Capstone Chap.8 Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues
1) The online community of customers increasingly mirrors the offline community but is much quicker, cheaper, and effective to reach than traditional focus groups and surveys.
A
10) After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph? A) Debt appears to be the best financing alternative. B) Stock would be the best financing alternative. C) A combination of debt and stock is probably the best financial alternative. D) Dividends must be considered before conclusions can be made. E) The company should be privately owned.
A
11) What tends to become a more attractive financing technique when interest rates are high? A) Stock issuance B) Debt C) Cost cutting D) Borrowing E) Staying privately owned
A
12) An EPS/EBIT chart can be constructed to determine the break-even point, where one financing alternative becomes more attractive than another.
A
21) In the context of a balance sheet, goodwill represents A) a premium paid over the book value for an acquisition. B) the value attached to a firm's reputation. C) the excess of assets over liabilities. D) the value associated with benefits from environmental programs. E) the excess of current assets over liabilities.
A
24) Four common corporate Valuation methods are the Net Worth Method, the Net Income Method, the Price-Earnings Ratio Method, and the Outstanding Shares Method.
A
27) According to research, the most successful new product companies use a research and development strategy that ties internal strengths to external opportunities and is linked with objectives.
A
28) R&D issues include emphasis on product or process improvements.
A
29) A major effort in R&D may be risky if technology is changing rapidly and the market is growing slowly.
A
31) The process of strategic management is facilitated immensely in firms that have an effective information system.
A
32) Information technology has made it is possible for many firms to have employees who work at home or anywhere, anytime
A
9) In low-earning periods, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival. A) debt B) liquidity C) equity D) cash E) tax liability
A
13) When additional stock is issued to finance implementation of strategy, the existing stockholders' ownership and control of the enterprise are strengthened.
B
18) The percentage-of-sales method should be used for projecting interest and taxes, but not dividends, in the income statements.
B
20) Evaluating the worth of a firm A) is an exact science. B) requires both qualitative and quantitative skills. C) is based solely on financial facts. D) is known only to the firm's accountants. E) is static
B
23) All the methods for determining a business' worth can be grouped into three basic approaches: what a firm earns, what a firm spends, and what a firm will bring in the market.
B
5) Which is NOT a required step in perceptual mapping? A) Select key criteria that effectively differentiate products or services in the industry. B) Serve two segments with the same strategy. C) Plot major competitors' products or services in the resultant matrix. D) Identify areas in the positioning map where the company's products or services could be most competitive in the given target market. E) Develop a marketing plan to position the company's products and services appropriately.
B
6) An area on a perceptual map without ideal points indicates a A) market segment. B) demand void. C) vacant niche. D) multidimensional scale. E) product reposition.
B
16) If a firm incurs a loss during a particular year, or if the firm paid out more in dividends than it had in net income, what happens to the retained earnings (RE) amount? A) It increases. B) It is unchanged. C) It decreases. D) It doubles. E) It cannot be determined from the information given.
C
22) A conservative rule of thumb is to establish a business' worth as ________ the firm's current annual profit. A) twice B) three times C) five times D) ten times E) fifteen times
C
30) Which statement is NOT true? A) Having an effective management information system may be the most important factor in differentiating successful from unsuccessful firms. B) Like inventory and human resources, information is now recognized as a valuable organizational asset that can be controlled and managed. C) Computer vulnerability has nearly been eradicated by recent innovations, and it is now possible to secure and safeguard all corporate communications, files, and business conducted over the Internet. D) In many firms, information technology is allowing employees to work at home or anywhere, anytime. E) Improved quality and service often result from an improved management information system.
C
14) What is a central strategy-implementation technique that allows an organization to examine the expected results of various strategy implementation decisions? A) EPS/EBIT B) Financial budgeting C) TOWS analysis D) Projected financial statement analysis E) External analysis
D
15) Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method? A) Cost of goods sold B) Selling expense C) Administrative expense D) Interest expense E) All of these items can be forecasted using the percentage-of-sales method.
D
19) Which item is included in net worth? A) Retained earnings B) Common stock C) Additional paid-in-capital D) All of the above are included in net worth. E) None of the above are included in net worth.
D
25) If an initial stock issuance is $800,000, what would be the expected cost paid to lawyers, accountants, and underwriters, based on the average for IPOs in this range? A) $20,000 B) $40,000 C) $80,000 D) $200,000 E) $400,000
D
3) Subdividing a market into distinct subsets of customers according to their needs and buying habits is known as A) market penetration. B) product diversification. C) market segregation. D) market segmentation. E) positioning.
D
4) Matching which factors would allow factories to produce desirable levels without extra shifts, overtime, or subcontracting? A) Markets and competitors B) Competition and positioning C) Customer behavior and positioning D) Supply and demand E) Segments and competitors
D
7) Multidimensional scaling is used in A) determining the size of a new building. B) determining the size of a new department. C) evaluating the amount of high-tech equipment a firm needs. D) perceptual mapping. E) market segmentation.
D
8) Which of these is NOT a rule for using product positioning as a strategy-implementation tool? A) Look for the hole or vacant niche, a segment of the market currently not being served. B) Do not serve two segments with the same strategy. C) Position yourself in the middle of the map, if you are one of only two competitors. D) Position yourself in the middle of the map, if there are more than two competitors. E) All of these are rules for using product positioning as a strategy-implementation tool.
D
17) Which is NOT a step in performing a projected financial analysis? A) Prepare the projected income statement before preparing the balance sheet B) Forecast sales as accurately as possible C) Use the percentage-of-sales method to project CGS D) Subtract from the net income any dividends to be paid for that year and bring this retained earnings amount over to the balance sheet E) Use the revenue account as the plug figure
E
2) Which two variables rank as marketing's most important contributions to strategic management? A) Diversification and budgeting B) Marketing penetration and competition C) Competition and collaboration D) Product development and market development E) Market segmentation and product positioning
E
26) Many U.S. firms with a large percentage of their revenues derived in foreign countries prefer to leave their cash outside the United States because using those funds to pay dividends or purchase treasury stock would A) promote foreign investment. B) decrease foreign exchange. C) inflate stock prices. D) create pressure for decreased exporting. E) require a big U.S. corporate income tax payment.
E