Hsp 480 Chapter 5

In 2014, Apple turned over its inventory more than 53 times. In stark contrast, Microsoft turned over its inventory only about 10 times during the year. Which of the following best explains this difference? A. Apple had a more effective management of its global supply chain than Microsoft. B. Microsoft had a stronger demand for its tablet computer than Apple did for its tablet computer. C. Apple operated its own production facilities and therefore had lower production costs than Microsoft. D. Microsoft had production facilities in countries with lower production costs than Apple.

A

A high percentage of R&D/Revenue ratio indicates a

A. strong focus on innovation to improve current products and services.

Which of the following statements is true of accounting data?

Accounting data are historical data and thus backward looking

The ratio of SG&A/Revenue is an indicator of a firm's focus on A. researching to produce innovative products and services. B. marketing to promote its products and services. C. producing a good in an efficient manner. D. creating a good that is cost-effective.

B

_____ are the legal owners of public companies. A. Employees B. Shareholders C. Category captains D. Creditors

B

_____ most precisely measures how well a company leverages its fixed assets, particularly property, plant, and equipment (PPE). A. Working capital turnover B. Fixed asset turnover C. Fixed assets to equity ratio D. Capital leverage ratio

B

A firm has 30 million shares outstanding, and each share is traded at $100. Also, each shareholder gets a dividend of $2,000 annually. In this case, the market capitalization is A. 30,000 shares, that is, 30 million shares/$100. B. $200,000, that is, $2,000 × $100. C. $3 billion, that is, 30 million shares × $100. D. 20:1, that is, $2,000/$100.

C

Smart Feet Inc. produces shoes that are better quality and cost more to make than the shoes of its competitors. Smart Feet realizes that there will be a large difference between the cost to produce the shoes and the consumer's willingness to pay for them. Even so, Smart Feet decides to charge the same price as its competitors. Which of the following will most likely be the result of this action? A. Smart Feet will go out of business. B. Smart Feet will increase its marketability. C. Smart Feet will gain market share. D. Smart Feet will be bought by a competitor.

C

Which of the following statements about competitive advantage is true?

Competitive advantage is an absolute measure

Taking advantage of the pricing flexibility inherent in the wholesale model, Amazon offered many books below the cost that other retailers had to pay to publishers. By doing this, Amazon showed business models can be affected through

Disruption

____ of receivables turnover imply more efficient management in collecting accounts receivable and shorter durations of interest free loans to customers

Higher ratios

When using the balanced scorecard approach to asses a firms performance, which of the following is not a key question that managers need to answer?

How do we reduce the economic value created

Which of the following is an advantage of the balanced scorecard?

It allows managers to translate a firm's vision into measureable operational goals.

Which of the following expressions accurately describes market cap?

It is the product of the number of outstanding shares and the share price

Which of the following is a disadvantage of the balanced scorecard approach

It provides limited guidance about which metrics to choose.

Which of the following is a disadvantage of measuring firm performance through total return to shareholders and firm market capitalization

Market volatility makes it difficult to assess firm performance through these measures, particularly in the short term

___ are best described as the value of the best forgone alternative use of the resources employed.

Opportunity costs

Airbnb rents spaces that previously would have been unused to generate revenue, while also dramatically increasing the potential amount of accommodation space in the 191 countries. This business uses a _____ technique. A. offshoring B. crowdsourcing C. peer-to-peer D. binge watching

Peer to peer

The ratio of costs of goods sold/revenue indicates how efficiently a company can

Produce a good

In the ______ business model, the initial product is often sold at a loss or given away for free in order to drive demand for complementary goods

Razor-razorblade

_____ precisely indicates how much of a firm's sales is converted into profits.

Return on revenue

Which of the following is not true of risk capital?

Risk capital invested in a firm can be legally recovered if the firm goes bankrupt.

The three Financials ratios that constitute return on revenue are costs of goods sold/revenue, research and development expense /revenue, and

Selling, general and administrative expense/revenue

Which of the following business models has been traditionally used by the magazine and newspaper industry

Subscription based

After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress. However, the dress was priced at $80. What is the amount, $100, referred to as?

The value (V) the consumer attaches to the dress

During the process of formulating an effective business model, a firms managers should first

Transform their strategy of how to compete into a blueprint of actions and initiatives

Using the ___ approach, managers audit their companies fulfillment of its social and ecological obligations to stakeholders such as employees, customers, suppliers, and communities as conscientiously as they track its financial performance.

Triple bottom line

The receivables turnover of VK products is 13.6 and that of its competitors DL Goods is 6.0. What does this financial data primarily imply?

VK more efficient in collecting accounts receivable

___ is best described as a measure of how efficiently capital is being used by a firm to

Working capital turnover

The tenet behind the triple bottom line is that

a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.

Which of the following is an external performance metric?

total return to shareholders

In the freemium business model, the

users are not charged for the basic features of a product or service, but the user must pay for premium advanced features or add-ons.