SRM:3172 Final

Lease Revenue Bonds

Bond Issued by municipality in which the revenue stream backing the payment of the bond is an actual lease, not just revenue from a source

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

Bond issued by a public entity

Football

NCAA v. Board of Regents affected television revenue generated from which sport?

NCAA and Conference distributions

College athletic department-allocated revenues include which of the following?

True

Each of the professional sport leagues has established rules regarding who may become an owner and join their "club".

True

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

New jobs New earnings or income New tax revenues Positive externalities

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

None of the Above

For Division I-FBS Group of 5 conferences, increased revenue depends on which of the following?

Number of corporations of a certain size in the area

For a recreation facility such as a water park, which of the following factors is not likely to be part of the feasibility analysis?

Football

For schools in Division I-FBS conferences, where does the largest portion of the athletic program's revenues come from?

General Obligation

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

A Comparable Analysis

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

Induced Economic Impacts

Impacts on earnings and employment are which of the following?

True

Not measuring opportunity cost causes the overestimation of economic impact.

A valuation is always certain

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

Donations

Of the following, which is NOT a form of equity financing?

Market demand Economic and fiscal impact Financing Location, construction costs, and engineering

Of the following, which is a main part of a feasibility study?

The know someone in the athletic department or know something about the department, and they believe in someone working for the department or believe in something that the academic insitution or athletic department represents.

Of the following, which is a trait of a typical major donor?

Demand for services has increased The type and variety of services and facilities have increased Programs are now designed to appeal to a broad demographic

Of the following, which is a trend impacting financial management in public sector sport facilities?

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

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

Controlling interest Marketability Synergistic premium

Of the following, which is not an adjustment made to determine the value of a specific ownership interest?

The approach encourages managers to spend up to the budget to ensure that the budget is maintained the following year.

Of the following, which is not an advantage of incremental budgeting?

Not Capital Finance

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

True

Joint use agreements and public/private partnerships are collaborations between the public and private sectors.

False

A personal seat license is typically valid for the life of the facility.

Annuity

A series of equal payments or receipts made at any interval of time is referred to as which of the following?

Rule of Thirds

According to which gift table rule does the top 10 gifts to a capital campaign account for 33% of the campaign's total goal and the next 100 gifts account for an additional 33%?

Real Property

Land, buildings constructed on land, and improvements made to land are known as which of the following?

Incremental Budgeting

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

Players Salaries Free Agency Player Drafts

Leagues have created rules and policies to improve competitive balance. What do these rules and policies typically relate to?

Risk of Time

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

False

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

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

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

C Corporations

The major 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.

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.

St Louis Spirits

The owners of which franchise agreed to a perpetuity when they negotiated to fold their team after the ABA and NBA merger.

Afforable pricing for public programs combined with lower tax revenues Providing a mulitude of affordable programs Operating as self sufficient entities Generating revenues to offset expenses not covered by a tax subsidy

The pricing paradox related to public sector sport is a result of which of the following?

Discount Rate

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

False

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

Program Planning Budgeting Systems

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

Zero Based Budgeting

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

Time switcher

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?

Casual Visitor

This type of individual comes to a community for one event while also attending a basketball game. If a university is performing an economic impact study of its basketball team, this individual would be classified as what kind of visitor?

Cost Approach

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

Market Approach

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

Financial Management

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?

Investments

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

There is no familial relationship The parties have no financial relationship.

To be at arms' length means that __________.

Winning championships Seeking celebrity status Protecting a community asset

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 __________.

Discounted Payback Period

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.

Cost Approach

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

Double-declining balance

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?

Conduct a Post-Audit Analysis

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

Property Tax

Which of the following is the most common tax source used to fund the construction and operation of public sector sport facilities?

Payback Period

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

Negotiate national television contracts Establish relationships with vendors for league-wide licensed merchandise sales Hire and supervise game officials Negotiate a collective bargaining agreement with the players' union

Which of the following is the responsibility of the commissioner's office under the franchisee/franchisor league structure?

Present Value

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

Indirect Economic Impacts

Which of the following occur in the area of impact representing the circulation of initial visitor expenditures?

Real Value

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

Modified Zero Based Budgeting

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?

Debt Ratio

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

Inventory Turnover Ratio

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

Corporate Demand

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

Market Demand

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

Revenue Bond

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?

Kansas City

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?

Market Value

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

True

An indirect source of public financing is infrastructure improvements.

Revenue Budget

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

True

Another name for a university's athletic support group is a booster club.

A competitive Analysis

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

False

Department-generated revenues are revenues that the school transfers to the athletic department.

Individual Ticket Demand

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

NFL

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?

Production opportunities Time preferences for consumption Risk Inflation

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?

NFL

In which league was Pete Rozelle commissioner and developer of the idea of "league think"?

Event Activity

In which section of the feasibility study are the needs of attendees and event property owners calculated?

Facility specifications and operating estimates

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

Income Approach

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

True

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

True

NFL teams share the highest percentage of gate receipts with visiting teams.

True

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

False

Public sector sport is offered for its profit potential.

Investments

Security choices made by individual an institutional investors as portfolios are being built

True

Sin taxes are taxes on alcohol and cigarettes.

True

The NBA recently used a pooled-debt instrument to assist financially struggling franchises.

....

The NCAA distributes revenue to member institutions based on a specific formula. Of the following, which is a criteria for establishing the amount of revenue a member receives?

Income Statement

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

False

The assessed value of a property is equal to its fair market value.

Demand Scarcity Price

The choices that individuals and organizations make regarding financial management are influenced by which of the following?

True

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

Television and Marketing Right Fees

What are the primary sources of NCAA revenues?

Induced Economic Impacts Indirect Economic Impacts

What does the multiplier effect measure?

Not Inflation Risk

What is a measure of risk or uncertainty of time?

Level of Risk

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

Prime Rate

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

Debt

When an organizations borrows money that must be paid back over time, usually with interest.

....

When constructing a survey to measure direct spending at an event, the following question is designed to determine the type of visitor. Survey Question: "Does this visit to Houston replace any other past/future visit to this area?"

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

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

Not: Determine whether the facility will genereate enough revenue to maintain the facility

When selecting the type of bond to use when building a recreation facility, a municipality must do which of the following?

Scarcity

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?

An opportunity Cost

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?

Not: Arms race

Which factor is driving up the operating costs of a college or university athletic department?

NFL

Which league prohibits the publicly traded ownership model?

MLB

Which league's salary slotting system encouraged the Houston team to make their on-field product particularly terrible from 2009-2013?

Balance sheet

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

A Minority Discount

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

Inflation Rate

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