Finance and Econ in Sport Final Exam

What valuation approach relies on prices that similar assets sell for in the marketplace? a. income approach b. market approach c. cost approach d. synergistic approach

b. market approach

As facility projects can often lead to non-normal cash flows, it is recommended that which of the following be used when developing capital budget? a. payback period b. modified internal rate of return c. internal rate of return d. net present value e. discounted payback period

b. modified internal rate of return

Which of the following is a profitability ratio that measures what percentage of an organization's total sales or revenues was net profit or income? a. Interest coverage ratio b. net profit margin c. return on equity d. market value

b. net profit margin

Which of the following is today's value of a future cash flow? a. nominal value b. present value c. future value d. real value

b. present value

To be at "arms' length" means that ________. a. There is no familial relationship b. the parties have no financial relationship c. neither party has an ownership interest in the other d. all answers are correct

d. all answers are correct

One source of risk is current economic conditions. Of the following, which is impacted by changes in current economic conditions. a. capital finance b. operating budgets c. league loan pools d. all of the above

d. all of the above

Of the following, which is not an adjustment made to determine the value of a specific ownership interest? a. synergistic premium b. controlling interest c. marketability d. all of the answers are adjustments

d. all of the answers are adjustments

The choices that individuals and organization make regarding financial management are influenced by which of the following? a. demand b. price c. scarcity d. all of the options listed are correct

d. all of the options listed are correct

Financial returns measured by an economic impact study include which of the following? a. new jobs b. new earnings or income c. new tax revenue d. all of these are included

d. all of these are included

This type of visitor comes to a community for one event but also makes time to attend a basketball game. In an economic study of its basketball team, how would you classify this kind of visitor? a. opportunity visitor b. time-switcher c. incremental visitor d. casual visitor

d. casual visitor

Which of the following is the number of years required to recover the initial capital investment of an organization? a. discounted payback period b. net present value c. internal rate of return d. payback period e. modified internal rate of return

d. payback period

This financial statement tracks cash in and out of an organization over a specified period of time. a. income statement b. budget c. balance sheet d. statement of cash flows

d. statement of cash flows

The initial cost of a capital project is the actual cost of starting the project adjusted for which of the following? a. any installation, delivery or packaging costs b. discounts to the initial price c. the sale of existing equipment or machinery d. taxes e. all of these answers are correct

e. all of these answers are correct

In order for investors to purchase stock in a company, they will require a return of at least a certain amount. The amount investors require depends on which of the following? a. Production opportunities b. time preferences for consumption c. risk d. inflation e. all of these options

e. all of these options

_______ is the science of fund management. it applies concepts from accounting, economics, and statistics

finance

The ______ shows the organization's income over a specific period of time.

income statement

True or False: NCAA revenue distributions to member schools go directly from the NCAA to the school.

False

True or false: The geographic area of impact should be determined late in an economic impact study.

False

When citizens decide to raise their taxes to fund two new sports stadiums rather than to raise taxes for something such as education, they missed a chance to improve the educational system. What is this known as? a. a marginal cost b. a variable cost c. an opportunity cost d. a fixed cost

c. an opportunity cost

A series of equal payments or receipts made at any interval of time is referred to as which of the following? a. cash inflow b. cash outflow c. annuity d. lump sum

c. annuity

Of the following capital budgeting methods, which one ignores the time value of money as it fails to take into account the cost of capital? a. discounted payback period b. net present value c. payback period d. internal rate of return e. modified internal rate of return

c. payback period

What are the primary sources of NCAA revenue? a. TV and marketing rights fees b. Championship tournaments c. Investment income d. sales and services

a. TV and marketing rights

This ratio is an indication of whether an organization can meet its current liabilities-those due within a year- with its current assets. a. current ratio b. quick ratio c. total asset turnover ratio d. inventory turnover ratio

a. current ratio

This ratio measures how an organization finances its operation with debt and equity. a. debt ratio b. current ratio c. total asset turnover ratio d. quick ratio

a. debt ratio

What is a measure of risk or uncertainty of time? a. discount rate b. development rate c. inflation rate d. interest rate

a. discount rate

Which of the following is the depreciation method that is most aggressive at allocating loss of useful life to the early years of the asset's use? a. double-declining balance b. straight-line c. units of production d. none of the options are correct

a. double-declining balance

Which approach to valuation is also referred to as a discounted cash flow analysis or a discounted cash flow approach? a. income approach b. market approach c. synergistic approach d. cost approach

a. income approach

The ____ of a bond is the face value, or amount of principal that the bond is worth at maturity. a. par value b. coupon value c. maturity d. current yield

a. par value

When sport leagues do not expand into a market that can support a franchise, or when they create rules to limit the movement of existing franchises, which of the following economic concepts is being applied? a. scarcity b. demand c. price d. equilibrium

a. scarcity

Which of the following is an indirect source of public financing? a. tax abatements b. lottery proceeds c. sales tax revenue d. tourism tax revenue

a. tax abatements

Risk increases as the length of time funds are invested increases. What is this known as? a. level of risk b. risk premium c. risk of time d. liquidity premium

c. risk of time

The main disadvantages of forming a business under a ________ structure is that there is double taxation of profits, and the cost of forming the business and operating the business is higher than other structures. a. Sole proprietorship b. C corporation c. limited liability corporation d. general partnership

b. C Corporation

True or False: The rate of return is the gain or loss on an investment over a period of time.

True

What is the NCAA's main expense? a. Salaries b. Distribution to Division I members c. Distribution to Division II and III members d. General administrative

b. Distribution to Division I members

Which of the following is NOT a form of equity financing? a. retained earnings b. a loan c. gifts d. government funding e. donations

b. a loan

Which of the following refers to the purchasing power of a dollar? a. nominal value b. future value c. present value d. real value

d. real value

Which valuation method calculates the cost to re-create the business or asset? a. Market approach b. Income approach c. Cost approach d. Synergistic approach

C. Cost approach

The continuous building of bigger and better athletic facilities for the sole purpose of attracting youth sport participants is often referred to as: a. A legs race b. Smart design c. An arms race d. A wheelbarrow race

C. an arms race

True or False: More than 90% of Division I athletic programs have expenses that exceed revenues on an annual basis.

True

True or false: According to the HBO Real Sports video clip, the youth tourism industry is a nine billion dollar industry.

True

True or false: Psychic impact is the emotional impact on a community that results when the community hosts prestigious events or major sports teams.

True

This type of visitor changes the time they are coming to a community to coincide with a basketball game in the community. In an economic impact study of its basketball team, how would you classify this type of visitor? a. time-switcher b. casual visitor c. incremental visitor d. opportunity visitor

a. time-switcher

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

b. conduct a post-audit analysis

Which of the following is the amount earned annually from the interest payment compared with the price of the bond? It is typically expressed as a percentage return. a. coupon rate b. current yield c. par value d. maturity

b. current yield

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

b. inflation rate

What is determined by comparing the risk of one asset to another? a. risk of time b. level of risk c. risk premium d. liquidity premium

b. level of risk

College athletic department-allocated revenues include which of the following? a. ticket sales b. student fees c. NCAA and conference distributions d. alumni donations

b. student fees

What term is used to describe the tendency for youth sport fami1lies to combine travel for pleasure/leisure? a. work/study trip b. tournication c. spring break d. travel ball holiday

b. tournication

A _______ is a combination of financial assets held by an investor.

portfolio