# Mixed112

American Intellectual Union

Using our data set from Unit 1, compose a 3-page e-mail to the head of the American Intellectual
Union, which includes the following:
Begin your e-mail to AIU by first providing an overview of the database, that is, a story about the characteristics that may include types of variables, etc.
Be sure to include information about where statistics are being used in the workplace.
Explain the value of statistics and its contribution to the success of an organization.
Then, discuss the following in your e-mail:
What is the distribution of individuals by gender?
What is the “tenure with company” distribution by gender?
What percentage of the survey participants are in each department?
What is the sample mean for extrinsic value by gender?
What is the probability that an individual will be between 1621 years of age?
What is the probability that an individuals overall job satisfaction is 5.2 or lower?
What is the probability that an individual will be a female in the human resources department?
What is the probability that an individual will be a salaried employee whose intrinsic satisfaction value is 5 or more?
RESEARCH REQUIRED: Be sure to include other ways that probability is used in business specifically how it contributes to the success of an organization. Feel free to use the Business Source Premier Database in the Library as a resource to research.
The e-mail should be well written and should flow well. It should comprise the body of a report that contains no grammatical errors. The report should include proper citation in APA formatting in both the in-text and reference pages and include a title page, be double-spaced and in Times New Roman 12-point font. APA formatting is necessary to ensure academic honesty.

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Probability

There are three (and only three) paths through a network (project), each with a probability of completion in less than 24 months as indicated:
a. S-a-b-F P1(<24) = .95
b. S- d-e-F P2(<24) = .85
c. S- g-h-F P3(<24) = .90
If the tasks are independent, what is the probability of the network being completed within 24 months? Note: S is the start node, F is the finish node.

Show all work.

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Multiple Choice

1. Ed contracts with Nathan to kill Nathan’s mother-in-law for \$1,000. Which element of consideration is missing from this contract?

A. All the elements of consideration are present
B. Legality of consideration
C. Consideration wasn’t a bargained-for exchange

2. At his 80th birthday party, Graham declares that Elsie is his favorite grandchild and that he will leave Elsie \$100,000 on his death. Sadly, Graham dies just three days later. No provision of his will leaves Elsie the \$100,000. Elsie files a breach of contract claim against Graham’s estate. The most likely result is that Elsie will lose because no contract existed due to lack of

A. agreement and consideration.
B. contractual capacity and form.
C. contractual capacity and consideration.
D. form and agreement.

3. Juan thinks he would like to purchase Tara’s house, but doesn’t know whether he will be able to save enough money for a down payment on a loan. Juan agrees to give Tara \$5,000 for the option to purchase her house for \$150,000 sometime within the next five years. Juan and Tara reduce their agreement to writing, sign it, and Juan gives Tara \$5,000. Two years later, Juan wins the lottery and now is financially able to purchase Tara’s house. However, that same day Juan receives a letter from Tara revoking her offer to sell for \$50,000. Which of the following is true?

A. Tara’s revocation is effective as long as she refunds the \$5,000.
B. Juan can’t complain because he failed to accept Tara’s offer before it was revoked.
C. Tara’s revocation is effective.
D. Tara’s revocation isn’t effective.

4. Esther lives with a caregiver on whom she is greatly dependent and trusts. The caregiver persuades Esther to sign a contract with the caregiver that greatly favors the caregiver. If the contract is set aside, it will likely be on what grounds?

A. Mistake
B. Duress
C. Fraud
D. Undue influence

5. Tom is selling his motorcycle to Carl. Tom tells Carl that the motorcycle runs perfectly, though he knows that the motorcycle leaks oil. Carl purchases the motorcycle and discovers the problem. Which of the following is true?

A. Tom committed active fraud.
B. Tom committed passive fraud.
C. Tom committed fraud in the inception.
D. Tom hasn’t committed fraud.

6. Carlos promises to pay \$100 for someone to paint his house. Timothy hears about the offer and paints Carlos’s house on 123 Oak Street. However, Carlos intended that his other house, at 456 Maple Street, be the one to be painted and refuses to pay Timothy, claiming that there’s no contract because they never discussed which house would be painted. If Carlos has a legal right to payment, it’s most likely based on

A. implied-in-law contract.
B. implied-in-fact contract.
C. express contract.
D. fraud.

7. Delivery of unordered merchandize is considered

A. a contract to purchase unless the recipient contacts the sender to reject the merchandize.
B. a contract to purchase if the items aren’t returned.
C. performance of a contract.
D. an offer to sell.

8. Carrie decides to offer Shelley the opportunity to purchase her motorcycle for just \$500. Carrie told Jim, a mutual friend of Shelley and her, that she intended to make the offer. Later, Carrie changes her mind. Shelley approaches Carrie and says she accepts the offer. No contract was formed most likely because

A. Carrie never communicated the offer to Shelley.
B. Jim was acting as an agent for Shelley without telling Carrie.
C. the terms of the offer weren’t definite enough to form a contract.
D. Carrie didn’t possess a serious, objective intention.

9. On the Internet, Sara came across a software package she wanted to download. To download the software, she had to read a disclaimer and click an “I Agree” button. Sara didn’t bother to read the contents of the “Agreement and Warranties” disclaimer, but she clicked “I Agree.” The software caused her computer to crash. Sara filed suit against the company that ran the Web site, and the company’s defense is that the “A
greement and Warranties” disclaimer to which Sara agreed disclaimed any responsibility for such occurrences. The most likely result is that Sara will

A. win her lawsuit because she didn’t the read disclaimer.
B. lose her lawsuit because she didn’t read the disclaimer, which isn’t enforceable.
C. lose her lawsuit because the disclaimer will be enforced.
D. win her lawsuit because disclaimers aren’t enforceable.

10. Daisy contracts with Mike that in exchange for \$50 Daisy won’t whistle for a week. This contract is

A. unenforceable due to fraud.
B. not enforceable due to lack of consideration.
C. enforceable only if Daisy is a musician who whistles for a living and would suffer significant income loss by not whistling for a week.
D. enforceable.

11. Eric, a 17-year-old, signs a contract with the armed services to enlist. Later, Eric changes his mind and wants out of the contract. Can he void the contract based on incapacity to contract?

A. Yes, after he turns 18
B. Yes
C. No
D. In some states

12. Which of the following is a necessary element both for fraud and for misrepresentation?

A. A false statement
B. A fiduciary relationship
C. A hidden problem
D. The intent to deceive

13. Regan marries at age 17. Then, she enters into a contract with Art to purchase an automobile for \$10,000. She later changes her mind and wants to void the contract. Which of the following is true?

A. Regan can’t void the contract because she is over 15.
B. Regan can void the contract because she is married.
C. Regan can’t void the contract because she is married.
D. Regan can void the contract because she is a minor.

14. Dave is declared insane and committed to an asylum. Dave escapes and goes to a car dealership, where he enters into a contract with Larry to buy a sports car. Which of the following statements is true?

A. Only Larry can void the contract.
B. Because Dave is legally insane, the contract is void.
C. To void the contract, Dave must prove he is insane.
D. Only Dave can void the contract.

15. Jacques offers to paint Alisha’s house for \$100. Before Alisha responds, Jacques dies. Which of the following statements is true?

A. A representative of Jacques’s estate must find someone to paint Alisha’s house.
B. A representative of Jacques’s estate must paint Alisha’s house for \$100.
C. There’s no contract because Alisha failed to accept Jacques’s offer before he died.
D. Jacques’s offer has been revoked.

16. Jackie tells a group of friends that she plans to sell her home. Meg asks how much Jackie hopes to get for the house, and Jackie replies, “\$50,000.” Meg says, “I accept your offer. I’ll purchase your house for \$50,000.” No contract exists because

A. the terms of the offer aren’t reasonably certain.
B. Jackie doesn’t seriously intend to enter a contract.
C. Jackie’s statements are merely preliminary negotiations.
D. the offer isn’t properly communicated.

17. Josh runs over Barbara’s dog. Barbara promises not to sue Josh if he pays her \$200. Josh pays \$200. Then Barbara sues, claiming an agreement not to sue doesn’t constitute consideration. Which of the following is true?

A. Such contracts violate public policy and therefore are unenforceable.
B. Agreement not to sue is consideration only if it approximates what a court would have awarded.
C. Agreement not to sue isn’t consideration.
D. Agreement not to sue is consideration.

18. Lance e-mails Fred, offering to buy his motorcycle for \$750. Fred replies, agreeing. Later, Fred declines to honor the agreement, claiming that e-mail agreements aren’t enforceable. In both the initial e-mail and the reply Lance and Fred typed their names. Which of the following is true?

A. There’s no contract because the e-mails weren’t witnessed.
B. There’s no contract because contracts must have hand-written signatures to be enforceable.
C. There’s no contract because e-mail agreements aren’t enforceable.
D. The e-mails constitute a contract if Lance and Fred have agreed that electronic signatures can be used to create the agreement.

19. Tyler offers to dance naked on Main Street if Corey will mow Tyler’s yard. Corey mows Tyler’s yard. Which of the following statements is not potential grounds for setting aside the contract?

A. Illegality of consideration
B. Lack of serious intent to contract
D. All of the above are potential grounds for setting aside the contract

20. Jack is a mature-looking 17-year-old who lives at home with his parents. Jack wants to purchase an automobile. Jack goes to Discount Car Sales, where Bud, the car salesman, never considers that Jack may be a minor. Bud sells Jack a car, with the agreement that Jack will pay Bud \$100 per month over the next five years for the car. Which of the following is true?

A. Bud can hold Jack’s parents liable for Jack’s contract, because Jack was a minor living in their home at the time the contract was formed.
B. Bud can disaffirm the contract because of Jack’s status as a minor at the time the contract was formed.
C. Jack can disaffirm the contract because of his status as a minor at the time the contract was formed.
D. Despite Jack’s status as a minor, Bud can prohibit Jack from disaffirming a contract for a necessary (or basic) need.

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Multiple Choice

1. Danielle purchases life insurance on her own life with Big Life Insurance and makes her husband, Walter, the beneficiary. Which of the following statements is true?

A. Danielle is a donee beneficiary.
B. Danielle is an intended third-party beneficiary.
C. Big Life Insurance is a creditor beneficiary.
D. Walter is a donee beneficiary.

2. Jessica orally agrees that she will sell 400 pairs of flip-flops to a customer for \$600. This agreement is

A. unenforceable because of the statute of frauds.
B. unenforceable because all necessary elements aren’t met.
C. enforceable because all necessary elements are met.
D. unenforceable because of the parol evidence rule.

3. James leases an apartment to Kyle for \$900 per month rent. The written lease contains no prohibition against assignment, nor does it expressly permit assignment. Kyle assigns his rights to Harley without any consideration. James finds out and objects. The assignment is

A. invalid because James didn’t consent to the assignment.
B. valid because the written lease didn’t prohibit it.
C. invalid because the lease didn’t expressly permit assignment.
D. valid because there’s no consideration for the assignment.

4. Warren agrees to paint Abby
‘s restaurant for \$1,000. Warren fails to paint. Abby may be entitled to punitive damages if

A. Warren doesn’t know how to paint, misrepresented himself as a painter, and never intended to paint.
B. Abby loses profits as a result of the breach.
C. Abby has to pay substantially more than \$1,000 for someone else to perform the job.
D. the contract breached was both written and witnessed.

5. Paul enters into a contract with Harry. Paul agrees to put a new roof on Harry’s house, and Harry agrees to pay Paul \$5,000. Paul is late on a payment to Sam’s Supply House and tells Sam’s Supply House that he will pay when he receives money from Harry. Sam’s Supply House has heard this from Paul before and didn’t receive money. To ensure Paul pays his payment from the money Harry pays him, Sam’s Supply House can

A. tell Harry that Paul is indebted to Sam’s Supply House, which automatically makes them a creditor beneficiary entitled to the payment.
B. have Paul assign his interests under the contract with Harry to Sam’s Supply House.
C. require an accord and satisfaction be entered into.
D. have Harry assign his interests under the contract with Paul to Sam’s Supply House.

6. Coretta and Mary find a property to purchase. They sign a written agreement that states the agreed-on price, closing date, and items that are to stay in the house. They forget to include the washer and dryer in the agreement, but the seller tells them he will leave them if they want them. Right before closing, they walk through the property and find that the washer and dryer have been removed. They purchase the property and sue the seller for not leaving the washer and dryer. Coretta and Mary most likely

A. won’t win based on the statute of limitations.
B. won’t win based on the statute of frauds.
C. will win based on the seller’s representation when they looked at the property.
D. won’t win based on the parol evidence rule.

7. Collin purchases a house, using a loan from Big Bank. As a condition of the loan, Big Bank requires that Collin purchase life insurance payable to Big Bank, to the extent of the outstanding mortgage, if Collin dies before fully paying the mortgage. Big Bank is

A. an incidental beneficiary but not a donee beneficiary.
B. both a creditor beneficiary and a donee beneficiary.
C. a creditor beneficiary but not a donee beneficiary.
D. an intended beneficiary but not a donee beneficiary.

8. Which of the following is an example of discharge by operation of law?

A. Xavier agrees to paint Rita’s house for \$1,000. Before Xavier can paint, Rita’s house burns down.
B. Xavier agrees to paint Rita’s house for \$1,000. Rita later tells Xavier that she won’t pay him. As a result, Xavier decides not to paint.
C. Xavier agrees to paint Rita’s house for \$1,000. Rita changes her mind and asks Xavier not to paint. Xavier agrees.
D. Xavier agrees to paint Rita’s house for \$1,000. Xavier paints, but before Rita pays him, she files bankruptcy. As a result, Xavier doesn’t get paid.

9. Sara purchases life insurance on her own life and makes her husband, Dean, the beneficiary. Sara dies. Dean applies to the insurance company for payment of the proceeds. The insurance company denies payment, pointing out that Dean didn’t sign the contract and therefore doesn’t have privity of contract. Dean is

A. entitled to the proceeds as an incidental beneficiary.
B. entitled to the proceeds because he was married to Sara.
C. not entitled to the proceeds because he doesn’t have privity of contract.
D. entitled to the proceeds as an intended beneficiary.

10. Robert contracts to paint Jake’s house for \$500. Robert then asks Elmer to perform the painting work for him. Elmer does a bad job, and Jake wants to sue for breach of contact. Which of the following is true?

A. Robert isn’t responsible if he gave Jake notice of the delegation.
B. Robert is responsible for the breach of the contract only if there has been a novation.
C. Robert is responsible for the breach of the contract.
D. Elmer, but not Robert, is responsible for the breach.

11. Candice hires Otto to work as a tax preparer in Candice’s tax return business. The employment contract restricts the ability of Otto to set up a competing business or engage in tax preparation services if Otto leaves Candice’s employ. Otto discovers he likes this kind of work and wants to set up his own tax return business. He asks you whether the restrictions in his contract with Candice will be enforceable. You should tell him that

A. restrictive covenants regarding future employment will be enforceable if the value of the consideration given for the covenant equals the value of the income loss that would be caused by enforcing the agreement.
B. any restriction regarding employment will be enforceable as long as there was adequate consideration.
C. restrictive covenants regarding future employment will be enforceable if they’re reasonable.
D. any restriction regarding employment is unenforceable as against public policy

12. Under tenant Lester’s lease contract with landlord Mary, Lester must pay an extra \$25 if his rent is more than five days late. This is an example of __________ damages.

A. punitive
B. consequential
C. liquidated
D. nominal

13. Denise orally authorizes Shaun to sell her house. Shaun enters into a written agreement with Eric to sell him the house for \$140,000. Both Shaun and Eric sign the contract. Denise learns of the agreement after the fact and decides she doesn’t want to sell. If the contract is ruled unenforceable, the most likely reason is the __________ rule.

A. fairness
B. parol evidence
C. equal dignities
D. best evidence

14. Jack and Jane formed a contract in which Jack agreed to sell Jane a large amount of apples. Jack knew that Jane planned to resell the apples at the farmers’ market the following weekend. Jack failed to deliver the apples as promised. Jane will most likely be able to recover

A. both nominal and punitive damages.
B. compensatory damages only.
C. punitive damages only.
D. both compensatory and consequential damages

15. Jordan is charged with a crime, and Jeff is chosen to be on the jury. Jordan offers to pay Jeff \$500 if he votes not guilty. Jeff does so, but Jordan refuses to pay. Jeff sues Jordan for breach of contract. Jeff will

A. win because of the statute of frauds.
B. lose because the contract is usurious.
C. lose because the contract is against public policy.
D. win because Jordan materially breached.

16. Tom and Zeke enter into a contract for Tom to paint Zeke’s house for \$1,000. The contract doesn’t specify a time for performance by Tom. Six years later, Tom shows up with a bucket of paint, paints the house, and demands payment. Which of the following is true?

A. Tom couldn’t have breached the contract because the contract didn’t specify a time for performance, and he did do the painting work.
B. The contract violates the statute of frauds.
C. Tom breached the contract because he didn’t perf
orm within a reasonable time.

D. The contract was unenforceable because it didn’t specify a time for performance.

17. Bella and Connie are struggling to find jobs. They decide they want to open a child daycare center together. They see a house in the perfect neighborhood with a “For Sale by Owner.” They talk to the owner, reach an agreement, and shake hands. Just before the closing on the house, at which they’ll take ownership of the house, the owner decides not to sell to Bella and Connie. They tell the owner they’re going to sue him for breach of contract. Bella and Connie most likely

A. will win because the owner shouldn’t have entered into a contract with them if he wasn’t sure he wanted to sell the house.
B. will win because the owner breached his agreement to sell them the house.
C. won’t win because they can find another house that will work just as well.
D. won’t win because they shouldn’t have entered into an oral contract to buy the house.

18. Which of the following is an example of discharge by impossibility?

A. Jason agrees to paint Sheila’s house for \$1,000. Sheila changes her mind and asks Jason not to paint. Jason agrees.
B. Jason agrees to paint Sheila’s house for \$1,000. Sheila later tells Jason that she won’t pay him. As a result, Jason decides not to paint.
C. Jason agrees to paint Sheila’s house for \$1,000. Before Jason can paint, Sheila’s house burns down.
D. Jason agrees to paint Sheila’s house for \$1,000. Jason paints, but before Sheila pays him, she files bankruptcy. As a result, Jason doesn’t get paid.

19. Tom and Zeke go out to a restaurant for dinner. Tom orders a steak, and Zeke orders lasagna. After they’ve finished eating, they pay their bill. Assuming all parties performed in the order they were required to under this contract, which of the following is true?

A. Service and payment were conditions concurrent.
B. Payment was a condition precedent to service.
C. Service was a condition precedent to payment.
D. There was no contract.

20. Tom and Zeke enter into a contract for Tom to paint Zeke’s house for \$1,000 by August 5th. Tom paints half of the house on August 6th, then demands pay. Which of the following is false?

A. Tom may not be in breach if the contract doesn’t make time of the essence.
B. Tom’s duties are discharged under the doctrine of substantial performance.
C. The contract doesn’t violate the statute of frauds.
D. Zeke may have to pay if payment is a condition precedent to the duty to paint.

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Multiple Choice

Question 1
Which of the following is NOT a characteristic of the market?
A. Aggressive competitors
B. Demanding creditors
C. Patient stockholders
D. Aggressive vendors

Question 2
Which of the following is the textbook definition of a sustainable ethical culture?
A. It must persist within the operational policies of the organization long after the public scandal or the latest management buzzword.
B. It must have been in place for at least a decade.
C. It must have been effective, therefore, avoid any scandals or wrong-doing.
D. It must be defined by top management with little input from employees.

Question 3
Which of the following is the FIRST stage in creating a long lasting ethical culture?
A. Support the code of ethics with extensive training for every member of the organization
B. Establish a code of ethics
C. Hire an ethics officer
D. Promote your organizations commitment to ethical behavior

Question 4
Which of the following is the LAST stage in creating a long lasting ethical culture?
A. Continue to monitor the behavior as you grow
B. Establish a code of ethics
C. Celebrate and reward the ethical behavior demonstrated by your employees
D. Promote your organizations commitment to ethical behavior

Question 5
A well written code of ethics can do all the following EXCEPT:
A. state policies for behavior in specific situations.
B. capture what the organization understands ethical behavior to mean.
C. establish a detailed guide to unacceptable behavior.
D. document punishments for violations of those policies.

Question 6
The audience for the code of ethics would be:
A. investors.
B. stakeholders.
C. employees.
D. customers.

Question 7
According to the textbook, there is (are) __________ perfect model(s) for a code of ethics.
A. several
B. a few
C. one
D. no

Question 8
Which of the following is NOT a consideration in creating a code of ethics from scratch?
A. Get endorsement from management from various levels
B. Find a champion
C. Pick a well-tested model
D. Try it out first

Question 9
According to the textbook, why is it important to support the published code of ethics with an extensive training program?
A. The code will likely be difficult for employees to understand.
B. Only parts of the code will be applicable in each department.
C. The code cant incorporate every example so employees need to understand how to apply it to new situations.
D. Employees must go on to train vendors on the code of ethics.

Question 10
Which of the following is NOT an objective of departmental ethics training?
A. Recognizing the ethical issue
B. Discussing options for an appropriate response
C. Selecting the best option for the organization
D. Comparing the ethical issue to the code of ethics

Question 11
The hiring of a(n) __________ represents a formal commitment to the management and leadership of an organizations ethics program.
A. chief operations officer
B. ethics officer
C. conduct officer
D. organizational officer
Question 12
__________ is the chief responsibility of an ethics officer.
A. Establishing company policies and procedures
B. Overseeing investigations of wrong doing
C. Oversight of hotline/guideline/internal reporting
D. Training design

Question 13
According to the textbook, if standards of behavior are specified in the code of ethics along with the punishment served for failing to follow those standards, your ethics program can be perceived by employees to be:
A. very harsh.
B. fair.
C. s
tagnant.

D. flexible.

Question 14
According to the textbook, threats of punishment in a code of ethics must be:
A. delivered fairly.
B. congruent with the companys ethics.
C. balanced with promised rewards for successful behavior.
D. delivered equally.

Question 15
An ethics policy commits you to doing the right thing for all your stakeholders, therefore the message must be shared with all your:
A. shareholders.
B. customers.
C. stakeholders.
D. government.

Question 16
Any organizations commitment to ethical performance must be watched:
A. annually.
B. quarterly.
C. periodically.
D. constantly.

Question 17
__________ policies refer to organizations that maintain open and honest communications with all stakeholders.
A. Transparent organization
B. Opaque organization
C. Open organization
D. Closed organization

Question 18
When a company develops a clear sign of what it stands for as an ethical organization, this is known as:
A. responsive ethical policies.
B. reactive ethical policies.
C. receptive ethical policies.
D. proactive ethical policies.

Question 19
When a company is driven by events and/or a fear of future events, this refers to ______ ethical policies.
A. transparent
B. reactive
C. proactive
D. passive

Question 20
Recognizing the concept of business ethics allows us to categorize behavior as unethical, but when one is looking to manage the reputation and policies of an organization, the commitment to doing the right thing becomes more about __________ than any sense of a written ethics policy.
A. perception
B. culture
C. integrity
D. management

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Multiple Choice

1
Question: Accounting generally has the responsibility for
A             Setting company goals
B             Expressing the budget in financial terms
C             Enforcing the budget

Question: Meyerhoff Company has the following budgeted sales: July \$100,000, August \$150,000, and September \$125,000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during September are
A             \$140,000
B             \$132,500
C             \$131,250
D             \$125,000

Question: Lester Production is planning to sell 600 boxes of ceramic tile, with production estimated at 580 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs \$0.50 per pound and employees of the company are paid \$15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Lester has 2,600 pounds of clay mix in beginning inventory and wants to have 3,000 pounds in ending inventory.
What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
A             25,520
B             25,120
C             25,920
D             26,800

Question: The total direct labor hours required in preparing a direct labor budget are calculated using the
A             Sales forecast
B             Production budget
C             Direct materials budget
D             Sales budget

Question: Flint Company estimates its sales at 120,000 units in the first quarter and that sales will increase by 12,000 units each quarter over the year. They have, and desire, a 25% ending inventory of finished goods. Each unit sells for \$25. 40% of the sales are for cash. 70% of the credit customers pay within the quarter. The remainder is received in the quarter following sale.
Cash collections for the third quarter are budgeted at
A             \$2,034,000
B             \$2,952,000
C             \$3,546,000
D             \$4,104,000

Question: A budget
A             Is a substitute for management
B             Is an aid to management
C             Can operate or enforce itself
D             Is the responsibility of the accounting department

Question: The financial budgets include the
A             Cash budget and the selling and administrative expense budget
B             Cash budget and the budgeted balance sheet
C             Budgeted balance sheet and the budgeted income statement
D             Cash budget and the production budget

Question: A budget period should be
A             Monthly
B             For a year or more
C             Long term
D             Long enough to provide an obtainable goal under normal business conditions

Question: A common starting point in the budgeting process is
A             Expected future net income
B             Past performance
C             To motivate the sales
force

D             A clean slate, with no expectations

10
Question: The direct materials budget shows:
Units to be produced     3,000
Total pounds needed for production      12,000
Total materials required                13,200
What are the direct materials per unit?
A             .44 pounds
B             4.0 pounds
C             4.4 pounds
D             Cannot be determined from the data provided

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Multiple Choice

Question 1

Walk Manufacturing gathered the following data about the three products that it produces:
Product Present Sales Value Estimated Additional
Processing Costs Estimated Sales
if Processed Further
A \$24,000 \$16,000 \$42,000
B \$28,000 \$10,000 \$36,000
C \$22,000 \$6,000 \$32,000
Which of the products should not be processed further?
Product A
Product B
Product C
Products A and C

Question 2

Cara Industries incurred the following costs for 50,000 units:
Variable Costs \$90,000
Fixed Costs \$120,000
Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional \$4,250 for shipping.
If Cara wants to earn \$4,000 on the order, what should the unit price be?
\$1.65
\$5.85
\$2.60
\$3.45

Question 3

Opportunity cost is usually
a standard cost.
a potential benefit.
a sunk cost.
included as part of cost of goods sold.

Question 4

It costs Ross Co. \$24 of variable and \$10 of fixed costs to produce one bathroom scale which normally sells for \$70. A foreign wholesaler offers to purchase 2,000 scales at \$30 each. Ross would incur special shipping costs of \$2 per scale if the order were accepted. Ross has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?
\$8,000 increase
\$8,000 decrease
\$12,000 decrease
\$60,000 increase

Question 5

Brave Industries is considering buying a machine for \$180,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of \$12,000 each year. The cash payback on this investment is
15 years.
10 years.
6 years.
3 years.

Question 6

If a company has limited resources, the key factor in performing incremental analysis is
contribution margin.
limited resources required.
contribution margin per unit of limited resource.
none of these.

Question 7

Roger Industries is considering two capital investment proposals. Estimates regarding each project are provided below:
Project XR8 Project AAA
Initial Investment \$800,000 \$1,200,000
Annual Net Income \$40,000 \$84,000
Net Annual Cash Inflow \$200,000 \$284,000
Estimated Useful Life 5 years 6 years
Salvage Value 0 0

The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111

The annual rate of return for Project XR8 is
5%.
10%.
25%.
50%.

Question 8

In incremental analysis,
costs are not relevant if they change between alternatives.
all costs are relevant if they change between alternatives.
only fixed costs are relevant.
only variable costs are relevant.

Question 9

Begley, Inc. is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine New Machine
Price \$250,000 \$500,000
Accumulated Depreciation \$75,000 -0-
Remaining Useful Life 10 years -0-
Useful Life -0- 10 years
Annual Operating Costs \$200,000 \$150,000

If the old machine is replaced, it can be sold for \$20,000.
\$15,000
\$20,000
\$(5,000)
\$(50,000)

Question 10

Debra Manufacturing has identified that the cost of a new computer will be \$120,000, but with the use of the new computer, net income will increase by \$10,000 a year. If depreciation expense is \$6,000 a year, the cash payback period is:
30 years.
20 years.
12 years.
7.5 years.

Question 11

A company is considering purchasing factory equipment that costs \$640,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be \$180,000 and annual operating expenses exclusive of depreciation expense are expected to be \$76,000. The straight-line method of depreciation would be used.
The cash payback period on the equipment is
13.3 years.
8.0 years.
6.2 years.
3.1 years.

Question 12

The rate of return that management expects to pay on all borrowed and equity funds is the
cost of capital.
cutoff rate.
hurdle rate.
minimum rate.

Question 13

In a make-or-buy decision, opportunity costs are
added to the make total cost.
deducted from the make total cost.
ignored.

Question 14

Cost behavior analysis is a study of how a firm’s costs
relate to competitors’ costs.
relate to general price level changes.
respond to changes in the

respond to changes in the gross national product.

Question 15

CVP analysis does not consider
level of activity.
fixed cost per unit.
variable cost per unit.
sales mix.

Question 16

Pascal, Inc. is planning to sell 600,000 units for \$1.50 per unit. The contribution margin ratio is 20%. If Pascal will break even at this level of sales, what are the fixed costs?
\$180,000.
\$420,000.
\$600,000.
\$720,000.

Question 17

Greg’s Golf Carts produces two models: Model 24 has sales of 500 units with a contribution margin of \$40 each; Model 26 has sales of 350 units with a contribution margin of \$50 each. If sales of Model 26 increase by 200 units, how much will profit change?

\$10,000 increase
\$17,500 increase
\$27,500 increase
\$28,000 increase

Question 18

A company sells a product which has a unit sales price of \$5, unit variable cost of \$3 and total fixed costs of \$150,000. The number of units the company must sell to break even is
75,000 units.
30,000 units.
300,000 units.
50,000 units.

Question 19

Fixed costs are \$900,000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars?
\$2,100,000
\$2,700,000
\$3,600,000
\$1,200,000

Question 20

Variable costs for Abbey, Inc. are 25% of sales. Its selling price is \$60 per unit. If Abbey sells one unit more than break-even units, how much will profit increase?
\$45
\$15
\$20
\$240

Question 21

Cost activity indexes might help classify costs as
temporary.
permanent.
variable.
transient.

Question 22

Which one of the following is a name for the range over which a company expects to operate?
Mixed range
Fixed range
Variable range
Relevant range

Question 23

The break-even point cannot be determined by
computing it from a mathematical equation.
computing it using contribution margin.
reading the prior year’s financial statements.
deriving it from a CVP graph.

Question 24

In applying the high-low method, what is the unit variable cost?
Month Miles Total Cost
January 80,000 \$96,000
February 50,000 \$80,000
March 70,000 \$94,000
April 90,000 \$140,000

\$1.44
\$1.50
\$1.60
Cannot be determined from the information given.

Question 25

A CVP graph does not include a
variable cost line.
fixed cost line.
sales line.
total cost line.

Question 26

If a company had a contribution margin of \$300,000 and a contribution margin ratio of 40%, total variable costs must have been
\$450,000.
\$180,000.
\$750,000.
\$120,000.

Question 27

Which of the following is not a management function?
Constraining
Planning
Controlling
Directing

Question 28

Managerial accounting is applicable to
service entities.
manufacturing entities.
not-for-profit entities.
all of these.

Question 29

Which one of the following costs would not be inventoriable?
Period costs
Factory insurance costs
Indirect materials
Indirect labor costs

Question 30

Assuming the cost of direct materials used is \$1,300,000, compute the total manufacturing costs using the information below.
Raw materials inventory, January 1 \$30,000
Raw materials inventory, December 31 \$60,000
Work in process, January 1 \$27,000
Work in process, December 31 \$18,000
Finished goods, January 1 \$60,000
Finished goods, December 31 \$48,000
Raw materials purchases \$1,300,000
Direct labor \$690,000
Factory utilities \$225,000
Indirect labor \$75,000
Factory depreciation \$500,000
Operating expenses \$630,000

\$2,790,000.
\$2,781,000.
\$2,490,000.
\$3,420,000.

Question 31

In an analogous sense, external user is to internal user as generally accepted accounting principles are to
timely.
special-purpose.
relevance to decision.
SEC.

Question 32

Cost of goods sold
only appears on merchandising companies’ income statements.
only appears on manufacturing companies’ income statements.
appears on both manufacturing and merchandising companies’ income statements.
is calculated exactly the same for merchandising and manufacturing companies.

Question 33

Which of the following are period costs?
Raw materials
Direct materials and direct labor
Selling expenses

Question 34

The subtotal, “Cost of goods manufactured” appears on
a merchandising company’s income statement.
a manufacturing company’s income statement.
both a manufacturing and a merchandising company’s income statement.
neither a merchandising nor a manufacturing company’s income statement.

Question 35

The wages of a timekeeper in the factory would be classified as
a period cost.
direct labor.
indirect labor.
compliance costs.

Question 36

Assuming that the cost of goods manufactured is \$2,760,000 compute the cost of goods sold using the following information.
Raw materials inventory, January 1 \$30,000
Raw materials inventory, December 31 \$60,000
Work in process, January 1 \$27,000
Work in process, December 31 \$18,000
Finished goods, January 1 \$
60,000

Finished goods, December 31 \$48,000
Raw materials purchases \$1,300,000
Direct labor \$690,000
Factory utilities \$225,000
Indirect labor \$75,000
Factory depreciation \$500,000
Operating expenses \$630,000

\$2,769,000.
\$2,712,000.
\$2,748,000.
\$2,772,000.

Question 37

The function that pertains to keeping the activities of the enterprise on track is
planning.
directing.
controlling.
accounting.

Question 38

Which of the following statements about internal reports is not true?
The content of internal reports may extend beyond the double-entry accounting system.
Internal reports may show all amounts at market values.
Internal reports may discuss prospective events.
Most internal reports are summarized rather than detailed.

Question 39

Which of the following is not another name for the term manufacturing overhead?
Pervasive costs
Burden
Indirect manufacturing costs

Question 40

Which cost is not charged to the product under variable costing?
Direct materials
Direct labor

Question 41

Hinge Manufacturing’s cost of goods sold is \$420,000 variable and \$240,000 fixed. The company’s selling and administrative expenses are \$300,000 variable and \$360,000 fixed. If the company’s sales is \$1,680,000, what is its net income?
\$360,000
\$960,000
\$1,020,000
\$1,080,000

Question 42

In 2012, Teller Company sold 3,000 units at \$300 each. Variable expenses were \$210 per unit, and fixed expenses were \$120,000. What was Teller’s 2012 net income?
\$150,000
\$270,000
\$630,000
\$900,000

Question 43

Companies that use just-in-time processing techniques will
have greater differences between absorption and variable costing net income.
have smaller differences between absorption and variable costing net income.
not be able to use absorption costing.
not be able to use variable costing.

Question 44

Capitol Manufacturing sells 2,000 units of Product A annually, and 3,000 units of Product B annually. The sales mix for Product A is
40%.
60%.
67%.
cannot determine from information given.

Question 45

For Buffalo Co., at a sales level of 5,000 units, sales is \$75,000, variable expenses total \$40,000, and fixed expenses are \$21,000. What is the contribution margin per unit?
\$2.80
\$7.00
\$8.00
\$15.00

Question 46

Sprinkle Co. sells its product for \$60 per unit. During 2012, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: directmaterials \$15, direct labor \$9, and variable overhead \$3. Fixed costs are: \$720,000 manufacturing overhead, and \$90,000 selling and administrative expenses. Under absorption costing, what amount of fixed overhead is deferred to a future period?
\$30,000
\$120,000
\$150,000
\$720,000

Question 47

For Pierce Company, sales is \$500,000, variable expenses are \$310,000, and fixed expenses are \$140,000. Pierce’s contribution margin ratio is
10%.
28%.
38%.
62%.

Question 48

Variable costing
is used for external reporting purposes.
is required under GAAP.
treats fixed manufacturing overhead as a period cost.
is also known as full costing.

Question 49

What is the key factor in determining sales mix if a company has limited resources?
Contribution margin per unit of limited resource
The amount of fixed costs per unit
Total contribution margin
The cost of limited resources

Question 50

For Franklin, Inc., sales is \$2,000,000, fixed expenses are \$600,000, and the contribution margin ratio is 36%. What is net income?
\$120,000
\$216,000
\$504,000
\$720,000

Question 51

Which cost is charged to the product under variable costing?

Question 52

Ramirez Corporation sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of \$36 and a selling price of \$60. Q-Chip Plus has variable costs per unit of \$42 and a selling price of \$78. Ramirez’s fixed costs are \$540,000. How many units of Q-Chip would be sold at the break-even point?
5,063
5,869
9,000
11,813

# Mixed113

Cash flow

1.Murdock Paints is in the process of evaluating two mutually exclusive additions to its processing capacity. The firms financial analysts have developed pessimistic, most likely, and optimistic estimates of the annual cash inflows associated with each project. These estimates are shown in the following table. Project A Project B Initial investment (CF0) \$8,000 \$8,000 Outcome Annual cash inflows (CF) Pessimistic \$ 200 \$ 900 Most likely 1,000 1,000 Optimistic 1,800 1,100 a.Determine the range of annual cash inflows for each of the two projects. b.Assume that the firm s cost of capital is 10% and that both projects have 20-year lives. Construct a table similar to this for the NPVs for each project. Include the range of NPVs for each project. c.Do parts a and b provide consistent views of the two projects? Explain. d.Which project do you recommend? Why?
a.Determine the range of annual cash inflows for each of the two projects.
b.Assume that the firm s cost of capital is 10% and that both projects have 20-year lives. Construct a table similar to this for the
NPVs for each project. Include the range of NPVs for each project
c.Do parts a and b provide consistent views of the two projects? Explain.
d.Which project do you recommend? Why?

****************************************************************

Management functions

1) Planning involves which of the following?
A. Analyzing current situations
B. Determining rewards for goals achievement
C. Motivating employees
D. Implementing necessary changes

2) _______ is specifying the goals to be achieved and deciding in advance the appropriate actions needed to achieve those goals.
A. Staffing
C. Organizing
D. Planning
3) Advances in genetic engineering and biotechnology are expected to produce some food products that will become available year-round even in northern climates. These changes will provide grocers with an opportunity to reduce their shipping costs while at the same time, offering fresher produce to their customers. These advances are an example of changes in the
A. technological environment
B. economic environment
C. political environment
D. ecological environment

4) _________ trends regarding how people think and behave have major implications for management of the labor force, corporate social actions, and strategic decisions about products and markets.
A. Psychological
B. Economic
C. Technological
D. Societal

5) Which of the following is a step in the decision-making process?
A. Generating an idea
C. Evaluating the decision

6) Which is a step in the decision-making process?
A. Resolving and reducing conflict
B. Making the choice
C. Using the lack of structure

7) The targets or ends the manager wants to reach are called
A. goals
B. missions
C. visions
D. strategies
8) In the _______________ stage of the planning process, managers should weigh the advantages, disadvantages, and potential effects of each alternative goal and plan.
A. goal and plan evaluation
B. goal and plan selection
C. implementation
D. alternate goals and plans

9) Tactical planning would include which of the following?
A. Profit goals
B. Design, test, and install the equipment needed to produce a new product line
C. Human resources requirements
D. Return on investment

10) The internal analysis component of the strategic management process assesses the organizations
A. performance levels
B. competitors
C. industry growth rate
D. product substitutions in the market

11) Suppose you face a question regarding how to handle a defective piece of equipment that your company sold. To tell the customer would cost you a substantial amount of money, but if the equipment fails, it could lead to serious injury of the customer. You decide to disclose the defect and suggest alternatives to eliminate the risk of injury. This decision employs which ethical approach?

A. Universalism
B. Egoism
C. Relativism
D. Virtue ethics

12) Your organization faces an ethical question. There has been a problem with your accounting process that has resulted in lower profits being reported than were actually earned. You are attending a meeting where senior management is deciding how to handle the situation. The people at the table have varying views of what action to take and why. John wants to report the error immediately because he believes that it is the right thing to do and that will keep them all out of jail. Bruce wants to report the error because it is the honest thing to do. After hearing his colleagues’ opinions, Carlos says he wants to report the error as well because he believes the group is right. Carlos is using which ethical system for his decision making?
A. Universalism
B. Relativism
C. Utilitarianism
D. Virtue ethics

13) In the study by Lawrence and Lorsch, companies in complex, dynamic environments developed _____ levels of differentiation; and _____ levels of integration.
A. low; low
B. high; high
C. low; high
D. high; low

14) An aspect of the organizations internal environment created by job specialization and the division of labor is called
A. differentiation
B. integration
C. division of labor
D. specialization

15) An organization with departmentalization that groups units around products, customers, or geographic regions is called a
A. divisional organization
B. centralized organization
C. matrix organization
D. functional organization

16) Which of the following statements about matrix organizations is true?
A. A matrix organization is the same as a functional organization.
B. A matrix organization is the same as a product organization.
C. A matrix organization is a hybrid of the functional and divisional organizational forms.
D. A matrix organization is considered out-of-date compared to the organic organization.

17) An organization with departmentalization that groups units around products, customers, or geographic regions is called a
A. centralized organization
B. matrix organization
C. virtual organization
D. divisional organization

18) Sports International (SI) began business by mak
ing shoes for athletes. They soon expanded into making shoes for non-athletic purposes. They now manufacture and distribute clothing, sporting equipment, and protective sports gear worldwide. They are departmentalized by products sold to serious athletes, products sold to “weekend” athletes and products sold to sports teams. SI has utilized which form of departmentalization?

A. Geographic
B. Customer
C. Functional
D. Matrix

A. can motivate others to work hard
B. can motivate others to become leaders
C. can motivate others to join

20) A leadership perspective that attempts to identify what effective leaders do and the behaviors they exhibit is referred to as the
A. behavioral approach
B. trait approach
D. strategic approach

21) __________ leadership invites colleagues at the same level to solve problems together.
A. Horizontal
B. Collegial
C. Lateral
D. Linear

22) Leaders who relate to others to serve their needs and enhance their personal growth while strengthening the organization are known as

23) The basic goal of managing diversity is to:
A. treat all people the same.
B. increase the numbers of minorities in business.
C. enhance organizational cohesiveness.
D. understand and value employee differences.

24) Future trends in the labor force include a
A. smaller labor force
B. more experienced labor force
C. more homogenous labor force
D. younger labor force

25) Behavior that gives purpose and meaning to organizations, while envisioning and creating a positive future, is known as

26) The correspondence between actions and words that include characteristics such as honesty and credibility is known as
A. drive
B. self-confidence
D. integrity

27) Owners from two businesses have asked you which type of control system they should utilize. To help you make your decision, they have each provided a brief description of their organization, is a large corporation built in the 1950s. They produce chemical concentrates for industrial cleaning. Their organization uses a strict set of rules and regulations with their workforce. They have the ability to track a large amount of data using statistical techniques. Mid-Atlantic Health is a regional medical center. They want to use a control system that will allow them to tie pricing of services and profits to specific services in the medical center. The control systems that should be used in the scenarios above were developed by
A. William Ouchi
B. Xerox
C. Frederick Taylor
D. Motorola
28) Your manager is speaking to a group of employees about a problem in your department. Employees are not complying with the rules regarding clocking in and clocking out each day. The rules in this situation are very important as employees will not receive their correct pay if the clocking procedures are not followed. There are three suggestions being considered to address this problem.

1.      Employees will be monitored at the entrance during shift changes to make sure that each complies with the procedure.

2.      Reports will be reviewed at the end of each pay period. The reports will contain data tracking the number of employees not complying with the procedures each shift. Employees violating the procedure will be counseled to correct the problem.

3.      A new procedure will be developed describing an easier procedure for employees to follow. Training will be conducted so that each employee knows the policy and the procedure before it is enacted.Option 1 describes which approach to bureaucratic control?

A. Feedback
B. Concurrent
C. Feedforward
D. Market

29) Suppose you are interviewing the CEO of a large company. The CEO is telling you about his or her job as a manager and how he or she spends time. Using the description below, which function of management is the CEO most likely describing in this example?
“My job, for some part of each day, is to empower our employees to think of things in new and different ways, not just to come to work and complete the tasks on a list.
A. Organizing
C. Controlling
D. Decision making

30) Suppose you are interviewing the CEO of a large company. The CEO is telling you about his or her job as a manager and how he or she spends time. Using the description below, which function of management is the CEO most likely describing in this example?
“Every six months or so, my senior management team and I meet to discuss the goals that will be achieved over the next year, three years, and beyond. We then make sure we are clear on who will take responsibility to see that the appropriate actions are undertaken to achieve our goals within the time frame we set.”
A. Planning
B. Organizing
D. Decision making

****************************************************************

Multiple Choice

Question 1
Walk Manufacturing gathered the following data about the three products that it produces:
Product Present Sales Value Estimated Additional
Processing Costs Estimated Sales
if Processed Further
A \$24,000 \$16,000 \$42,000
B \$28,000 \$10,000 \$36,000
C \$22,000 \$6,000 \$32,000

Which of the products should not be processed further?
Product A
Product B
Product C
Products A and C

Question 2
Cara Industries incurred the following costs for 50,000 units:
Variable Costs \$90,000
Fixed Costs \$120,000
Cara has received a special order from a foreign company for 5,000 units. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional \$4,250 for shipping.
If Cara wants to earn \$4,000 on the order, what should the unit price be?
\$65
\$5.85
\$2.60
\$3.45

Question 3
Opportunity cost is usually

a standard cost.
a potential benefit.
a sunk cost.
included as part of cost of goods sold.

Question 4
It c
osts Ross Co. \$24 of variable and \$10 of fixed costs to produce one bathroom scale which normally sells for \$70. A foreign wholesaler offers to purchase 2,000 scales at \$30 each. Ross would incur special shipping costs of \$2 per scale if the order were accepted. Ross has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?

\$8,000 increase
\$8,000 decrease
\$12,000 decrease
\$60,000 increase

Question 5
Brave Industries is considering buying a machine for \$180,000 with an estimated life of ten years and no salvage value. The straight-line method of depreciation will be used. The machine is expected to generate net income of \$12,000 each year. The cash payback on this investment is
15 years.
10 years.
6 years.
3 years.

Question 6
If a company has limited resources, the key factor in performing incremental analysis is
contribution margin.
limited resources required.
contribution margin per unit of limited resource.
none of these.

Question 7
Roger Industries is considering two capital investment proposals. Estimates regarding each project are provided below:

Project XR8 Project AAA
Initial Investment \$800,000 \$1,200,000
Annual Net Income \$40,000 \$84,000
Net Annual Cash Inflow \$200,000 \$284,000
Estimated Useful Life 5 years 6 years
Salvage Value 0 0
The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111

The annual rate of return for Project XR8 is
5%.
10%.
25%.
50%.

Question 8
In incremental analysis,
costs are not relevant if they change between alternatives.
all costs are relevant if they change between alternatives.
only fixed costs are relevant.
only variable costs are relevant.

Question 9
Begley, Inc. is contemplating the replacement of an old machine with a new one. The following information has been gathered:
Old Machine New Machine
Price \$250,000 \$500,000
Accumulated Depreciation \$75,000 -0-
Remaining Useful Life 10 years -0-
Useful Life -0- 10 years
Annual Operating Costs \$200,000 \$150,000
If the old machine is replaced, it can be sold for \$20,000.
\$15,000
\$20,000
\$(5,000)
\$(50,000)

Question 10
Debra Manufacturing has identified that the cost of a new computer will be \$120,000, but with the use of the new computer, net income will increase by \$10,000 a year. If depreciation expense is \$6,000 a year, the cash payback period is:
30 years.
20 years.
12 years.
7.5 years.

Question 11
A company is considering purchasing factory equipment that costs \$640,000 and is estimated to have no salvage value at the end of its 8-year useful life. If the equipment is purchased, annual revenues are expected to be \$180,000 and annual operating expenses exclusive of depreciation expense are expected to be \$76,000. The straight-line method of depreciation would be used.
The cash payback period on the equipment is
13.3 years.
8.0 years.
6.2 years.
3.1 years.

Question 12
The rate of return that management expects to pay on all borrowed and equity funds is the
cost of capital.
cutoff rate.
hurdle rate.
minimum rate.

Question 13
In a make-or-buy decision, opportunity costs are
added to the make total cost.
deducted from the make total cost.
ignored.

Question 14
Cost behavior analysis is a study of how a firm’s costs
relate to competitors’ costs.
relate to general price level changes.
respond to changes in the level of business activity.
respond to changes in the gross national product.

Question 15
CVP analysis does not consider
level of activity.
fixed cost per unit.
variable cost per unit.
sales mix.

Question 16
Pascal, Inc. is planning to sell 600,000 units for \$50 per unit. The contribution margin ratio is 20%. If Pascal will break even at this level of sales, what are the fixed costs?
\$180,000.
\$420,000.
\$600,000.
\$720,000.

Question 17
Greg’s Golf Carts produces two models: Model 24 has sales of 500 units with a contribution margin of \$40 each; Model 26 has sales of 350 units with a contribution margin of \$50 each. If sales of Model 26 increase by 200 units, how much will profit change?

\$10,000 increase
\$17,500 increase
\$27,500 increase
\$28,000 increase

Question 18
A company sells a product which has a unit sales price of \$5, unit variable cost of \$3 and total fixed costs of \$150,000. The number of units the company must sell to break even is
75,000 units.
30,000 units.
300,000 units.
50,000 units.

Question 19
Fixed costs are \$900,000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars?
\$2,100,000
\$2,700,000
\$3,600,000
\$1,200,000

Question 20

Variable costs for Abbey, Inc. are 25% of sales. Its selling price is \$60 per unit. If Abbey sells one unit more than break-even units, how much will profit increase?
\$45
\$15
\$20
\$240

Question 21
Cost activity indexes might help classify costs as
temporary.
permanent.
variable.
transient.

Question 22
Which one of the following is a name for the range over which a company expects to operate?
Mixed range
Fixed range
Variable range
Relevant range

Question 23
The break-even point cannot be deter
mined by

computing it from a mathematical equation.
computing it using contribution margin.
reading the prior year’s financial statements.
deriving it from a CVP graph.

Question 24
In applying the high-low method, what is the unit variable cost?
Month Miles Total Cost
January 80,000 \$96,000
February 50,000 \$80,000
March 70,000 \$94,000
April 90,000 \$140,000
\$44
\$50
\$60
Cannot be determined from the information given.

Question 25
A CVP graph does not include a
variable cost line.
fixed cost line.
sales line.
total cost line.

Question 26
If a company had a contribution margin of \$300,000 and a contribution margin ratio of 40%, total variable costs must have been
\$450,000.
\$180,000.
\$750,000.
\$120,000.

Question 27
Which of the following is not a management function?
Constraining
Planning
Controlling
Directing

Question 28
Managerial accounting is applicable to
service entities.
manufacturing entities.
not-for-profit entities.
all of these.

Question 29
Which one of the following costs would not be inventoriable?
Period costs
Factory insurance costs
Indirect materials
Indirect labor costs

Question 30
Assuming the cost of direct materials used is \$1,300,000, compute the total manufacturing costs using the information below.
Raw materials inventory, January 1 \$30,000
Raw materials inventory, December 31 \$60,000
Work in process, January 1 \$27,000
Work in process, December 31 \$18,000
Finished goods, January 1 \$60,000
Finished goods, December 31 \$48,000
Raw materials purchases \$1,300,000
Direct labor \$690,000
Factory utilities \$225,000
Indirect labor \$75,000
Factory depreciation \$500,000
Operating expenses \$630,000
\$2,790,000.
\$2,781,000.
\$2,490,000.
\$3,420,000.

Question 31
In an analogous sense, external user is to internal user as generally accepted accounting principles are to
timely.
special-purpose.
relevance to decision.
SEC.

Question 32
Cost of goods sold
only appears on merchandising companies’ income statements.
only appears on manufacturing companies’ income statements.
appears on both manufacturing and merchandising companies’ income statements.
is calculated exactly the same for merchandising and manufacturing companies.

Question 33
Which of the following are period costs?
Raw materials
Direct materials and direct labor
Selling expenses

Question 34
The subtotal, “Cost of goods manufactured” appears on
a merchandising company’s income statement.
a manufacturing company’s income statement.
both a manufacturing and a merchandising company’s income statement.
neither a merchandising nor a manufacturing company’s income statement.

Question 35
The wages of a timekeeper in the factory would be classified as
a period cost.
direct labor.
indirect labor.
compliance costs.

Question 36
Assuming that the cost of goods manufactured is \$2,760,000 compute the cost of goods sold using the following information.
Raw materials inventory, January 1 \$30,000
Raw materials inventory, December 31 \$60,000
Work in process, January 1 \$27,000
Work in process, December 31 \$18,000
Finished goods, January 1 \$60,000
Finished goods, December 31 \$48,000
Raw materials purchases \$1,300,000
Direct labor \$690,000
Factory utilities \$225,000
Indirect labor \$75,000
Factory depreciation \$500,000
Operating expenses \$630,000
\$2,769,000.
\$2,712,000.
\$2,748,000.
\$2,772,000.

Question 37
The function that pertains to keeping the activities of the enterprise on track is
planning.
directing.
controlling.
accounting.

Question 38
Which of the following statements about internal reports is not true?
The content of internal reports may extend beyond the double-entry accounting system.
Internal reports may show all amounts at market values.
Internal reports may discuss prospective events.
Most internal reports are summarized rather than detailed.

Question 39
Which of the following is not another name for the term manufacturing overhead?
Pervasive costs
Burden
Indirect manufacturing costs

Question 40
Which cost is not charged to the product under variable costing?
Direct materials
Direct labor

Question 41
Hinge Manufacturing’s cost of goods sold is \$420,000 variable and \$240,000 fixed. The company’s selling and administrative expenses are \$300,000 variable and \$360,000 fixed. If the company’s sales is \$1,680,000, what is its net income?
\$360,000
\$960,000
\$1,020,000
\$1,080,000

Question 42
In 2012, Teller Company sold 3,000 units at \$300 each. Variable expenses were \$210 per unit, and fixed expenses were \$120,000. What was Teller’s 2012 net income?
\$150,000
\$270,000
\$630,000
\$900,000

Question 43
Companies that use just-in-time processing techniques will
have greater differences between absorption and variable costing net income.
have smaller differences between absorption and variable costing net income.
not be able to use absorption costing. n>
not be able to use variable costing.

Question 44
Capitol Manufacturing sells 2,000 units of Product A annually, and 3,000 units of Product B annually. The sales mix for Product A is
40%.
60%.
67%.
cannot determine from information given.

Question 45
For Buffalo Co., at a sales level of 5,000 units, sales is \$75,000, variable expenses total \$40,000, and fixed expenses are \$21,000. What is the contribution margin per unit?
\$2.80
\$7.00
\$8.00
\$15.00

Question 46
Sprinkle Co. sells its product for \$60 per unit. During 2012, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: directmaterials \$15, direct labor \$9, and variable overhead \$3. Fixed costs are: \$720,000 manufacturing overhead, and \$90,000 selling and administrative expenses. Under absorption costing, what amount of fixed overhead is deferred to a future period?
\$30,000
\$120,000
\$150,000
\$720,000

Question 47
For Pierce Company, sales is \$500,000, variable expenses are \$310,000, and fixed expenses are \$140,000. Pierce’s contribution margin ratio is
10%.
28%.
38%.
62%.

Question 48
Variable costing
is used for external reporting purposes.
is required under GAAP.
treats fixed manufacturing overhead as a period cost.
is also known as full costing.

Question 49
What is the key factor in determining sales mix if a company has limited resources?
Contribution margin per unit of limited resource
The amount of fixed costs per unit
Total contribution margin
The cost of limited resources

Question 50
For Franklin, Inc., sales is \$2,000,000, fixed expenses are \$600,000, and the contribution margin ratio is 36%. What is net income?
\$120,000
\$216,000
\$504,000
\$720,000

Question 51

Which cost is charged to the product under variable costing?

Question 52
Ramirez Corporation sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of \$36 and a selling price of \$60. Q-Chip Plus has variable costs per unit of \$42 and a selling price of \$78. Ramirez’s fixed costs are \$540,000. How many units of Q-Chip would be sold at the break-even point?
5,063
5,869
9,000
11,813

****************************************************************

Marketing research

Marketing research
1.A marketing firm launched a major advertising campaign to position their brand as superior to its competitors. After the campaign had run for six months, the marketing team wanted to use marketing research to determine if they had achieved their objective. Which of the functions of marketing research is carried out by the firm?
a.Development of marketing actions
b.Identification of market problems
c.Refinement of marketing actions
d.Evaluation of marketing actions

2.A Marketing manager wants to do a market study before launching a new product. The research study will take three months to complete. Just two weeks before starting the study, she learns that their competitor is about to launch a product that will compete directly against her company’s new product. Given this new development, she decides to cancel the research study and launch the product immediately. The reason for NOT conducting the study is:
a.the problem can be resolved using existing information.
b.the problem is not of strategic or tactical importance.
c.adequate information is available in the company’s internal records to resolve the problem.
d.time constraints associated with the problem make it impossible to conduct the study.

3.Nancy was told by her research manager that people preferred red colored toasters over blue colored ones. When Nancy asked for the ratio of red vs. blue preference subjects, she was told that the inference could not be drawn from the data collected. This problem is an illustration of:
a.budget limitation.
c.data generalizability.
d.data precision.

4.External validity:
a.exists when the research design accurately identifies causal relationships.
b.refers to the extent to which a causal relationship found in a study can be expected to be true for the entire defined target population.
c.can be threatened by selection bias.
d.refers to the degree that the design and its procedures can be replicated and achieves similar conclusions about hypothesized relationships.

5.Which of the following statements is true regarding interval scales?
a.They can measure absolute differences between scale points.
b.The standard deviation cannot be calculated for interval scales.
c.They are the highest level scale.
d.They do not allow for comparison between measured objects.

6.Which of the following measures of dispersion is/are appropriate for all the different types of scales (nominal, ordinal, etc.)?
a.Frequency distribution
b.Range
c.Standard deviation
d.Mean

7.In peer review, one seeks input from:
a.people from whom the data is collected.
b.methodology and topic area (external) reviewers.
c.policy makers who will use the study’s findings to make decisions.
d.managers who commission the study.

8.Jane is waiting for a research report to prepare for her 3:00 PM meeting. Instead of receiving the report that morning at 10:00 AM, she gets it 15 minutes before the start of the meeting. Given this short time, Jane can afford to read only one section of the report. Which of the following sections should she read to benefit the most from the report?
a.Introduction
c.Executive summary
d.Data analysis and findings

9.A researcher wants to include some technical information about the research technique that she employed for doing the data analysis. This information is complex and fairly detailed. The best place to include this information in a report is the section on:
a.limitations.
b.appendix.
c.data analysis and findings.
dresearch methods and proce
dures.

eInternet Marketing

10.Data, such as digital coupons or customer complaints, exchanged between companies and consumers typically travel via __________, while off-line electronic data collection, such as bar code scanners or databases, shared internally within an organization, travel via __________.
a.internet; intranet
b.extranet; internet
c.extranet; intranet
d.the Web; the social network

11.With the explosive growth and diffusion of __________ the face of e-marketing has changed quite dramatically throughout the world.
a.electricity sources
b.mobile/cellular phones
c.language translators
d.internet cafes

12.The B2B market is different from the B2C market due to its CRM focus on __________ and follow-up for
a.salespeople.
b.communication tools
d.market analysis
e.territory management

13.Which of the following is one of the four perspectives of the Balanced Scorecard?
a.Supply chain
b.Stakeholder
c.Learning and growth
d.Value

14.The strategy of bringing buyers and sellers together for a fee is referred to as:
a.online bidding.
b.dynamic pricing.
c.direct marketing.

****************************************************************

Inventory

1. Cyber Security Systems had sales of 3,000 units at \$50 per unit last year. The marketing manager projects a 20 percent increase in units volume sales this year with a 10 percent price increase. Returned merchandise will represent 6 percent of total sales. What is your net dollar sales projection for this year?

2. Delsing Plumbing Company has beginning inventory of 14,000 units, will sell 50,000 units for the month, and desires to reduce ending inventory to 40 percent of beginning inventory. How many units should Delsing produce?

3. At the end of January, Higgins Data Systems had an inventory of 600 units, which cost \$16 per unit to produce. During February the company produced 850 units at a cost of \$19 per unit. If the firm sold 1,100 in February, what was its cost of goods sold (assume LIFO inventory accounting)?

4.. Victorias Apparel has forecast credits sales for the fourth quarter of the year as:
OR Victorias Apparel has forecast credits sales for the fourth quarter of the year as:
September (actual)  \$50,000
Fourth Quarter
October . \$40,000
November  \$35,000
December ..\$60,000
Experience has shown that 20 percent of sales receipts are collected in the month of sale, 70 percent in the following month, and 10 percent are never collected. Prepare a schedule of cash receipts for Victorias Apparel covering the fourth quarter (October through December).

5. The Manning Company has financial statements as shown below, which are representative of the companys historical average. The firm is expecting a 20 percent increase in sales next year, and management is concerned about the companys need for external funds. The increase is sale is expected to be carried out without any expansion of fixed assets, but rather through more efficient asset utilization. In the existing store. Among liabilities, only current liabilities vary directly with sales. Using the percent-of-sales method, determine whether the company has external financing needs, or a surplus of funds.
Income Statement
Sales \$200,000
Expenses 158,000
Earnings before interest and taxes \$42,000
Interest 7,000
Earnings before taxes \$35,000
Taxes \$15,000
Earnings after taxes \$20,000
Dividends \$6,000

Balance Sheet
Assets
Cash \$5,000
Accounts receivable 40,000
Inventory 75,000
Current assets \$120,000
Fixed assets 80,000
Total assets 200,000

Liabilities and Stockholders Equity
Accounts payable 25,000
Accrued wages 1,000
Accrued taxes 2,000
Current liabilities 28,000
Notes payable 7,000
Long-term debt 15,000
Common Stock 120,000
Retained earnings 30,000
Total liabilities and stockholders equity 200,000

****************************************************************

Two Variables

If two variables you are researching are highly correlated, and you suspect that one variable could actually cause the results observed in the other variable, would it be possible for you to design a research study to determine if cause/effect is actually present? If not, why not? If so, how could it be designed?

****************************************************************

Multiple Choice

The company that put the “stealth” in the stealth bomber was

A. Lockheed Martin.
B. Grumman.
C. Northrup.
D. Boeing.

An institution which controls the shape, price, use, and availability of a technology is called a:

B. Dominant Regulator.
C. Monopolistic Maker.
D. distributer.

If a company produces something and is able to dominate the market as a result, that company would be called:

B. a Dominant Client.
C. a Monopolistic Maker.
D. a manufacturer.

When was the tank first used in combat?

A. World War II
B. World War I
C. Korea
D. Vietnam

The name of the first tank was the:

A. Mark I (or M-1).
B. T-72.
C. M-60.               <
/span>
D. Nautilus.

The M1A1 Abrams tank was used with great success in:

A. World War II.
B. Vietnam.
C. The Cold War.
D. The Gulf War.

The next generation of armored vehicles will be called:

A. IEDs.
B. CIDs.
C. IAVs.

The next generation of stealth aircraft is the:

A. X-15.
B. A-10.
C. F-22.
D. B-52.

The project designed to clothe soldiers in order to fight the wars of tomorrow is called:

A. Future Soldier 2025.
B. Situational Awareness.
C. Star Wars.
D. Land Warrior.

__________ was a herbicide used by the United States during the Vietnam War to deprive Viet Cong and North Vietnamese troops of food, shelter, and camoflage.

A. DDT
B. Mustard gas
C. Agent Orange
D. Anthrax

According to the FDA antibiotic resistance occurs because:

A. antibiotics are administered to patients in smaller doses than recommended by healthcare and federal organizations.
B. patients do not finish the entire bottle of medication prescribed to them and the bacterial strain becomes stronger and more resistant to antibiotics.
C. antibiotics are administered for bacterial infections, which do not respond to antibiotics.
D. the drug companies are not making the drugs strong enough due to previous lawsuits.
Question 12 of 20             5.0 Points
Some turkey and chicken products contain __________ which increases the risk of human infection from bacteria that medications on the market will not easily kill. It is the most common bacterial cause of diarrhea illness in the United States.

A. campylobacter
B. monobacter
C. cylobacter
D. bactercilo

The FDA states that about __________ percent of the bacteria that cause infections in hospitals are resistant to at least one of the drugs most commonly used to treat infections.

A. 50%
B. 60%
C. 70%
D. 80%

Bayer was an early proponent of amphetamines and brought the world two blockbuster commercial winners: aspirin and:

A. morphine.
B. heroin.
C. cocaine.
D. diabetic drugs.

In the mid-1970s, pharmaceutical companies saw that the solution to the uncertainty of an ill clientele was to:

A. develop drugs for well people, who not only remain employed but never get “better.”
B. develop stronger drugs for sick people because the market is sympathetic towards sick people.
C. create safer drugs because too many people were suing the pharmaceutical companies.
D. develop weaker drugs so that people would remain ill and continue to take the drugs.

Originally __________ were defined as drugs advertised only to doctors and pharmacists, but not to potential patients.

A. all drugs
B. amphetamines
C. “ethical drugs”
D. barbiturates

Drugs that treat diseases such as Alzheimer’s, depression, schizophrenia, and aging were tested by Cold Spring Harbor Laboratories on:

A. fruit flies.
B. guinia pigs.
C. rabbits.
D. monkies.

The asymptomatic period of HIV may last __________ years or longer in a country like the United States, though the infection can progress to AIDS in as little as __________ years in a country like Zimbabwe or India, where the percentage of people who can get full treatment and care is much smaller.

A. 10; 2 to 3
B. 7; 1 to 2
C. 9; 3 to 4
D. 8; 3 to 5

About __________ of HIV transmission worldwide is through unprotected sex.

A. 56%
B. 64%
C. 75%
D. 33%

The recent upsurge in medical costs, combined with advances in technology, is now making __________ a reality.

A. neural “hardwiring”
B. telemedicine
C. gene therapy
D. genetic testing

The company that put the “stealth” in the stealth bomber was

A. Lockheed Martin.
B. Grumman.
C. Northrup.        >
D. Boeing.

An institution which controls the shape, price, use, and availability of a technology is called a:

B. Dominant Regulator.
C. Monopolistic Maker.
D. distributer.

If a company produces something and is able to dominate the market as a result, that company would be called:

B. a Dominant Client.
C. a Monopolistic Maker.
D. a manufacturer.

When was the tank first used in combat?

A. World War II
B. World War I
C. Korea
D. Vietnam

The name of the first tank was the:

A. Mark I (or M-1).
B. T-72.
C. M-60.
D. Nautilus.

The M1A1 Abrams tank was used with great success in:

A. World War II.
B. Vietnam.
C. The Cold War.
D. The Gulf War.

The next generation of armored vehicles will be called:

A. IEDs.
B. CIDs.
C. IAVs.

The next generation of stealth aircraft is the:

A. X-15.
B. A-10.
C. F-22.
D. B-52.

The project designed to clothe soldiers in order to fight the wars of tomorrow is called:

A. Future Soldier 2025.
B. Situational Awareness.
C. Star Wars.
D. Land Warrior.

__________ was a herbicide used by the United States during the Vietnam War to deprive Viet Cong and North Vietnamese troops of food, shelter, and camoflage.

A. DDT
B. Mustard gas
C. Agent Orange
D. Anthrax

According to the FDA antibiotic resistance occurs because:

A. antibiotics are administered to patients in smaller doses than recommended by healthcare and federal organizations.
B. patients do not finish the entire bottle of medication prescribed to them and the bacterial strain becomes stronger and more resistant to antibiotics.
C. antibiotics are administered for bacterial infections, which do not respond to antibiotics.
D. the drug companies are not making the drugs strong enough due to previous lawsuits.
Question 12 of 20             5.0 Points
Some turkey and chicken products contain __________ which increases the risk of human infection from bacteria that medications on the market will not easily kill. It is the most common bacterial cause of diarrhea illness in the United States.

A. campylobacter
B. monobacter
C. cylobacter
D. bactercilo

The FDA states that about __________ percent of the bacteria that cause infections in hospitals are resistant to at least one of the drugs most commonly used to treat infections.

A. 50%
B. 60%
C. 70%
D. 80%

Bayer was an early proponent of amphetamines and brought the world two blockbuster commercial winners: aspirin and:

A. morphine.
B. heroin.
C. cocaine.
D. diabetic drugs.

In the mid-1970s, pharmaceutical companies saw that the solution to the uncertainty of an ill clientele was to:

A. develop drugs for well people, who not only remain employed but never get “better.”
B. develop stronger drugs for sick people because the market is sympathetic towards sick people.
C. create safer drugs because too many people were suing the pharmaceutical companies.
D. develop weaker drugs so that people would remain ill and continue to take the drugs.

Originally __________ were defined as drugs advertised only to doctors and pharmacists, but not to potential patients.

A. all drugs
B. amphetamines
C. “ethical drugs”
D. barbiturates

Drugs that treat diseases such as Alzheimer’s, depression, schizophrenia, and aging were tested by Cold Spring Harbor Laboratories on:

A. fruit flies.
B. guinia pigs.
C. rabbits.
D. monkies.

The asymptomatic period of HIV may last __________ years or longer in a country like the United States, though the infection can progress to AIDS in as little as __________ years in a coun
try like Zimbabwe or India, where the percentage of people who can get full treatment and care is much smaller.

A. 10; 2 to 3
B. 7; 1 to 2
C. 9; 3 to 4
D. 8; 3 to 5

About __________ of HIV transmission worldwide is through unprotected sex.

A. 56%
B. 64%
C. 75%
D. 33%

The recent upsurge in medical costs, combined with advances in technology, is now making __________ a reality.

A. neural “hardwiring”
B. telemedicine
C. gene therapy
D. genetic testing

# Mixed114

Multiple Choice

According to the textbook, __________ of the world’s population resides in developing countries.
A. 40%
B. 60%
C. 70%
D. 80%

The term __________ was supposed to represent communist countries of Eastern Europe, but the term never caught on.
A. First World
B. Second World
C. Fourth World
D. Soviet Bloc

In 1952, who coined the phrase “Third World”?
A. Albert Einstein
B. Alfred Sauvey
C. Richard Nixon
D. John Kennedy

Which of the following was NOT a demand of the “Charter of Economic Rights and Duties of States,” passed by the U.N. General Assembly in 1974?
A. Transnational corporations must be regulated
B. Economic aid from rich to poor countries should be increased
C. Technology should be transferred from rich to poor
D. Natural resources must remain in developing countries

The term LLCD represents __________ countries.
A. first world
B. second world
C. least developed

To eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, and reduce child mortality are among the self-stated goals of the:
A. WTO.
B. MDG.
C. UNDP.
D. World Bank.

In the article “Income Gap Widens,” Hal Kane suggests that uneven income distribution influences all of the following EXCEPT:
A. migration.
B. crime rates.
C. the growth of cities.
D. birth rates.

The single largest environmental concern in Bangladesh is:
A. clean drinking water.
B. clean air.
C. lack of good soil for crop production.
D. acid rain from nearby countries.

According to your textbook, scientists are discovering that __________ is(are) currently a significant environmental problem especially in the coutries of Bangladesh, India, China, and other Asian countries.
A. laser technologies
B. cyclones
C. underground earthquakes
D. arsenic poisioning

According to your textbook, the reason that China has produced more grain every year than the United States has produced (since 1986) is:
A. China has more people who can grow grain.
B. China wants to be able to feed more people than the U.S. does.
C. China has more irrigated land available for grain production than the U.S. does.
D. the U.S. is more concerned about technology than about growing grain.

__________ is one of the few major indicators for which the ratio of production between the U.S. and China reflects the ratio of population size.
A. Bicycle production
B. Meat consumption
C. Automobile production
D. Fertilizer use

In Pakistan, recycling has been implemented for __________ reasons.
A. environmental
B. health
C. economic
D. aesthetic

Approximately __________ of Pakistan’s demand for glass is met through recycling locally generated glass waste.
A. 30%
B. 50%
C. 80%
D. 90%

In Pakistan about __________ of reusable waste is recycled.
A. 40-50%
B. 50-60%
C. 60-70%
D. 70-80%

According to the textbook, in 2004 in Equador the Internet was accessible to __________ of every 100 people.
A. 4
B. 10
C. 25
D. 40

According to the UNDP statistics (2004) the per capita income of Ecuador was about __________ per year.
A. \$2,500
B. \$3,500
C. \$4,500
D. \$5,500

All of the following are true about distance learning EXCEPT:
A. can help narrow the techno-economic gap between the developed and developing nations.
B. is affordable only in First World countries that have highly advanced technologies.
C. overcomes geographic barriers to allow face-to-face communication between students and teachers.
D. offers a unique approach to promote literacy and enhance higher education in a cost effective way.

On April 6, 1994 the presidents of Rwanda and Burundi died in a plane crash. Both were members of the __________ ethnic group.
A. Masai
B. Tutsi
C. Hutu
D. Mumbasa

All of the following factors led to the 1994 genocide in Rwanda EXCEPT:
A. population growth.
B. deforestation.
C. hunger.
D. natural gas.

Rwanda has been heavily dependent on __________ for energy needs.
A. biomass
B. coal
C. natural gas
D. petroleum

*****************************************************************

Multiple Choice

1) Lever Brothers has a debt ratio (debt to assets) of 40%. Management is wondering if its current capital structure is too conservative. Lever Brothers present EBIT is \$3 million, and profits available to common shareholders are \$1,560,000, with 342,857 shares of common stock outstanding. If the firm were to instead have a debt ratio of 60%, additional interest expense would cause profits available to stockholders to decline to \$1,440,000, but only 228,571 common shares would be outstanding. What is the difference in EPS at a debt ratio of 60% versus 40%?

A. \$1.75
B. \$2.00
2) An example of a primary market transaction is

A. a new issue of common stock by AT&T
B. a sale of some outstanding common stock of AT&T
C. AT&T repurchasing its own stock from a stockholder
D. one stockholder selling shares of common stock to another individual

3) According to the agency problem, _________ represent the principals of a corporation.

A. shareholders
B. managers
C. employees
D. suppliers

4) Which of the following is a principle of basic financial management?

B. Derivatives
C. Stock warrants
D. Profit is king
5) Another name for the acid test ratio is the

A. current ratio
B. quick ratio
C. i
nventory turnover ratio

D. average collection period

6) The accounting rate of return on stockholders investments is measured by

A. return on assets
B. return on equity
C. operating income return on investment
D. realized rate of inflation

7) If you are an investor, which of the following would you prefer?

A. Earnings on funds invested compound annually
B. Earnings on funds invested compound daily
C. Earnings on funds invested would compound monthly
D. Earnings on fund
8) Which of the following is considered to be a deficiency of the IRR?

A. It fails to properly rank capital projects.
B. It could produce more than one rate of return.
C. It fails to utilize the time value of money.
D. It is not useful in accounting for risk in capital budgeting.

9) The firm should accept independent projects if

A. the payback is less than the IRR
B. the profitability index is greater than 1.0
C. the IRR is positive
D. the NPV is greater than the discounted payback

10) The most expensive source of capital is

A. preferred stock
B. new common stock
C. debt
D. retained earnings

11) The cost associated with each additional dollar of financing for investment projects is

A. the incremental return
B. the marginal cost of capital
C. risk-free rate
D. beta

12) The XYZ Company is planning a \$50 million expansion. The expansion is to be financed by selling \$20 million in new debt and \$30 million in new common stock. The before-tax required rate of return on debt is 9%, and the required rate of return on equity is 14%. If the company is in the 40% tax bracket, what is the marginal cost of capital?

A. 14.0%
B. 9.0%
C. 10.6%
D. 11.5%

13) Shawhan Supply plans to maintain its optimal capital structure of 30% debt, 20% preferred stock, and 50% common stock far into the future. The required return on each component is: debt10%; preferred stock11%; and common stock18%. Assuming a 40% marginal tax rate, what after-tax rate of return must Shawhan Supply earn on its investments if the value of the firm is to remain unchanged?

A. 18.0%
B. 13.0%
C. 10.0%
D. 14.2%

14) The present value of a single future sum

A. increases as the number of discount periods increase
B. is generally larger than the future sum
C. depends upon the number of discount periods
D. increases as the discount rate increases

15) Which of the following is considered to be a spontaneous source of financing?

A. Operating leases
B. Accounts receivable
C. Inventory
D. Accounts payable

16) Compute the payback period for a project with the following cash flows, if the companys discount rate is 12%.

Initial outlay = \$450

Cash flows:
Year 1 = \$325
Year 2 = \$65
Year 3 = \$100

A. 3.43 years
B. 3.17 years
C. 2.88 years
D. 2.6 years

17) For the NPV criteria, a project is acceptable if the NPV is __________, while for the profitability index, a project is acceptable if the profitability index is __________.

A. less than zero, greater than the required return
B. greater than zero, greater than one
C. greater than one, greater than zero
D. greater than zero, less than one

18) If you have \$20,000 in an account earning 8% annually, what constant amount could you withdraw each year and have nothing remaining at the end of 5 years?

A. \$3,525.62
B. \$5,008.76
C. \$3,408.88
D. \$2,465.78

19) At what rate must \$400 be compounded annually for it to grow to \$716.40 in 10 years?

A. 6%
B. 5%
C. 7%
D. 8%

*****************************************************************

Multiple Choice

Penn Foster 007684RR

THE AGE OF JEFFERSON TO THE AMERICAN EXPANSION

1. Which of the following statements about the Southern planter’s world is most accurate?
A. Most of the great planters were the sons of wealthy families.
B. The stereotype of the “southern belle” is fairly accurate.
C. The wives and daughter of plantation owners lived lives of leisure.
D. Most great planters of the Old South were self-made men.

2. In what state did the Nat Turner slave revolt of 1831 take place?
A. South Carolina
B. Georgia
C. Alabama
D. Virginia

3. The Second Great Awakening began on the southern frontier and usually featured what two religious sects?
A. Atheists and Buddhists
B. Methodists and Baptists
C. Muslims and Catholics
D. Catholics and Atheists

4. The politicians who met at the Hartford Convention in 1814
A. represented the interests of the cotton-growing states.
B. recommended changes in the Constitution.
C. were mainly concerned with increasing trade with Britain.
D. favored secession from the Union.

5. Within slave society, evidence suggests that the highest social status was ascribed to
A. house slaves.
B. field slaves.
C. preachers and healers.
D. skilled craftsmen who worked on their own in cities.

6. As Texas was defending its claim to be a new and independent republic in 1836, a final crucial victory was won at
A. San Jacinto.
C. Las Cruces.
D. San Antonio.

7. Thomas Jefferson was concerned that the treaty formalizing the Louisiana Purchase
A. was clearly illegal.
B. would place an unfair tax burden on American citizens.
C. would invite French hostility.
D. might be unconstitutional.

8. Which of the following was true of the Judiciary Act of 1801?
A. It expanded the federal court system.
B. It was opposed by the Federalists.
C. It packed the Supreme Court with Democratic Republicans.
D. It reduced the power of the federal courts.

9. John Marshall’s 1803 decision in Marbury v. Madison
A. found in favor of Marbury.
B. was repudiated by Thomas Jefferson.
C. established the principle of judicial review.
D. established the principle of state sovereignty.

10. The West African nation of Liberia was founded under the auspices of

A. Dorothea Dix.

B. William Lloyd Garrison.
C. the American Peace Society.
D. the American Colonization Society.

11. As drafted by Vice President John C. Calhoun of South Carolina, the right of a state to set aside federal law was called
A. reconciliation.
B. excision.
C. nullification.
D. abdication.

12. After the War of 1812, the first expansionist goal of the republic was the acquisition of
B. Florida.
C. the Oregon Country.
D. California.

13. The election of 1824 that brought _______ to the presidency was the most controversial and complicated election in American history.
A. Andrew Jackson.
B. James Monroe

14. Which of the following utopian communities was founded and established in New York State?
A. Spiritualist
B. Shaker Village
C. Oneida
D. New Harmony

15. The first fully developed American factory system emerged in the _______ industry.
A. iron
B. distilling
C. textile
D. sugarcane

16. The Panic of 1837 resulted in large measure from
A. the policies of John Quincy Adams.
B. the policies of Martin Van Buren’s administration.
C. the costs associated with Indian removal.
D. complex changes in the international economic system.

17. The Liberator was to William Lloyd Garrison as the North Star was to
A. Harriet Tubman.
B. the Grimke sisters.
C. Frederick Douglass.
D. Theodore Dwight Weld.

18. Under the leadership of Lucretia Mott and Elizabeth Cady Stanton, the high point of the Seneca Falls convention was the drafting of the Declaration of
A. Women’s Rights.
B. Human Rights.
C. Sentiments.
D. Opinion.

19. In the Old South, the majority of slaves
A. lived on plantations with 20 or more slaves.
B. worked under a task system.
C. lived on small farms.
D. lived on plantations with 100 or more slaves.

20. The largest of the five so-called “civilized tribes” was the
A. Creek.
B. Seminole.
C. Cherokee.
D. Choctaw.

*****************************************************************

Multiple Choice

The relationship among the board of directors, top management, and shareholders is:
A. synergy
B. management
C corporate governance
D. strategy

Jill Miller loves to collect ads and stories from her fashion magazines to share with her closest friends at school. Jill’s group is among the first in her school to recognize new fashion trends. The “sisters” as Jill likes to call her friends then influence other young females with their teen fashion information, comparison, and guidance. Jill and her “sisters” are best described as:

A. reference group
B. aspirational group
C subculture
D. lifestyle cluster
E. social unit

Uncontrollable costs:

A. are influenced by a mangers decision and actions.
B. provide evidence about a mangers performance
C. are also referred to as opportunity costs
D. should be ignored in evaluating the responsibility center managers performance

Promoting diversity makes sense because:

A. its the best way to balance the fact white male workers still dominate the US workforce
B. diverse employees can build better relationships with customers among many other reasons
C. a diverse group tends to reach agreement on decisions more quickly than a homogenous group
D. workers from other nations nee to get in step with how we do things in the US

Servant leadership is best described as the belief that:

A. leaders must distinguish right from wrong then do right.
B. employee participation should be increased through the use of teams.
C. a leaders self interest should be replaced be learning from others, helping others, and encouraging others in the organization
D. decision making should be delegated to the lowest levels of an organization
E. power, purpose, and privilege reside with those at the top of an organization

The change from traditional to activity-based costing may reveal that:

A. high volume products are overcosted.
B. low volume products are overcosted.
C. both high and low volume products are overcosted.
D. both high and low volume products are underscosted.

A _____________ leader defines and uses signals and symbols to influence corporate culture:

A. inspirational
B. transactional
C. transformational
D. cultural
E. values-based

Idealism about future outcomes achieved through an organizations people is often reflected in the broadly stated ____________ created by the organizations leaders.

A. strategic plan
B. Mission statement
C. employment contract
D. architecture for alignment and implementation
E. vision statement

The requirements of a board of directors vary significantly by country and by state. However, there is a developing consensus as to what a boards major responsibilities should be. ____________ is NOT one of these responsibilities.

A. reviewing and approving the use of resources
B. setting overall corporate strategy, direction, and vision
C. Controlling, monitoring, or supervising top management
D. becoming directly involved in managerial decisions
E. hiring and firing the CEO and top mangement

Matt almost has enough money to buy a motorcycle. After studying all of the literature Yamaha, Harley Davidson, Honda, Suzuki, and Kawaski brands he relaizes there are many differences. He decides the most important feature is the gas mileage since gas has become so expensive these days. After looking at his options he buys the Yamaha because it gets the best gas mileage. Matt adopted the ____________ heuristic model of consumer buying behavior.

A. conjunctive
B. elimination-by-aspects
C. expectancy-value
D. lexicographic

Kimberly clark was using a ___________________ attack strategy when it introduced Huggies and grabbed a large portion of P&G’s disposable market share. Huggies was a much better-fitting diaper than P&G Pampers.

A. flank
B. encirclement
C. frontal
D. guerilla
E. innovative

When Cameron buys a jacket from www.landend.com, the transaction occurs in the ____________ domain? n>

A. C2C
B. C2B
C. B2B
D. B2C

Peterson research uncovered the following facts in a recent survey of women: the majority of women do some physical exercise, value family, attend religious service regulary, engage in social drinking, hold mostly conservative attitudes, and eat out with family at least once a week. This is a ____________ analysis.

A. demographic
B. lifestyle
C. attitudinal
D. psychological
E. brand personality

*****************************************************************

Multiple Choice

1) Which of the following legal forms of organization is characterized by limited liability?
a. Professional partnership
b. Sole proprietorship
c. Corporation
d. Partnership

2) The financial manager may be responsible for any of the following EXCEPT
a. keeping track of quarterly tax payments.
b. analyzing quarterly budget and performance reports.
c. analyzing the effects of more debt on the firms capital structure.
d. determining whether to accept or reject a capital asset acquisition.

3) The financial managers financing decisions determine
a. both the mix and the type of assets found on the firms balance sheet.
b. both the mix and the type of assets and liabilities found on the firms balance
sheet.
c. the most appropriate mix of short-term and long-term financing.
d. the proportion of the firms earnings to be paid as dividend.

4) Wealth maximization as the goal of the firm implies enhancing the wealth of
a. the firms stockholders.
b. the Board of Directors.
c. the firms employees.
d. the federal government.

5) The amount earned during the accounting period on each outstanding share of common stock is called
a. common stock dividend.
b. net profits after taxes.
c. earnings per share.
d. net income.

6) Cash flow and risk are the key determinants in share price. Increased cash flow results in ________, other things remaining the same.
a. an unchanged share price
b. a lower share price
c. an undetermined share price
d. a higher share price

7) A more recent issue that is causing major problems in the business community is
a. short-term versus long-term financial goals of management.
b. the privatization of ownership.
c. ethical problems.
d. environmental concerns.

8) The implementation of a pro-active ethics program is expected to result in
a. a positive corporate image and increased respect, but is not expected to affect
cash flows.
b. a positive corporate image and increased respect, but is not expected to affect
share price.
c. an increased share price resulting from a decrease in risk, but is not expected to affect cash flows.
d. a positive corporate image and increased respect, a reduction in risk, and enhanced cash flow resulting in an increase in share price.

9) The Sarbanes-Oxley Act of 2002 was passed in response to
a. the decline in technology stocks.
c. false disclosures in financial reporting.
d. all of the above

10) The key participants in financial transactions are individuals, businesses, and governments. Individuals are net ________ of funds, and businesses are net ________ of funds.
a. demanders; suppliers
b. purchasers; sellers
c. suppliers; demanders
d. users; providers

11) The over-the-counter (OTC) market is
a. an intangible market for unlisted securities.
b. a place where securities are bought and sold.
c. the New York Stock Exchange.
d. an organized stock exchange.

12) The two key financial markets are
a. primary market and secondary market.
b. capital market and secondary market.
c. primary market and money market.
d. money market and capital market.

13) Securities exchanges create efficient markets that do all of the following EXCEPT
a. ensure a market in which the price reflects the true value of the security.
b. control the supply and demand for securities through price.
c. allocate funds to the most productive uses.
d. allow the price to be determined by supply and demand of securities.

14) The tax deductibility of various expenses such as general and administrative expenses ________ their after-tax cost.
a. reduces
b. has no effect on
c. has an undetermined effect on
d. increases

15) The dividend exclusion for corporations receiving dividends from another
corporation has resulted in
a. stock investments being relatively less attractive, relative to bond investments made by one corporation in another corporation.
b. stock investments being relatively more attractive relative to bond investments made by one corporation in another corporation.
c. a lower cost of equity for the corporation paying the dividend.
d. a higher relative cost of bond-financing for the corporation paying the dividend.

16) The rule-setting body, which authorizes generally accepted accounting principles is
a. FASB.
b. Federal Reserve System.
c. SEC.
d. GAAP.

17) Candy Corporation had pretax profits of \$1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of \$50,000. There were 100,000 shares outstanding and no interest expense. What were Candy Corporations earnings per share?
a. \$4.52
b. \$7.59
c. \$7.42
d. \$3.91

18) The analyst should be careful when evaluating a ratio analysis that
a. the dates of the financial statements being compared are the same time.
b. pre-audited statements are used.
c. neither A nor B.
d. both A and B.

19) The ________ is useful in evaluating credit and collection policies.
a. current asset turnover
b. current ratio
c. average collection period
d. average payment period

20) The ________ ratio may indicate poor collections procedures or a lax credit policy.
a. average collection period
b. average payment period
c. inventory turnover
d. quick

21) ________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.
a. Lenders and suppliers
c. Stockholders span>
d. Customers

22) If the inventory turnover is divided into 365, it becomes a measure of
a. sales turnover.
b. the average collection period.
c. sales efficiency.
d. the average age of the inventory.

23) The ________ ratio may indicate that the firm will not be able to meet interest obligations due on outstanding debt.
a. times interest earned
b. return on total assets
c. net profit margin
d. debt

24) The ________ measures the percentage of profit earned on each sales dollar before interest and taxes.
a. net profit margin
b. operating profit margin
c. earnings available to common shareholders
d. gross profit margin

25) In the DuPont system, the return on total assets (asset) is equal to
a. (net profit margin) × (fixed asset turnover).
b. (return on equity) × (total asset turnover).
c. (return on equity) × (financial leverage multiplier).
d. (net profit margin) × (total asset turnover).

26) The financial leverage multiplier is an indicator of how much ________ a
corporation is utilizing.
a. long-term debt
b. total debt
c. operating leverage
d. total assets

27) Allocation of the historic costs of fixed assets against the annual revenue they generate is called
a. amortization.
b. net profits.
c. depreciation.
d. gross profits.

28) The cash flows from operating activities section of the statement of cash flows considers
a. interest expense.
b. stock repurchases.
c. dividends paid.
d. cost of raw materials.

29) The key aspects of the financial planning process are
a. cash planning and investment planning.
b. cash planning and profit planning.
c. investment planning and profit planning.
d. cash planning and financing.

30) A firm has projected sales in May, June, and July of \$100, \$200, and \$300,
respectively. The firm makes 20 percent of sales for cash and collects the balance one month following the sale. The firms total cash receipts in July
a. are \$200.
b. are \$220.
c. are \$180.
d. cannot be determined with the information provided.

31) A projected excess cash balance for the month may be
a. financed with long-term securities.
b. invested in marketable securities.
c. financed with short-term securities.
d. invested in long-term securities.

32) In the month of August, a firm had total cash receipts of \$10,000, total cash disbursements of \$8,000, depreciation expense of \$1,000, a minimum cash
balance of \$3,000, and a beginning cash balance of \$500. The excess cash
balance (required financing) for August is
a. required total financing of \$500.
b. required total financing of \$2,500.
c. excess cash balance of \$500.
d. excess cash balance of \$5,500.

33) The key inputs for preparing pro forma income statements using the simplifed approaches are the
a. sales forecast for the preceding year and financial statements for the coming year.
b. sales forecast for the coming year and the cash budget for the preceding year.
c. cash budget for the coming year and sales forecast for the preceding year.
d. sales forecast for the coming year and financial statements for the preceding year.

34) The ________ method of developing a pro forma balance sheet estimates values of certain balance sheet accounts while others are calculated. In this method, the firms external financing is used as a balancing, or plug, figure.
a. cash
b. accrual
c. judgmental
d. percent-of-sales

35) The strict application of the percent-of-sales method to prepare a pro forma income statement assumes the firm has no fixed costs. Therefore, the use of the past cost and expense ratios generally tends to ________ profits when sales are increasing.
a. have no effect on
b. accurately predict
c. overstate
d. understate

36) A firm plans to retire outstanding bonds in the next planning period. The statements that will be affected are the
a. pro forma balance sheet and cash budget.
b. pro forma income statement and pro forma balance sheet.
c. cash budget and statement of retained earnings.
d. pro forma income statement, pro forma balance sheet, cash budget, and statement of retained earnings.

37) Utilizing past cost and expense ratios (percent-of-sales method) when preparing pro forma financial statements will tend to
a. overstate profits when sales are increasing.
b. neither understate nor overstate profits.
c. understate profits when sales are increasing.
d. understate profits when sales are decreasing.

38) In a period of rising sales utilizing past cost and expense ratios (percent of-
sales method), when preparing pro forma financial statements and planning
financing, will tend to
a. overstate retained earnings and understate the financing needed.
b. overstate retained earnings and overstate the additional financing needed.
c. understate retained earnings and overstate the financing needed.
d. understate retained earnings and understate the additional financing needed.

39) For positive interest rates, the future value interest factor is
a. sometimes negative.
b. always greater than 1.0.
c. never greater than 25.
d. always less than 0.

40) The amount of money that would have to be invested today at a given interest
rate over a specified period in order to equal a future amount is called
a. present value.
b. future value.
c. future value interest factor.
d. present value interest factor.

41) The present value of \$200 to be received 10 years from today, assuming an opportunity cost of 10 percent, is
a. \$200.
b. \$50.
c. \$518.
d. \$77.

42) The future value of a dollar ________ as the interest rate increases and ________ the farther in the future an initial deposit is to be received.
a. increases; increases
b. decreases; increases
c. decreases; decreases
d. increases; decreases

43) The present value of a \$25,000 perpetuity at a 14 percent discount rate is
a. \$350,000.
b. \$285,000.
c. \$178,571.
d. \$219,298.

44) The future value of \$100 received today and deposited in an account for four years paying semiannual interest of 6 percent is
a. \$450.
b. \$889.
c. \$134.
d. \$126.

45) The future value of an annuity of \$1,0
00 each quarter for 10 years, deposited at 12 percent compounded quarterly is

a. \$75,401.
b. \$17,549.
c. \$93,049.
d. \$11,200.

46) Adam borrows \$4,500 at 12 percent annually compounded interest to be repaid in four equal annual installments. The actual end-of-year payment is
a. \$2,641.
b. \$1,125.
c. \$942.
d. \$1,482.

47) Ashley owns stock in a company which has consistently paid a growing dividend over the last five years. The first year Ashley owned the stock, she received \$1.71 per share and in the fifth year, she received \$2.89 per share.
What is the growth rate of the dividends over the last five years?
a. 7 percent
b. 5 percent
c. 14 percent
d. 12 percent

48) Julian was given a gold coin originally purchased for \$1 by his great-grandfather 50 years ago. Today the coin is worth \$450. The rate of return realized on the sale of this coin is approximately equal to
a. 13%.
b. 50%.
c. 7.5%.
d. cannot be determined with given information.

49) Aunt Bertha borrows \$19,500 from the bank at 8 percent annually compounded interest to be repaid in 10 equal annual installments. The interest paid in the third year is ________.
a. \$1,947.10
b. \$1,336.00
c. \$2,906.11
d. \$1,560.14

50) What annual rate of return would Grandma Zoe need to earn if she deposits \$1,000 per month into an account beginning one month from today in order to have a total of \$1,000,000 in 30 years?
a. 5.98%
b. 5.28%
c. 6.23%
d. 4.55%

51) ________ is the chance of loss or the variability of returns associated with a given asset.
a. Value
b. Probability
c. Risk
d. Return

52) The goal of an efficient portfolio is to
a. minimize profit in order to minimize risk.
b. maximize risk for a given level of return.
c. maximize risk in order to maximize profit.
d. minimize risk for a given level of return.

53) Combining negatively correlated assets having the same expected return results in a portfolio with ________ level of expected return and ________level of risk.
a. the same; a lower
b. a lower; a higher
c. a higher; a lower
d. the same; a higher

54) The purpose of adding an asset with a negative or low positive beta is to
a. reduce risk.
b. increase profit.
c. reduce profit.
d. increase risk.

55) The portion of an assets risk that is attributable to firm-specific, random causes is called
a. unsystematic risk.
b. systematic risk.
c. nondiversifiable risk.
d. none of the above

56) ________ risk represents the portion of an assets risk that can be eliminated by combining assets with less than perfect positive correlation.
a. Systematic
b. Total
c. Nondiversifiable
d. Diversifiable

57) Nico owns 100 shares of stock X which has a price of \$12 per share and 200 shares of stock Y which has a price of \$3 per share. What is the proportion of Nicos portfolio invested in stock X?
a. 50%
b. 77%
c. 67%
d. 33%

58) As risk aversion increases
a. investors required rate of return will decrease.
b. a firms beta will decrease.
c. a firms beta will increase.
d. investors required rate of return will increase.

59) The ________ rate of interest creates equilibrium between the supply of savings and the demand for investment funds.
a. inflationary
b. risk-free
c. real
d. nominal

60) The ________ rate of interest is typically the required rate of return on a three-month U.S. Treasury bill.
b. real
c. nominal
d. risk-free

61) An upward-sloping yield curve that indicates generally cheaper short-term borrowing costs than long-term borrowing costs is called
a. flat yield curve.
b. normal yield curve.
c. inverted yield curve.
d. none of the above.

62) The cost of long-term debt generally ________ that of short-term debt.
a. has no relation to
b. is less than
c. is equal to
d. is greater than

63) ________ is a paid individual, corporation, or commercial bank trust department that acts as a third party to a bond indenture to ensure that the issuer does not default on its contractual responsibilities to the bondholders.
a. A trustee
b. A bond rating agency
c. A bond issuer
d. An investment banker

64) An example of a standard debt provision is the
a. constraints on subsequent borrowing.
b. requirement to pay taxes and other liabilities when due.
c. limiting of the corporations annual cash dividend payments.
d. restricting the corporation from disposing of fixed assets.

65) Another name for a deeply discounted bond that pays no coupon interest is a
a. floating rate bond.
b. junk bond.
c. subordinated debenture.
d. zero coupon bond.

66) A debenture is
a. a secured bond that is secured by unspecified assets.
b. a lengthy legal document stating the conditions under which a bond has been issued.
c. an unsecured bond that only creditworthy firms can issue.
d. a bond secured by specific asset.

67) In utilizing a ________ the issuer can annually deduct the current years interest accrual without having to actually pay the interest until the bond matures.
a. junk bond
b. extendible notes
c. zero coupon bond
d. floating rate bond

68) The less certain a cash flow, the ________ the risk, and the ________ the present value of the cash flow.
a. higher; higher
b. lower; lower
c. higher; lower
d. lower; higher

69) Jia Hua Enterprises wants to issue sixty 20-year, \$1,000 par value, zero coupon bonds. If each bond is priced to yield 7 percent, how much will Jia Hua receive (ignoring issuance costs) when the bonds are first sold?
a. \$12,393
b. \$15,505
c. \$18,880
d. \$11,212
e. \$20,000

70) If bankruptcy were to occur, stockholders would have prior claim on assets over
a. preferred stockholders.
b. unsecured creditors.
c. secured creditors.
d. no one.

71) The advantages of issuing preferred stock from the common stockholders perspective include all of the following EXCEPT
a. increased leverage.
b. flexibility.
c. use in mergers. >
d. seniority of preferred stockholders claim over common stockholders.

72) All of the following features may be characteristic of preferred stock EXCEPT
a. convertible.
b. no maturity date.
c. callable.
d. tax-deductible dividends.

73) Preferred stockholders
a. do have preference over bondholders in the case of liquidation.
b. do not have preference over bondholders in the case of liquidation.
c. do not have preference over common stockholders in the case of liquidation.
d. two of the above are true statements

74) The opportunity for management to purchase a certain number of shares of their firms common stock at a specified price over a certain period of time is a
a. stock option.
b. stock right.
c. pre-emptive right.
d. warrant.

75) Stock rights provide the stockholder with
a. cumulative voting privileges.
b. the opportunity to receive extraordinary earnings.
c. the right to elect the board of directors.
d. certain purchase privileges of additional stock shares in direct proportion based on their number of owned shares.

76) Tangshan China Companys stock is currently selling for \$80.00 per share.
The expected dividend one year from now is \$4.00 and the required return is
13 percent. What is Tangshans dividend growth rate assuming that dividends
are expected to grow at a constant rate forever?
a. 9%
b. 10%
c. 8%
d. 11%

77) Which of the following valuation methods is superior to the others in the list since it considers expected earnings?
a. P/E multiple
b. liquidation value
c. book value
d. present value of the interest

78) Nico Corporation expects to generate free-cash flows of \$200,000 per year for the next five years. Beyond that time, free cash flows are expected to grow at a constant rate of 5 percent per year forever. If the firms average cost of capital is 15 percent, the market value of the firms debt is \$500,000, and Nico has a half million shares of stock outstanding, what is the value of Nicos stock?
a. \$0.00
b. \$1.43
c. \$3.43
d. \$2.43

79) A capital expenditure is all of the following EXCEPT
a. an outlay for current asset expansion.
b. an outlay made for the earning assets of the firm.
c. commonly used to expand the level of operations.
d. expected to produce benefits over a period of time greater than one year.

80) ________ projects have the same function; the acceptance of one ________ the others from consideration.
a. Mutually exclusive; eliminates
b. Replacement; does not eliminate
c. Capital; eliminates
d. Independent; does not eliminate

81) In international capital budgeting decisions, political risks can be minimized using all of the following strategies EXCEPT
a. structuring the financing of such investments as equity rather than as debt.
b. structuring the financing of such investments as debt rather than as equity.
c. structuring the investment as a joint venture and selecting well-connected local partner.
d. none of the above

82) When evaluating a capital budgeting project, the change in net working capital must be considered as part of
a. the initial investment.
b. the incremental operating cash inflows.
c. the operating cash inflows.
d. the operating cash outflows.

83) The tax treatment regarding the sale of existing assets that are sold for their book value results in
a. recaptured depreciation taxed as ordinary income.
b. no tax benefit or liability.
c. an ordinary tax benefit.
d. a capital gain tax liability and recaptured depreciation taxed as ordinary income.

84) A corporation is selling an existing asset for \$1,000. The asset, when purchased, cost \$10,000, was being depreciated under MACRS using a five year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is
a. \$3,600 tax liability.
b. \$280 tax benefit.
c. \$0 tax liability.
d. \$1,100 tax liability.

85) Unsophisticated capital budgeting techniques do not
a. examine the size of the initial outlay.
b. take into account an unconventional cash flow pattern.
c. explicitly consider the time value of money.
d. use net profits as a measure of return.

86) Should Tangshan Mining company accept a new project if its maximum payback is 3.5 years and its initial after tax cost is \$5,000,000 and it is expected to provide after-tax operating cash inflows of \$1,800,000 in year 1,\$1,900,000 in year 2, \$700,000 in year 3 and \$1,800,000 in year 4?
a. Yes
b. No
c. It depends
d. None of the above

87) The minimum return that must be earned on a project in order to leave the firms value unchanged is
a. the compound rate.
b. the cost of capital.
c. the interest rate.
d. the internal rate of return.

88) A firm would accept a project with a net present value of zero because
a. the project would enhance the wealth of the firms owners.
b. the return on the project would be positive.
c. the project would maintain the wealth of the firms owners.
d. the return on the project would be zero.

89) What is the NPV for the following project if its cost of capital is 15 percent and its initial after tax cost is \$5,000,000 and it is expected to provide after-tax operating cash inflows of \$1,800,000 in year 1, \$1,900,000 in year 2, \$1,700,000 in year 3 and \$1,300,000 in year 4?
a. (\$137,053)
b. \$371,764
c. \$1,700,000
d. None of the above

90) What is the NPV for the following project if its cost of capital is 0 percent and its initial after tax cost is \$5,000,000 and it is expected to provide after tax operating cash inflows of \$1,800,000 in year 1, \$1,900,000 in year 2, \$1,700,000 in year 3 and \$1,300,000 in year 4?
a. \$1,700,000
b. \$137,053
c. \$371,764
d. None of the above

91) The ________ is the compound annual rate of return that the firm will earn if it invests in the project and receives the given cash inflows.
a. internal rate of return
b. cost of capital
c. discount rate
d. opportunity cost

92) When evaluating projects using internal rate of return,
a. the discount rate and magnitude of cash flows do not affect internal rate of return.
b. projects having higher early-year cash flows tend to be preferred at lower discount rates.
c. projects having higher early-year cash flows tend to be preferred at higher discount rates.
d. projects
having lower early-year cash flows tend to be preferred at higher

discount rates.

93) Diagrams that permit the mapping of the various investment decision alternatives and payoffs as well as their probabilities of occurrence are called
a. multiple regression analysis.
b. simulations.
c. decision trees.
d. sensitivity analysis.

94) The advantage of using simulation in the capital budgeting process is
a. the availability of a continuum of risk-return trade-offs which may be used as the basis for decision-making.
b. that it generates a continuum of risk-return trade-offs rather than a single point estimate.
c. dependability of predetermined probability distributions.
d. ease of calculation.

95) Breakeven cash inflow refers to
a. the minimum level of cash inflow necessary for a project to be acceptable, that is, IRR < cost of capital.
b. the minimum level of cash inflow necessary for a project to be acceptable, that is, NPV > \$0.
c. the minimum level of cash inflow necessary for a project to be acceptable, that is, NPV < \$0.
d. none of the above is correct

96) A behavioral approach that evaluates the impact on the firms return of simultaneous
changes in a number of project variables is called
a. simulation analysis.
b. scenario analysis.
c. sensitivity analysis.
d. none of the above

97) The ________ reflects the return that must be earned on the given project to compensate the firms owners adequately according to the projects variability of cash flows.
a. internal rate of return
b. cost of capital
c. average rate of return

98) An approach to capital rationing that involves graphing project returns in descending order against the total dollar investment to determine the group of acceptable projects is called the
a. net present value approach.
b. the internal rate of return approach.
c. the profitability index approach.
d. the payback approach.

99) The cost to a corporation of each type of capital is dependent upon
a. the risk-free rate of each type of capital plus the business risk and the financial risk of the firm.
b. the risk-free rate of each type of capital plus the business risk of the firm.
c. the risk-free rate of each type of capital plus the financial risk of the firm.
d. the risk-free rate of bonds plus the business risk of the firm.

100) The before-tax cost of debt for a firm which has a 40 percent marginal tax rate is 12 percent. The after-tax cost of debt is
a. 12 percent.
b. 7.2 percent.
c. 4.8 percent.
d. 6.0 percent.

*****************************************************************

Multiple Choice

RES 341 Week 3
.
1.  Briefly, what is probability (include in this the 3 “approaches” to probability discussed in your reading material.

2.  Please (1) work the following problems, (2) tell me what rule or principle you used to solve them and (3) then look at others’ answers to check yourself and that person — let’s see if we can come to consensus on them

Problem #1:  Ninety students will graduate from Lima Shawnee High School this spring.  Of the 90 students, 50 are planning to attend college.  Two students are to be picked at random to carry flags at graduation.

a.  What is the probability both of the selected students plan to attend college?

b.  What is the probability one of the two selected students plans to attend college?

Problem #2:  A survey of undergraduate students in the School of Business at Northern University revealed the following regarding the gender and majors of the students:

Major
Gender            Accounting     Management    Finance   total
Male                  100           150           50      300
Female                100            50           50      200
total               200           200          100      500

a. What is the probability of selecting a female student?

b. What is the probability of selecting a finance or accounting major?
c. What is the probability of selecting a female or an accounting major?   Which rule of

d. Are gender and major independent? Why?

e. What is the probability of selecting an accounting major, given that the person selected is a male?

f.  Suppose two students are selected randomly to attend a lunch with the president of the
university. What is the probability that both of those selected are accounting majors?
Problem #3:  Reynolds Construction Company has agreed not to erect all look-alike homes in a new subdivision. Five exterior designs are offered to potential home buyers. The builder has standardized three interior plans that can be incorporated in any of the five exteriors. How many different ways can the exterior and interior plans be offered to potential home buyers?

Problem #4.  A puzzle in the newspaper presents a matching problem. The names of 10 in one U.S. presidents are listed column, and their vice presidents are listed in random order in the second column. The puzzle asks the reader to match each president with his vice president. If you make the matches randomly, how many matches are possible? What is the probability all 10 of your matches are correct?

*****************************************************************

Multiple Choice

Question 1
Supply chain management systems include manufacturers, warehouses, stores, and:

A. customers.
B. competitors.
D. suppliers.
Question 2
__________ is an element of supply chain management that concentrates on the movement and control of the physical products.

A. Dispatcher decision-making
B. Strategic relationship management
C. Logistics management
D. Corporate vertical marketing

Question 3
Manufacturers use wholesalers and retailers because:

A. they have no other choice.
B. they do not cost much.
C. they create value through convenience and lower prices.
D. wolesalers control retailers.

Question 4
In the 1990s before the widespread use of the Internet, the typical, well-organized order-to-delivery process i
ncluded order creation using a telephone, fax or mail, order processing, credit authorization and warehousing and deliver often took:

A. a month or more.
B. six to eight weeks.
C. up to a week.
D. 15-30 days.

Question 5
Ticketing and marking refers to:

A. quantifying JIT reliability and assessing its impact.
B. booking shipping routes and marking the distribution destination.
C. creating and placing price and identification labels.
D. determining discounts and marking them into the computerized EDI.

Question 6
Typically, manufacturers and retailers exchange business documents through a(n) __________ system.

A. cross-docking Internet
B. electronic data interchange
D. vertical conflict reduction

Question 7
CPFR refers to __________ inventory management systems.

A. centralized, planning, factoring, and receiving
B. collection, partnering, franchising, and receiving
C. collaborative, planning, forecasting, and replenishment
D. corporate, partnering, facilitation, and replenishment

Question 8
__________ can improve supply chain efficiency by allowing manufacturers to sell on consignment, which shifts the cost of maintaining inventory from the retailer to the manufacturer, and shifting the time of sales personnel from writing orders to selling new items and developing relationships

A. JIT systems

C. The Internet

D. Vendor-managed inventory

Question 9

In a(n) __________ supply chain, none of the participants has any control over the others.

A. cooperative

B. corporate

C. contractual

D. conventional

Question 10

There are a number of different kinds of supply chains, but when there is a great deal of volume and a powerful channel participant, you are likely to find a(n) __________ supply chain.

A. cooperative

B. conventional

C. contractual

Question 11

Today, __________ dominate their supply chains.

A. large retailers

B. manufacturers

C. distributors

D. wholesalers

Question 12

Generally, the larger and more sophisticated the channel member, the less likely that they will:

A. use intermediaries.

B. rely on marketing research.

C. use multi-channel marketing.

D. use intensive distribution.

Question 13

__________ are combating competitive pressures by offering fresh food and healthy fast food, tailoring assortments to local marketing, opening locations closer to where consumers work and shop, and adding new services.

A. Warehouse clubs

B. Supercenters

C. Convenience stores

D. Department stores

Question 14

Category killers are also known as:

A. full-line discount stores.

B. category specialists.

C. specialty stores.

D. warehouse clubs.

Question 15

Consumers visiting __________ often comment that they feel like they are on a treasure hunt, searching for a bargain.

A. department stores

B. off-price retailers

C. discount stores

D. lower value stores

Question 16

Retailers use __________ to get customers into their stores.

A. in-store promotions

B. specialty product displays

D. off-price wholesaling

Question 17

For brick-and-mortar retailers, a key ingredient to place decisions is:

A. product placement promotion.

B. convenient locations.

C. private-label places.

D. off-price placement.

Question 18

Benefits of __________ as a channel include matching or exceeding the convenience of catalogs, providing a great deal of information about products, and collecting information about how customers shop.

A. the store

B. mail order

C. direct mail

D. the Internet

Question 19

__________ communities are networks of social shoppers who see an enhanced emotional connection with other participants during an Internet shopping experience.

A. Self-actualizing

B. Virtual

C. Innovator

D. Gen-Y

Question 20

__________ provide a consistent experience for on-line customers who cannot touch and feel merchandise prior to purchasing it.

A. Shopping bots

B. Price guarantees

C. Reduced shipping costs

D. Brands

# Mixed115

Multiple Choice

Using “keystoning” as a pricing strategy:

A. maximizes the difference between total cost and total variable cost.
B. avoids having to participate in pure competition.
C. ignores consumers’ sensitivity to changes in prices.
D. allows marketers to estimate substitution cross-price elasticity.

Which of the following is NOT one of the Five C’s of pricing?

A. Customers
B. Channel members
C. Cost
D. Collaboration

When the media and messages in a promotional campaign are not aligned with the company strategies or when the channels are not appropriate for the selected price levels, it indicates something is wrong with:

A. cost-benefit price ratio.
B. promotional mix.
C. break-even analysis.
D. the pricing strategy.

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a __________ pricing strategy.

A. sales orientation
B. target profit
C. target return
D. status quo

A __________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels.

A. sales orientation
B. target profit
C. target return
D. maximizing profits

The fact that millions of consumers are using online search engines for comparison shopping has:

A. reduced overall demand.
B. increased consumers’ price sensitivity.
C. increased the number of oligopoly markets.
D. reduced the contribution per unit cross-pricing elasticity.

A demand curve shows the relationship between __________ in a period of time.

A. price and quantity demanded
B. demand and cost
C. price and elasticity
D. profit and price

Price elasticity of demand is the ratio of:

A. percentage change in quantity demanded divided by the percentage change in price.
B. percentage change in price divided by percentage change in quantity demanded.
C. change in price divided by change in quantity demanded.
D. change in quantity demanded divided by the change in price.

The more substitutes that exist in a market:

A. the lower the price elasticity for each product.
B. the greater the income elasticity for each product.
C. the easier it will be to utilize a status quo price elasticity strategy.
D. the more sensitive consumers will be to changes in the price of a particular product.

At the break-even point:

A. contribution per unit is zero.
B. price is maximized.
C. profits are zero.
D. fixed costs are reduced to zero.

The break-even point is estimated by:

A. multiplying revenue per unit times the quantity sold.
B. dividing fixed contribution per unit by variable costs.
C. multiplying fixed costs by contribution per unit.
D. dividing fixed costs by contribution per unit.

If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is:

A. conditionally inelastic.
B. price inelastic.
C. price elastic.
D. conditionally elastic.

__________ is an attempt by a manufacturer, vendor or supplier to set a minimum possible price, to control the image of the product or dictate the price, which amounts to a legal form of what would otherwise be price fixing.

A. Conditional pricing
B. Controlled pricing support
C. Channel enforcement
D. Retail price maintenance

In addition to knowing more about the products, services, manufacturers and retailers Internet users know more about prices. These consumers are becoming more:

A. price insensitive.
B. price observant.
C. price neutral.
D. price sensitive.

For marketers to advertise a price as their __________, the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.

A. fixed price
B. zone price
C. regular price

__________ pricing tactics lower the price of a product below cost.

A. Fixed
B. Zone
C. Regular

__________ is the practice of colluding with other firms to control prices.

A. Competitive favoritism
B. Industry tightening
C. Slacking
D. Price fixing

Labor, materials, and energy are typically __________ costs.

A. fixed
B. incidental
C. variable
D. inelastic

The practice of becoming the largest purchaser of products from a given supplier is an example of:
2. Growth strategies
3. Differentiation
4. Locking in the supplier

Continuous speech recognition systems:
1. Compare speech patterns to a dictionary
Allow a computer to understand a few words from a voice it has never heard before
3. Require users to pause between each spoken word
4. Recognize conversationally paced speech

Smart card technology:
1. Allows debit cards to store a cash balance on a card and electronically transfer some of it to others to pay for items and services
2. Is not yet available in the United States
3. Is commonly used by banks to read and process checks
4. All of the choices are correct.

The second generation of computers relied on _______________.
1. miniaturized circuits
2. transistors
3. vacuum tubes
4. punch cards

Data are processed and stored in a computer system through the presence or absence of electronic or magnetic signals to the computer. This is called a “binary” representation of data, because the computer and the media can exhibit only _______________ states or conditions.
1. two
2. three
3. five
4. ten

Consumers judge the benefits the product delivers against the __________ necessary to obtain it.

A. price
B. profit
C. sacrifice
D. total return
If a marketer prices their product too low, it may:

A. result in lower costs.
B. signal p
oor quality.

C. increase contribution per unit.
D. result in inelastic demand.

Using “keystoning” as a pricing strategy:

A. maximizes the difference between total cost and total variable cost.
B. avoids having to participate in pure competition.
C. ignores consumers’ sensitivity to changes in prices.
D. allows marketers to estimate substitution cross-price elasticity.

Which of the following is NOT one of the Five C’s of pricing?

A. Customers
B. Channel members
C. Cost
D. Collaboration

When the media and messages in a promotional campaign are not aligned with the company strategies or when the channels are not appropriate for the selected price levels, it indicates something is wrong with:

A. cost-benefit price ratio.
B. promotional mix.
C. break-even analysis.
D. the pricing strategy.

Naomi tells her sales representatives the goal is to generate at least a 20 percent return on investment for all of the industrial building supplies they sell. Naomi is using a __________ pricing strategy.

A. sales orientation
B. target profit
C. target return
D. status quo

A __________ strategy involves accurately measuring all the factors needed to predict sales and profits at various price levels.

A. sales orientation
B. target profit
C. target return
D. maximizing profits

The fact that millions of consumers are using online search engines for comparison shopping has:

A. reduced overall demand.
B. increased consumers’ price sensitivity.
C. increased the number of oligopoly markets.
D. reduced the contribution per unit cross-pricing elasticity.

A demand curve shows the relationship between __________ in a period of time.

A. price and quantity demanded
B. demand and cost
C. price and elasticity
D. profit and price

Price elasticity of demand is the ratio of:

A. percentage change in quantity demanded divided by the percentage change in price.
B. percentage change in price divided by percentage change in quantity demanded.
C. change in price divided by change in quantity demanded.
D. change in quantity demanded divided by the change in price.

The more substitutes that exist in a market:

A. the lower the price elasticity for each product.
B. the greater the income elasticity for each product.
C. the easier it will be to utilize a status quo price elasticity strategy.
D. the more sen

sitive consumers will be to changes in the price of a particular product.

At the break-even point:

A. contribution per unit is zero.
B. price is maximized.
C. profits are zero.
D. fixed costs are reduced to zero.

The break-even point is estimated by:

A. multiplying revenue per unit times the quantity sold.
B. dividing fixed contribution per unit by variable costs.
C. multiplying fixed costs by contribution per unit.
D. dividing fixed costs by contribution per unit.

If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is:

A. conditionally inelastic.
B. price inelastic.
C. price elastic.
D. conditionally elastic.

__________ is an attempt by a manufacturer, vendor or supplier to set a minimum possible price, to control the image of the product or dictate the price, which amounts to a legal form of what would otherwise be price fixing.

A. Conditional pricing
B. Controlled pricing support
C. Channel enforcement
D. Retail price maintenance

In addition to knowing more about the products, services, manufacturers and retailers Internet users know more about prices. These consumers are becoming more:

A. price insensitive.
B. price observant.
C. price neutral.
D. price sensitive.

For marketers to advertise a price as their __________, the Better Business Bureau recommends that at least 50 percent of the sales of a product occur at that price.

A. fixed price
B. zone price
C. regular price

__________ pricing tactics lower the price of a product below cost.

A. Fixed
B. Zone
C. Regular

__________ is the practice of colluding with other firms to control prices.

A. Competitive favoritism
B. Industry tightening
C. Slacking
D. Price fixing

Labor, materials, and energy are typically __________ costs.

A. fixed
B. incidental
C. variable
D. inelastic

tor � D 3 �D pC e

4. IT specialist

The practice of becoming the largest purchaser of products from a given supplier is an example of:

2. Growth strategies

3. Differentiation

4. Locking in the supplier

Continuous speech recognition systems:

1. Compare speech patterns to a dictionary

Allow a computer to understand a few words from a voice it has never heard before

3. Require users to pause between each spoken word

4. Recognize conversationally paced speech

Smart card technology:
1. Allows debit cards to store a cash balance on a card and electronically transfer some of it to others to pay for items and services
2. Is not yet available in the United States
3. Is commonly used by banks to read and process checks
4. All of the choices are correct.

The second generation of computers relied on _______________.
1. miniaturized circuits
2. transistors
3. vacuum tubes
4. punch cards

Data are processed and stored in a computer system through the presence or absence of electronic or magnetic signals to the computer. This is called a “binary” representation of data, because the computer and the media can exhibit only _______________ states or conditions.
1. two
2. three
3. five
4. ten

*****************************************************************

Multiple Choice
<b
r/>Software is considered the _______________ part of the computer, whereas the hardware is considered the _______________ part.
1. expensive, inexpensive
2. inexpensive, expensive
3. variable, invariable
4. invariable, variable

Presentation graphics have become more powerful in recent years and can now:
1. Calculate formulas for business planning
2. Enable collaboration within teams
3. Organize appointments and calendars
4. Prepare graphics and presentations for transfer to Web sites in HTML format

According to the text, e-mail:
1. Is a fad that will soon disappear
2. Will be replaced by instant messaging
3. Works best in cloud computing
4. Has changed the way people work and communicate

Which of the following are considered application software packages?
1. Word processing programs
2. Operating systems
3. System utilities
4. System development programs

Which of the following statements is applicable to the Java programming language?
1. It is a page description language that creates hypertext or hypermedia documents
2. It inserts control codes within a document that create links to other parts of the document or to other documents anywhere on the World Wide Web
3. It embeds control codes in the ASCII text of a document, which designates titles, headings, graphics, and multimedia components, as well as hyperlinks within
the document
4. It consists of small application programs called applets that can be executed by any computer and any operating system anywhere in a network

According to the Real World Case, GE spends \$150 million each year to purchase all of its desktop and laptop computers from how many vendors?
1. Two
2. One
3. Ten
4. Nobody is certain

What information system allows the firm to __________. 1. provide a web site that accounts for nearly all their recent growth 2. manage the business and provide outstanding customer support 3. gain recognition and provide credibility to the general public 4. All the choices are correct.

The information systems function is equally as important to business success as the function of _______________. 1. accounting 2. operations management 3. human resources management 4. All the choices are correct.

According to the textbook case, Welch’s uses BI software from Oco to: 1. manage their gasoline usage. 2. decide which products should be produced. 3. ensure that its carriers are shipping full truckloads to customers. 4. follow new competitive trends from its competitors.

All of the following are good examples of information except: 1. The social security number of the company’s forklift operator 2. The retail price of blue widgets 3. How much the company owes to vender number 17 4. The numbers 1236789, 349875, and 340977

According to the Real World case about the New York Times, the newspaper industry is in very deep trouble. What has become most important to them?
2. Internet connectivity
3. Technological innovation
4. Communication initiatives

According to the textbook case, the Oco BI software used by Welch’s:
1. increases the number of deliveries made on Fridays.
2. assures that most deliveries are not made on Fridays.
3. assures that most deliveries are made on Fridays
4. helps them even out the number of delivery trucks used each day of the week.

All of the following are primary business processes, except:
1. Customer relationship management
2. Targeted marketing
3. Technology development
4. Just-in-time warehousing

Tacit knowledge deals with:
1. Data, documents, and things written down or stored on computers.
2. “How-to” knowledge, which resides in workers.
3. Using data mining techniques to capture external information.
4. None of the choices are correct.

The value chain framework can be used to view a firm as a series, a chain, or a network of basic activities that:
1. Add value to its products and services, and thus add a margin of value to the firm.
2. Lower costs along the product development chain.
3. Create the perception of value and goodwill to employees.
4. Create a smooth-flowing chain of events between the supplier and the customer.

A company that places a strategic focus on customer value recognizes that __________, rather than __________, has become a primary determinant in a customer’s perception of value.
1. service, price
2. price, quality
3. quality, service
4. quality, price.

According to the textbook case, innovation in information systems at Universal Orlando comes from thinking like a:
1. Customer
2. Competitor
3. Employee
4. IT specialist

The practice of becoming the largest purchaser of products from a given supplier is an example of:
2. Growth strategies
3. Differentiation
4. Locking in the supplier

Continuous speech recognition systems:
1. Compare speech patterns to a dictionary
Allow a computer to understand a few words from a voice it has never heard before
3. Require users to pause between each spoken word
4. Recognize conversationally paced speech

Smart card technology:
1. Allows debit cards to store a cash balance on a card and electronically transfer some of it to others to pay for items and services
2. Is not yet available in the United States
3. Is commonly used by banks to read and process checks
4. All of the choices are correct.

The second generation of computers relied on _______________.
1. miniaturized circuits
2. transistors
3. vacuum tubes
4. punch cards

Data are processed and stored in a computer system through the presence or absence of electronic or magnetic signals to the computer. This is called a “binary” representation of data, because the computer and the media can exhibit only _______________ states or conditions.
1. two
2. three
3. five
4. ten

Which of the following would perform the required mathematical and logic operations of a central processing unit (CPU)?
1. Control unit
2. Arithmetic-logic unit
3. RAID unit
4. Fuzzy logic unit

Speaker dependent voice recognition systems:
1. Compare speech patterns to a dictionary
2. Allow a computer to understand a few words from a voice it has never heard before
3. Require users to pause between each spoken word
4. All of the choices are correct.
<br
/>Software is considered the _______________ part of the computer, whereas the hardware is considered the _______________ part.
1. expensive, inexpensive
2. inexpensive, expensive
3. variable, invariable
4. invariable, variable

Presentation graphics have become more powerful in recent years and can now:

1. Calculate formulas for business planning
2. Enable collaboration within teams
3. Organize appointments and calendars
4. Prepare graphics and presentations for transfer to Web sites in HTML format

According to the text, e-mail:
1. Is a fad that will soon disappear
2. Will be replaced by instant messaging
3. Works best in cloud computing
4. Has changed the way people work and communicate

Which of the following are considered application software packages?
1. Word processing programs
2. Operating systems
3. System utilities
4. System development programs

Which of the following statements is applicable to the Java programming language?
1. It is a page description language that creates hypertext or hypermedia documents
2. It inserts control codes within a document that create links to other parts of the document or to other documents anywhere on the World Wide Web
3. It embeds control codes in the ASCII text of a document, which designates titles, headings, graphics, and multimedia components, as well as hyperlinks within
the document
4. It consists of small application programs called applets that can be executed by any computer and any operating system anywhere in a network

According to the Real World Case, GE spends \$150 million each year to purchase all of its desktop and laptop computers from how many vendors?
1. Two
2. One
3. Ten
4. Nobody is certain

What information system allows the firm to __________. 1. provide a web site that accounts for nearly all their recent growth 2. manage the business and provide outstanding customer support 3. gain recognition and provide credibility to the general public 4. All the choices are correct.

The information systems function is equally as important to business success as the function of _______________. 1. accounting 2. operations management 3. human resources management 4. All the choices are correct.

According to the textbook case, Welch’s uses BI software from Oco to: 1. manage their gasoline usage. 2. decide which products should be produced. 3. ensure that its carriers are shipping full truckloads to customers. 4. follow new competitive trends from its competitors.

All of the following are good examples of information except: 1. The social security number of the company’s forklift operator 2. The retail price of blue widgets 3. How much the company owes to vender number 17 4. The numbers 1236789, 349875, and 340977

According to the Real World case about the New York Times, the newspaper industry is in very deep trouble. What has become most important to them?
2. Internet connectivity
3. Technological innovation
4. Communication initiatives

According to the textbook case, the Oco BI software used by Welch’s:
1. increases the number of deliveries made on Fridays.
2. assures that most deliveries are not made on Fridays.
3. assures that most deliveries are made on Fridays
4. helps them even out the number of delivery trucks used each day of the week.

All of the following are primary business processes, except:
1. Customer relationship management
2. Targeted marketing
3. Technology development
4. Just-in-time warehousing

Tacit knowledge deals with:
1. Data, documents, and things written down or stored on computers.
2. “How-to” knowledge, which resides in workers.
3. Using data mining techniques to capture external information.
4. None of the choices are correct.

The value chain framework can be used to view a firm as a series, a chain, or a network of basic activities that:
1. Add value to its products and services, and thus add a margin of value to the firm.
2. Lower costs along the product development chain.
3. Create the perception of value and goodwill to employees.
4. Create a smooth-flowing chain of events between the supplier and the customer.

A company that places a strategic focus on customer value recognizes that __________, rather than __________, has become a primary determinant in a customer’s perception of value.
1. service, price
2. price, quality
3. quality, service
4. quality, price.

According to the textbook case, innovation in information systems at Universal Orlando comes from thinking like a:
1. Customer
2. Competitor
3. Employee
4. IT specialist

The practice of becoming the largest purchaser of products from a given supplier is an example of:
2. Growth strategies
3. Differentiation
4. Locking in the supplier

Continuous speech recognition systems:
1. Compare speech patterns to a dictionary
Allow a computer to understand a few words from a voice it has never heard before
3. Require users to pause between each spoken word
4. Recognize conversationally paced speech

Smart card technology:
1. Allows debit cards to store a cash balance on a card and electronically transfer some of it to others to pay for items and services
2. Is not yet available in the United States
3. Is commonly used by banks to read and process checks
4. All of the choices are correct.

The second generation of computers relied on _______________.
1. miniaturized circuits
2. transistors
3. vacuum tubes
4. punch cards

Data are processed and stored in a computer system through the presence or absence of electronic or magnetic signals to the computer. This is called a “binary” representation of data, because the computer and the media can exhibit only _______________ states or conditions.
1. two
2. three
3. five
4. ten

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Multiple Choice

Which of the following statements is true regarding res ipsa loquitur?
A         It is not very well received by modern courts.
B         It does not permit the drawing of an inference.
C         It is a form of circumstantial evidence to aid plaintiff in establish
ing unreasonable conduct.

D         It is most important in cases where the defendant is unable to present evidence of an affirmative defense to negligence.

Based on your reading of the of the Giles v. City of New Haven case, which of the following best addresses the issue of exclusive control in res ipsa loquitur cases?
A         It is never enough that the defendant has merely the right or power of control and the opportunity to exercise it.
B         The growing trend is not to apply the control condition as a fixed, mechanical and rigid rule.
C         It is not enough that defendant is under a duty which he cannot delegate to another.
D         According to the Restatement (Second) of Torts § 328D, if the jury could reasonably find the absence of complete control by defendant, the trial court must not allow the jury to draw and inference that defendant was more than likely responsible for the incident than someone else.

Regarding res ipsa loquitur in exploding bottle cases, under California law, which of the following statements is true?
A         Since the bottler cannot be shown to be in exclusive control at the time of injury, res ipsa loquitur cannot be used to show the bottlers liability.
B         Since a grocer or a customer might well have dropped the bottle, it cannot be shown that the negligence was likely to occur under the control of the bottler and thus res ipsa loquitur cannot be used to show the bottlers liability.
C         Plaintiff will not be able to show fault was attributed to defendant merely by excluding other causes.
D         Plaintiff could use res ipsa loquitur by showing that defendant had control at the time of probable negligence.

Regarding multiple defendants in res ipsa loquitur case, which of the following statements is true?
A         Plaintiff will have a better chance of establishing a res ipsa case if simultaneous control of the relevant instrumentality by two or more defendants is established rather than if consecutive control of the relevant instrumentality is established.
B         If only one of two defendants controlled the instrumentality at the time of injury, the claim of res ipsa loquitur will always fail.
C         Where two parties are driving different cars and those cars collide causing injury to each party, generally res ipsa loquitur can be used by both parties.
D         Where two parties share responsibility for a dangerous activity and an accident happens where one of the two was negligent, it is improper to impose res ipsa loquitur on both parties.

Regarding procedural incidents and effects of res ipsa loquitur, which of the following statements is true?
A         There can never be a case so strong that the inference of negligence created by res ipsa loquitur becomes mandatory such that the trial judge must grant summary judgment in favor of plaintiff.
B         The basic application of res ipsa loquitur is that the case will be given to the jury and then it will be up to the jury to finally determine if there was negligence.
C         Only a few courts hold that res ipsa loquitur creates a permissible inference of negligence.
D         In most states, the jury instruction on res ipsa loquitur informs the jury that if they find the existence of the elements of this doctrine, they must find negligence.

Which of the following is not an element of res ipsa loquitur?
A         That the accident that produced plaintiffs injury was one that ordinarily does not happen in the absence of negligence.
B         That the instrumentality that caused the accident was under the exclusive control of defendant.
C         That the defendant was probably not negligent.
D         That plaintiff was probably not negligent

Which of the following statements is not true regarding whether negligence is more probable than not in res ipsa loquitur cases?
A         In determining the probabilities that the defendant was somehow negligent, judges must not draw on their own common experiences in life rather they should draw solely on actual data.
B         In rear-end collision cases, some courts hold that proof that plaintiffs car was rear-ended is not sufficient to permit an inference that defendant who has driven into plaintiffs forward car was negligent.
C         In some cases, judges believe juries lack sufficient knowledge or experience to conclude that negligence was more probable than not.
D         This is rarely decided by the jury.

Based upon the reading of the of the Warren v. Jefferies case, which of the following is a valid reason why the doctrine of res ipsa loquitur did not apply?
A         Because the jury didnt believe the childrens testimony.
B         Because the jury rejected the inference created by the res ipsa loquitur doctrine.
C         Because there was no evidence of the condition of the brakes.
D         Because the plaintiff failed to prove that defendant was negligent.

Which of the following statements is true regarding whether negligence is more probable than not in res ipsa loquitur cases?
A         If experts for the defendant offer conflicting opinions regarding the cause of the injury res ipsa loquitur will not be applied.
B         Most courts place the burden on the defendant to prove that negligence is less probable than not rather than on plaintiff to prove it was more probable than not.
C         For res ipsa loquitur to apply a court may require the plaintiff to sufficiently exclude the inference of the responsibility of others besides defendant in causing an accident.
D         Almost all courts rule that res ipsa loquitur cannot be invoked unless the defendant has superior knowledge of the injury causing accident or events.

Which of the following statement is true regarding res ipsa loquitur?
A         The more modern approach does not allow a plaintiff to introduce proof of defendants particular negligence while simultaneously relying on res ipsa loquitur.
B         If the plaintiff relies on res ipsa loquitur and defendant comes forward with an explanation that the accident was caused by something other than defendants negligence, the jury must then decide for the defendant.
C         In most courts, plaintiff has been allowed to introduce into evidence safety manuals written by private organizations to show that defendant, in failing to follow such manuals, fell below the standard of reasonable care.
D         The doctrine does not apply when there is direct evidence as to the precise cause of the injury and all of the facts and circumstances attending the occurrence of that injury.

According to State v. McVey, the diminished capacity defense serves as a defense to what type of crime?
A         Those crimes requiring specific intent as an essential element of the offense.
B         Those crimes requiring malice as an essential element of the offense.
C         Those crimes requiring recklessness as an essential element of the offense. pan>
D         Any crime requiring guilty knowledge as an essential element of the offense.
It is commonly held that:
A         Voluntary intoxication is no defense to any crime
B         Voluntary intoxication is no defense where the offense is of the general intent type but it may be properly asserted if the crime requires a specific intent.
C         Voluntary intoxication may be asserted to negate the mens rea component of any crime.
D         Due Process requires that defendant be permitted to introduce evidence of voluntary intoxication when charged with any crime.

Which of the following cases holds that involuntary intoxication can be an absolute defense if as a result of the intoxication the defendant is rendered legally insane at the time of the commission of the act?
A         CITY OF MINNEAPOLIS v. ALTIMUS, 306 Minn. 462, 238 N.W.2d 851.(1976)
B         MONTANA v. EGELHOFF, 518 U.S. 37, 116 S.Ct. 2013, 135 L.Ed.2d 361
C         STATE v. Q.D., 102 Wash.2d 19, 685 P.2d 557 (1984)
D         PEOPLE v. WALKER, 33 Ill.App.3d 681, 338 N.E.2d 449 (1975)

Involuntary Intoxication includes several different kinds of intoxication. These include:
A         Coerced intoxication.
B         Pathological intoxication.
C         Intoxication by innocent mistake.
D         All of the above.

A defendant in a criminal case, at the time he engaged in the conduct giving rise to the charges against him, may have been suffering from an abnormal mental condition that was not of a kind or character to afford him a successful insanity defense. In such a case, his mental condition:
A         Is irrelevant and no evidence of it may be presented.
B         Can be relevant to a mental state that is an element of the specific offense with which he is charged and evidence of mental condition must in such cases, therefore, be admitted.
C         Can be relevant to a mental state that is an element of the specific offense, but, nonetheless, evidence of mental condition may not be admissible for some such specific offenses.
D         Is relevant generally and evidence of mental condition must be permitted in all cases.

The majority of the courts that have held that evidence of mental condition not amounting to insanity is admissible have done so to allow a defendant to negate:
A         Premeditation or deliberation required for conviction of first degree murder.
B         Malice required for a conviction of murder of any degree.
C         Knowing or consciousness required for proof of murder or manslaughter.
D         The mens rea requirement for any crime.

If defendant formed the intention to commit a crime, and then drinks in order to gain the nerve to commit the crime and or to prepare himself for the defense of intoxication, then
A         The defendant can claim the defense of intoxication if at the time the crime is committed he has become too intoxicated to form the requisite intent.
B         The defendant cannot claim the defense of intoxication even if at the time the crime is committed he has become too intoxicated to form the requisite intent.
C         The defendant can claim the defense of intoxication if the result of any tests to determine blood alcohol or other intoxicant levels is above the legal limits at the time the crime is committed.
D         The defendant cannot claim the defense of intoxication unless at the time the crime is committed he has become too intoxicated to form the requisite intent.

The rule in the majority of cases in America regarding a defendant charged with a crime requiring the mental state of recklessness  an awareness of risk his conduct creates- but who is so intoxicated at the time of his conduct as to be unaware of the risk is:
A         If the only reason why the defendant did not realize the risk is that he was too intoxicated he is guilty of recklessness.
B         If the only reason why the defendant did not realize the risk is that he was too intoxicated he is not guilty of recklessness.
C         If the only reason why the defendant did not realize the risk is that he was too intoxicated he is guilty only of criminal negligence
D         If the only reason why the defendant did not realize the risk is that he was too intoxicated he is guilty only upon proof that he had actual knowledge of the consequences to him of excessive drinking

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Multiple Choice

1. The specific setting within which organizational behavior is enacted would be called the:
situation
external environment
organizational context
group

2. The Hawthorne studies uncovered the importance of:
the workflow and scheduling of work for production efficiency
delegating authority downward and throughout the organization
the informal organization and its impact on productivity
viewing an organization as clockworks

3. Which of the following statements is most correct with respect to total quality management?
Quality control is the responsibility of specialists who randomly perform quality checks on items as they leave the assembly line.
Quality is a customer-oriented philosophy with important implications for virtually all aspects of organizational behavior.
Quality is an employee-oriented philosophy required by quality engineers.
Quality is machine driven with quality improvements resulting from use of robotic equipment.

4. Developing skills is different from acquiring objective knowledge because it requires:
empirical testing
induction
deduction
structured practice and feedback

5. Many U.S. and Canadian firms have located manufacturing plants in Mexico to take advantage of lower labor costs. Additionally, many tariffs on U.S. exports have been reduced. These global changes occurred because of:
the European union
GATT agreements
NAFTA
Perestroika

6. Gifts are not usually a requirement in business dealings, though presenting a small gift will generally be appreciated as a gesture of goodwill in which of the following cultures?
Mexico
Japan
Saudi Arabia

7. While the globalization of business affects all parts of the organization, which area of the organization is particularly affected?
marketing
operations
MIS
human resources

8. An individual’s generalized belief about internal control versus external control is called:
self-efficacy
self-esteem
locus of control
self-monitoring

<span
>9. When predicting behavior, an important idea to remember concerns the extent to which a situation overwhelms the effects of individual personalities by providing cues for appropriate behavior. This type of situation is called a:
weak situation
weak individual difference
strong individual difference
strong situation

10. The traits associated with high-performing employees are:
extraversion and agreeableness
agreeableness and conscientiousness
conscientiousness and emotional stability
emotional stability and agreeableness

11. Employee loyalty toward the organization is a significant factor in:
job displacement
continuance commitment
affective commitment
employee turnover

12. When an employee remains with a firm because he or she faces significant exit barriers, this can be characterized as:
organizational citizenship
withdrawal syndrome
continuance commitment
dysfunctional attachment

13. When one’s attitudes and required job behavior conflict, __________ may develop.
affect
attitude consonance
behavioral tendency
cognitive dissonance

14. The proposition that a person’s life was founded on the compulsion to work and the power of love is known as:
the Protestant ethic
psychodynamic theory
motivation
the Calvinistic perspective

15. McGregor believed that Theory X assumptions were appropriate for:
individuals located at the top of the organization
employees located at the lower level of the organization
individuals motivated by lower order needs
individuals motivated by higher order needs

16. Eustress most accurately reflects:
the notion that each individual is responsible for managing acceptable levels of stress
each individual has different levels of stress that they can effectively manage
the positive side of stress which is healthy and normal
the negative side of stress and its impact on health

17. The close linkage of _____ to performance under expectancy theory is crucial for enhancing motivation.
knowledge and skill
rewards
equity
satisfaction

18. The study of fit between person (employee) and machine is:
performance appraisal
job design
operant conditioning
ergonomics

19. The fight-or-flight stress response is most closely associated with which approach to stress?
homeostatic
cognitive appraisal
person-environment fit
psychoanalytic

20. As a supervisor, you can enhance the performance of your employees by:
setting their goals
closely controlling their behavior
allowing employees to participate in goal setting
giving workers easy goals

21. Role ambiguity is:
the difficulty stemming from a situation where expectations of two roles conflict
conflicting expectations within a single role
the difficulty a person has in reconciling job demands and personal values
the confusion one experiences related to the expectations of others

22. A communication medium that is moderate in both information richness and data capacity is:
the telephone
electronic mail
face-to-face discussion
formal numeric report

23. The element of the communication model that contains the thoughts and feelings the communicator is attempting to elicit in the receiver is the:
data
feedback
message
information

24. A barrier to effective communication is:
redundancy
feedback
status difference
common language

25. The evoking of a shared or common meaning in another person is called:
interpersonal communication
communication
a response pattern
the message