Finance Sport Final

Which of the following is the final step in the capital budgeting process?

Conduct a post-audit analysis

Which section of the feasibility study determines the luxury seating capacity of a market?

Corporate demand

This valuation approach is appropriate for valuing assets for which substitutes could reasonable be brought or built.

Cost approach

Using this valuation method, the cost to re-create the business or asset is calculated.

Cost approach

Using this method of capital budgeting, expected cash flows are discounted by the project's initial cost of capital to determine when the project will break even.

Discounted payback period

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?

Double-declining balance

The geographic area of impact should be determined late in an economic impact study.

False

The sale of naming rights has little to do with getting a new stadium financed and completed.

False

Three interrelated sectors exist within finance. The goal or outcome of those working in which of the following sectors is to acquire and secure funds to maximize shareholder wealth?

Financial Management

Historically, which bond was the most common method used for facility financing?

General obligation bonds

Of the following bond types, which is issued by a public entity?

General obligation bonds Auction-rate bonds Lease revenue bonds Revenue bonds

Which of the following is the number of years required to recover the initial capital investment of an organization?

Payback period

Which ratio measures how often an organization sells and replaces its inventory over a specified period of time?

Inventory turnover ratio

Three interrelated sectors exist within finance. Which of the following sectors focuses on security choices made by individual and institutional investors as portfolios are being built?

Investments

Which of the following is an adjustment to the value of a share because it is not controlling?

A minority discount

Of the following statements regarding valuation, which is NOT true?

A valuation is always certain.

Without the benefit of having a feasibility study, the public in which city was asked to vote to spend $143 million of public money to build the Sprint Center without a major tenant?

Kansas City

Which of the following is a bond issued by a municipality in which the revenue stream backing the payment of the bond is an actual lease, not just revenues from a source?

Lease revenue bonds

What is determined by comparing the risk of one asset to another?

Level of risk

Which of the following is today's value of a future cash flow?

Present value

Of the following, which is a valuation method used in the market approach to measure the value of a business?

Price-to-ticket revenue ratio Price-to-earnings ratio Price-to-revenue ratio Equity shares sold

What is the interest rate that banks charge their best customers?

Prime rate

Which type of bond is a form of public finance paid off solely from specific, well-defined sources such as hotel taxes, ticket taxes, or other sources of public funding?

Revenue bonds

A __________ is a forecast because it is based on projecting future sales.

Revenue budget

Risk increases as the length of time funds are invested increases. What is this known as?

Risk of time

This type of individual changes the time he or she is coming to a community to coincide with an event being held in that community (i.e., University of South Carolina basketball game). If the university is performing an economic impact study of its basketball team, this individual would be classified as which of the following types of visitors?

Time-switcher

Typically, owners in a specific industry compete for wealth maximization. Owners in sport might not be interested in this goal. Rather, they may be interested in __________.

Winning championships Seeking celebrity status Protecting a community asset

This budgeting system requires starting the budgeting process with a zero base.

Zero based budgeting

If facilities are successful in various similar cities, then a facility will be successful in the subject city. Where does this notion comes from?

A comparables analysis

As part of a feasibility study, a __________ directly investigates actual facilities that might compete with a subject facility in order to host events.

A competitive analysis

When the citizens of Hamilton County, Ohio, decided to raise their taxes to fund two new sports stadiums rather than to raise taxes for something like improving the educational system in the county, they missed a chance to improve the educational system. What is this known as?

An opportunity Cost

The initial cost of a capital project is the actual cost of starting the project adjusted for which of the following?

Any installation, delivery or packaging costs Discounts to the initial price The sale of existing equipment or machinery Taxes

Which of the following is a picture or snapshot of the financial condition of an organization at a specific point in time?

Balance Sheet

One source of risk is current economic conditions. Of the following, which is impacted by changes in current economic conditions?

Capital finance Operating budgets League loan pools

When an organization borrows money that must be paid back over time, usually with interest, what kind of financing is being used?

Debt

Which ratio measures how an organization finances its operation with debt and equity?

Debt Ratio

The required rate of return to justify an investment in a capital project is the __________.

Discount rate

In which section of the feasibility study does one determine if there is sufficient revenue to pay for facility financing costs?

Facility specifications and operating estimates

Income or cash flow serves as the basis for the value of the business or asset when this valuation approach is used.

Income approach

The __________ shows the organization's income over a specified period of time.

Income statement

Last year's budget is increased or decreased by a percentage using this method of budgeting (a form of line-item budgeting).

Incremental budgeting

Factors examined in which part of the feasibility study include population, age, income, and competing sports franchises?

Individual ticket demand

When determining market demand for a facility, one must examine which of the following?

Individual ticket demand Corporate demand Event activity Facility specifications and operating estimates

Which of the following is calculated by investigating changes in the Consumer Price Index (CPI)?

Inflation rate

This valuation approach relies on prices that similar assets sell for in the marketplace.

Market approach

Which section of the feasibility study drives much of the rest of the study?

Market demand

An estimation of an organization's worth according to the stock market is __________.

Market value

Which of the followings forms of budgeting is preferred in sport as it begins with a floor of expenses while also using cost behavior and cost identification techniques?

Modified zero based budgeting

Three interrelated sectors exist within finance. Which of the following includes securities markets, investment banking, insurance, and mutual fund management?

Money and capital markets

In its policies regarding deferred salaries, which of the following leagues has stated that deferred payments must be placed by the team in a league fund for administration and future disbursement?

NFL

Which league prohibits the publicly traded ownership model?

NFL

Financial returns measured by an economic impact study include which of the following?

New jobs New earnings or income New tax revenues Positive externalities

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?

Production opportunities Time preferences for consumption Risk Inflation

This budgeting system is associated with output budgeting in which specific goals and objectives form the framework for a strategic, goal oriented budgeting process.

Program planning budgeting systems

Which of the following refers to the purchasing power of a dollar?

Real 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?

Scarcity

An indirect source of public financing is infrastructure improvements.

True

Feasibility studies in sport can be used to determine whether a city should bid to host a major sporting event.

True

Not measuring opportunity cost causes the overestimation of economic impact.

True

Psychic impact is the emotional impact of having a local sports team.

True

Sin taxes are taxes on alcohol and cigarettes.

True

The findings of one section of a feasibility study will affect or be affected by the findings or the other sections.

True

The output multiplier measures the indirect and induced effects of an extra unit of direct impact spending on economic activity within the local economy.

True