chapter 5 learnsmart
When one wants to further explore the difference in return on revenue (ROR) for two competitors, one can look at which of the following ratios? (Check the three that apply.) Multiple select question. R&D expense/revenue SG&A expense/revenue COGS/revenue cash/revenue
R&D expense/revenue SG&A expense/revenue COGS/revenue
sustainable strategy
a strategy that can be pursued overtime without detrimental effects on people or the planet
Which of the following are elements of the social dimension of the triple bottom line? Multiple select question. improving recycling efforts achieving work/life balance human sustainability reducing overhead costs
achieving work/life balance human sustainability
oppurtunity cost
capture the value of the best forgone alternative use of the resources employed
Market Capitalization
captures the total dollar market value of a company's total outstanding shares at any given point in time (Market cap= number of outstanding shares x share price)
Public companies are required by law to release detailed accounting data, which enables ______. Multiple choice question. a balanced scorecard system economic value creation comparative analysis of firms shareholder value creation
comparative analysis of firms
Multiple Choice Question The firm's accounting profitability, ability to create shareholder value, and ability to generate economic value tend to be ______. Multiple choice question. perpendicularly related correlated unrelated unrealistically bound
correlated
Economic value created is the ______ the cost to produce a product/service and the amount the buyer is willing to pay for it. Multiple choice question. lesser of either difference between greater of either total sum of
difference between
The difference between the cost of producing a product and the price consumers are willing to pay for that product is known as ______. Multiple choice question. economic value created a profit margin overhead derivative pricing stock price appreciation
economic value created
The pay-as-you-go model is ______. Multiple choice question. becoming increasingly niche dying out gaining momentum difficult to apply outside its traditional functions
gaining momentum
A company's stock price increases if the company ______. Multiple choice question. was predicted to grow as fast as the DJIA, and it did exactly as was expected grows faster than expected demonstrates potential to shrink without reducing profit has a growth rate of at least 10%
grows faster than expected
COGS/Revenue
indicates how efficiently a company can produce a good
risk capital
money they provide in return for an equity share, money that they cannot recover if the firm goes bankrupt
triple bottom line
profits people planet
From the view of a shareholder, the measure of competitive advantage that matters most is return on _____. Multiple choice question. invested capital assets risk capital revenue
risk capital
reservation price
the maximum price a consumer is willing to pay for a product or service based on the total perceived consumer benefits
Balanced Scorecard
this approach harnesses multiple internal and external performance metrics in order to balance both financial and strategic goals
Wholesaling is considered a(n) ______ business model. Multiple choice question. unsuitable traditional groundbreaking revolutionary
traditional
In a subscription-based business model, customers pay for ______. Multiple choice question. access to a product or service premium service an agent to sell a product actual usage
access to a product or service
what are the 3 standard performance dimensions?
accounting profitability shareholder value economic value
economic value created
is the difference between a buyer's willingness to pay for a product or service and the firm's total cost to produce it
When you join the vehicle-sharing company Zoooomm, you are allowed to use a motorized scooter whenever you like, though you do not have to own the machine. You have to pay by the hours of usage. Zoooomm operates on a ______ model. Multiple choice question. razor-razor-blade triple bottom line pay-as-you-go subscription-based
pay-as-you-go
If Tom would have paid $1,000 for a new laptop but was able to purchase one for $800, the $200 he saved is considered his ______. Multiple choice question. consumer surplus reservation price economic value producer surplus
consumer surplus
Which of the following dimensions make up the triple bottom line? (Check all that apply.) Multiple select question. ecological social economic international
ecological social economic
Which of the following are standard performance dimensions for a company? (Check all that apply.) Multiple select question. how much economic value a firm generates a firm's accounting profitability the fixed and variable costs how much shareholder value a firm creates how a firm's mission statement relates to its strategic intent
how much economic value a firm generates a firm's accounting profitability how much shareholder value a firm creates
Which of the following industries use a subscription model? (Check all that apply.) Multiple select question. Cellphone providers Magazines Internet providers Car rental
Cellphone providers Magazines Internet providers
To determine how well money devoted to sales support is being spent, managers look at the marketing intensity ratio, which is also known as ______. Multiple choice question. COGS/revenue revenue/fixed assets COGS/inventory SG&A/revenue
SG&A/revenue
When a company offers video-game consoles at a steep discount, but charges customers high fees for games, they are operating on a ______ business model. Multiple choice question. razor—razor-blade motivator-motivation pay-as-you-go wholesale
razor—razor-blade
To determine how efficiently a company can produce a good, managers look to the ______. Multiple choice question. SG&A/revenue ratio COGS/inventory ratio COGS/revenue ratio R&D/revenue ratio
COGS/revenue ratio
Which of the following statements is true about a firm's stock price? Multiple choice question. The price tends not to reflect accounting profitability. The price is not correlated with the firm's economic value creation. The price determines in part the stock's market valuation. The price is calculated exactly from the firm's accounting profitability.
The price determines in part the stock's market valuation.
Which of the following correctly describe the information used for comparing the performance of public companies based on accounting profitability? (Check all that apply.) Multiple select question. The relative performance is evaluated using standardized financial metrics. The information must be purchased from private investment banks. The information is filed in a 10-K report. The information is derived from such data as income statements and balance sheets.
The relative performance is evaluated using standardized financial metrics. The information is filed in a 10-K report. The information is derived from such data as income statements and balance sheets.
A firm uses the ______ business model when it sells a set of products that have different levels of demand for a price less than their total combined prices. Multiple choice question. subscription razor--razor-blades wholesale bundling
bundling
What is one potentially negative outcome that firms face when they deliver higher than expected growth? Multiple choice question. Unexpected levels of growth anger investors, even if the growth is positive. Investors will expect a similarly high level of growth in the future. There is little to no chance that they will ever experience the same level of growth. Higher than expected growth typically has a negative effect on stock prices.
Investors will expect a similarly high level of growth in the future.
Select all that apply When one wants to further explore the difference in return on revenue (ROR) for two competitors, one can look at which of the following ratios? (Check the three that apply.) Multiple select question. R&D expense/revenue COGS/revenue cash/revenue SG&A expense/revenue
R&D expense/revenue COGS/revenue SG&A expense/revenue
To determine a product's producer surplus, which of the following must be compared? (Check all that apply.) Multiple select question. Total cost of production The overhead costs Sunk costs Price charged
Total cost of production Price charged
The acronym SG&A stands for sales, general, and ________ expenses.
administrator
When a person decides to quit his or her job and start a company, the salary that person gave up when quitting can be considered ______. Multiple choice question. a probability cost an opportunity cost a value cost an non-recoupable cost
an opportunity cost
Under a wholesale model, RETAILERS (not the wholesalers) sell goods for ______. Multiple choice question. less than the suppliers sell them for less than they could be purchased elsewhere any price they want a steep discount
any price they want
When a firm goes bankrupt, shareholders ___. Multiple choice question. are entitled only to a fraction of their investment can sue for loses cannot recover their risk capital are entitled to help pay off debtors owed money by the firm
cannot recover their risk capital
When implementing the razor-razor-blade strategy, companies make their profit from: Multiple choice question. complementary goods. subscription fees. initial products. razors.
complementary goods.
In order to determine market capitalization, one multiplies which of the following together? (Check all that apply.) Multiple select question. number of outstanding shares share price total market value value of the dollar
number of outstanding shares share price
Opportunity costs refer to the value of what could have been gained had a person pursued ______. Multiple choice question. profits in the stock market instead of the economic market economic value creation accounting profitability instead of business profitability an alternative use of his or her resources
an alternative use of his or her resources
Everybody can use the basic version of Dropbox for free, but needs to pay for premium services. Dropbox operates on a ______ business model. Multiple choice question. subscription-based razor-razor-blades freemium premium
freemium
The balanced scorecard framework draws from which of the following? Multiple choice question. from external metrics only from multiple internal and external performance metrics from internal metrics only from the same metrics applied to internal resources and the external environment
from multiple internal and external performance metrics
SG&A/Revenue
indicates how much of each dollar that the firm earns in sales is invested in sales, general, and administrative (SG&A) expenses. Generally, this ratio is an indicator of the firm's focus on marketing and sales to promote its products and services.
Premium services cost money with complementary basic services, is a description of which type of business model? Multiple choice question. Freemium Subscription Wholesale Pay-as-you-go
Freemium
The Luminarium Corporation has a market capitalization of $100,000,000, and each share is worth $100. How many outstanding shares of Luminarium Corporation are there? Multiple choice question. 1,000,000 50,000,000 10,000,000 1,000
1,000,000 $100,000,000/$100 per share = 1,000,000 shares
True or false: When a user values two products equally, they are negatively correlated.
False
When managers analyze a wide variety of internal and external performance metrics in order to set financial and strategic goals, they often turn to a framework known as ______. Multiple choice question. the balanced scorecard shareholder analysis the accounting metric framework strategic emergence
the balanced scorecard
The most a consumer is willing to pay for a product is equivalent to the product's ______. Multiple choice question. traceable asset value on the stock exchange economic value created total perceived consumer benefits price relative to all costs, including overhead
total perceived consumer benefits
