. personal selling, place, publicity, and price. B. publicity, price, personal selling, and place. C. product, publicity, packaging, and price. D. product, place, promotion, and price. E. price, place, publicity, and packaging.
D. product, place, promotion, and price.
R&D spending in China increased to about $___ billion in 2014, up ___ percent from 2012. In contrast, R&D spending in the United States grew about ___ percent to $____ billion during the same period. A. 225; 26; 62; 115 B. 46; 4; 8; 92 C. 465; 4; 22; 285 D. 115; 62; 26; 225 E. 285; 22; 4; 465
E. 285; 22; 4; 465
Which statement below is false? A. FASB Rule 142 requires companies to admit once a year whether the premiums they paid for acquisitions, called goodwill, were a waste of money. B. Goodwill is not a good thing to have on a balance sheet. C. Because goodwill write-down accounting rules involve projections and judgments, companies have leeway for when to write down goodwill, and by how much. D. A and C E. All statements are true.
E. All statements are true.
Which statement below is false? A. Many firms prefer to leave their cash outside the United States if it was earned outside the United States because to use those funds to pay dividends or purchase treasury stock, for example, would trigger a big U.S. corporate income tax payment. B. Going public is not recommended for companies with less than $10 million in sales because the initial costs can be too high for the firm to generate sufficient cash flow to make going public worthwhile. C. Increasingly, companies are issuing corporate bonds to buy back their own stock and to pay cash dividends to shareholders. This has become a concern. D. "Going public" means selling off a percentage of a company to others to raise capital; consequently, it dilutes the owners' control of the firm. E. All statements are true.
E. All statements are true.
What is the only way(s) for retained earnings on the balance sheet to decrease from one year to the next? A. If the firm spent more retained earnings than it earned in a year B. If the firm had positive net income for the year but paid out dividends greater than the net income C. If the firm incurred an earnings loss that year D. If the firm had zero net income for the year but paid out some dividends E. B, C, and D
E. B, C, and D
When a firm buys more of its own common stock, what is the effect on the firm's earnings per share (EPS) value? A. The effect varies by industry. B. The effect varies by size of firm. C. There is no effect. D. It goes down. E. It goes up.
E. It goes up.
____________ can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits. A. Market targeting B. Target marketing C. Customer segmentation D. Product positioning E. Market segmentation
E. Market segmentation
Which statement is false? A. Sometimes firms will thus increase their treasury stock near the end of the quarter, or near the end of the year, to "artificially" inflate their EPS. B. Normally, in developing projected financial statements, the cash account is used as the plug figure. C. Another name for the balance sheet account—additional-paid-in-capital—is capital surplus. D. A and B E. None of the above
E. None of the above
The corporate valuation formula for the net worth method is what? A. Additional paid in capital plus retained earnings minus (goodwill - intangibles). B. Net worth plus retained earnings + (goodwill + intangibles). C. Total owners' equity (SE) + (goodwill + intangibles). D. Additional paid in capital plus retained earnings minus (goodwill + intangibles). E. Total shareholders' equity (SE) minus (goodwill + intangibles).
E. Total shareholders' equity (SE) minus (goodwill + intangibles).