'Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse.' (no replies)        
'..America's pension crisis is a big part of the $400 trillion pension time bomb threatening the global economy and it is deflationary and bond friendly.'

- Leo Kolivakis, America's Corporate Pension Disaster? August 4, 2017


'In order for the Maestro to be right, US inflation expectations have to pick up in a significant way. This won't happen and to understand why, read Gary Shilling's recent comment on three things central bankers don't get about wages.'

- Leo Kolivakis, Is the Maestro Wrong on Bonds? August 2, 2017


'Very recent data confirms slumping household saving ratios in both the US and UK. This was last seen in 2007, just before the bursting debt bubble blew the global economy and financial system to smithereens. The Fed and BoE should surely hang their heads in shame having presided over yet another impending disaster. Why will politicians and the people tolerate this incompetence? Indeed they won’t.'

- Albert (Shades of 2008: UK and US Savings Rate Plunges, Debt Comes Full Circle, August 3, 2017)


'It’s no mystery why central bankers are mystified: Collectively, they are economically illiterate fools engaged in Keynesian and Monetarist group think.

..

On deck is another round of destructive asset price deflation, brought about by Central banks who cannot see the obvious.'

- Mike “Mish” Shedlock, Central Banks Puzzled as Global Inflation Hits Lowest Level Since 2009: Solving the Puzzle, August 3, 2017


'..history and logic both show that concerns over consumer price deflation are seriously misplaced.

Worse yet, in their attempts to fight routine consumer price deflation, central bankers create very destructive asset bubbles that eventually collapse, setting off what they should fear – asset bubble deflations following a buildup of bank credit on inflated assets.'

- Mike “Mish” Shedlock, Historical Perspective on CPI Deflations: How Damaging are They? March 30, 2015


'BIS Deflation Study

The BIS did a historical study and found routine deflation was not any problem at all.

“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the study.

It’s asset bubble deflation that is damaging. When asset bubbles burst, debt deflation results.

Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse.'

- Mike “Mish” Shedlock, How Twisted Minds Function, August 2, 2017


Context

'..If you can’t see this next crisis coming, you’re not paying the right kind of attention .. Financial politicians..'

'..the Next 30 Years: “Everything is Deflationary”..'

'..a 30-year bear market..'

          '..the amount of leverage and excess that has accumulated in bond and Credit markets..' (no replies)        
'..the amount of leverage and excess that has accumulated in bond and Credit markets over the past eight years of extreme monetary stimulus.'

'The Fed is not blind. They monitor stock prices and corporate debt issuance; they see residential and commercial real estate market values. Years of ultra-low rates have inflated Bubbles throughout commercial real estate – anything providing a yield – in excess of those going into 2008. Upper-end residential prices are significantly stretched across the country, also surpassing 2007. They see Silicon Valley and a Tech Bubble 2.0, with myriad excesses that in many respects put 1999 to shame. I’ll assume that the Fed is concerned with the amount of leverage and excess that has accumulated in bond and Credit markets over the past eight years of extreme monetary stimulus.

..

The Fed collapsed fed funds from 6.50% in December 2000 to an extraordinarily low 1.75% by the end of 2001. In the face of an escalating corporate debt crisis, the Fed took the unusual step of cutting rates another 50 bps in November 2002. Alarmingly, corporate Credit was failing to respond to traditional monetary policy measures (despite being aggressively applied). Ford in particular faced severe funding issues, though the entire corporate debt market was confronting liquidity issues. Recall that the S&P500 dropped 23.4% in 2002. The small caps lost 21.6%. The Nasdaq 100 (NDX) sank 37.6%, falling to 795 (having collapsed from a March 2000 high of 4,816). No financial instability?

..

I revisit history in an attempt at distinguishing reality from misperceptions. Of course the Fed will generally dismiss the consequences of Bubbles. They’re not going to aggressively embark on reflationary policies while espousing the dangers of asset price and speculative Bubbles. Instead, they have painted the “housing Bubble” as some egregious debt mountain aberration. And paraphrasing Kashkari, since today’s stock market has nowhere as much debt as housing had in 2007, there’s little to worry about from a crisis and financial instability perspective.

Well, if only that were the case. Debt is a critical issue, and there’s a whole lot more of it than back in 2008. Yet when it comes to fragility and financial crises, market misperceptions and distortions play fundamental roles. And there’s a reason why each bursting Bubble and resulting policy-induced reflation ensures a more precarious Bubble: Not only does the amount of debt continue to inflate, each increasingly intrusive policy response elicits a greater distorting impact on market perceptions.

I doubt Fed governor Bernanke actually anticipated that the Fed would have to resort to “helicopter money” and the “government printing press” when he introduced such extreme measures in his 2002 speeches. Yet seeing that the Fed was willing to push its monetary experiment in such a radical direction played a momentous role in reversing the 2002 corporate debt crisis, in the process stoking the fledgling mortgage finance Bubble. And the Bernanke Fed surely thought at the time that doubling its balance sheet during the 2008/09 crisis was a one-time response to a once-in-a-lifetime financial dislocation. I’ll assume they were sincere with their 2011 “exit strategy,” yet only a few short years later they’d again double the size of their holdings.

..

Despite assertions to the contrary, the bursting of the “tech” Bubble unleashed significant financial instability. To orchestrate reflation, the Fed marshaled a major rate collapse, which worked to stoke already robust mortgage Credit growth. The collapse in telecom debt, an unwind of market-based speculative leverage and the rapid slowdown in corporate borrowings was over time more than offset by a rapid expansion in housing debt and the enormous growth in mortgage-related speculative leverage (MBS, ABS, derivatives).

..

I’ve never felt comfortable that Chinese authorities appreciate the types of risks that have been mounting beneath the surface of their massively expanding Credit system. Global markets seemed attentive a year ago, but have since been swept away by the notion of the all-powerful “China put” conjoining with the steadfast “Fed put.” These types of market perceptions create tremendous inherent fragility.'

- Doug Noland, Discussions on the Fed Put, March 25, 2017


'It’s now an all-too-familiar Bubble Dynamic. The greater the Bubble inflates, the more impervious it becomes to cautious “tightening” measures..'

'The problem today is that years of ultra-loose monetary conditions have ensured everyone is crowded on the same bullish side of the boat. Tipping the vessel at this point will be chaotic, and the Fed clearly doesn’t want to be the instigator. Meanwhile, timid little baby-step increases only ensure more problematic market Bubbles and general financial excess.

It’s now an all-too-familiar Bubble Dynamic. The greater the Bubble inflates, the more impervious it becomes to cautious “tightening” measures. And the longer the accommodative backdrop fuels only more precarious Bubble Dynamics, the more certain it becomes that central bankers will approach monetary tightening timidly. Yellen confirmed to the markets Wednesday that the Fed would remain timid – still focused on some theoretical “neutral rate” and seemingly oblivious to conspicuous financial market excess. The fixation remains on consumer prices that are running just a tad under its 2% target. Meanwhile, runaway securities market inflation is completely disregarded.'

- Doug Noland, Another Missed Opportunity, March 18, 2017


'..In terms of Credit Bubble momentum, it’s notable that Net Worth inflated over $2.0 TN in both Q3 and Q4.'

'The unprecedented amount of system-wide debt is so enormous that the annual percentage gains no longer appear as alarming. Non-Financial Debt expanded 4.7% in 2016, up from 2015’s 4.4%. Total Household Debt expanded 3.6%, with Total Business borrowings up 5.6%. Financial Sector borrowings expanded 2.9% last year, the strongest expansion since 2008.

Securities markets remain the centerpiece of this long reflationary cycle. Total (debt and equities) Securities jumped $1.50 TN during Q4 to a record $80.344 TN, with a one-year rise of $4.80 TN. As a percentage of GDP, Total Securities increased to 426% from the year ago 415%. For comparison, Total Securities peaked at $55.3 TN during Q3 2007, or 379% of GDP. At the previous Q1 2000 cycle peak, Total Securities had reached $36.0 TN, or 359% of GDP.

The Household Balance Sheet also rather conspicuously illuminates Bubble Dynamics. Household Assets surged $6.0 TN during 2016 to a record $107.91 TN ($9.74 TN 2-yr gain). This compares to the peak Q3 2007 level of $81.9 TN and $70.0 TN to end 2008. Q4 alone saw Household Assets inflate $2.192 TN, with Financial Assets up $1.589 TN and real estate gaining $557bn.

With Household Liabilities increasing $473bn over the past year, Household Net Worth (assets minus liabilities) inflated a notable $5.518 TN in 2016 to a record $92.805 TN. As a percentage of GDP, Net Worth rose to a record 492%. For comparison, Household Net Worth-to-GDP ended 1999 at 435% ($43.1 TN) and 2007 at 453% ($66.5 TN). Net Worth fell to a cycle low 378% of GDP ($54.4TN) in Q1 2009. In terms of Credit Bubble momentum, it’s notable that Net Worth inflated over $2.0 TN in both Q3 and Q4.

..

UBS analysts forecast (above) $3.3 TN of 2017 Chinese Total Social Financing (TSF). And with TSF excluding national government deficit spending, let’s add another $300bn and presume 2017 Chinese system Credit growth of around $3.6 TN. As such, it’s possible that China and the U.S. could combine for Credit growth approaching an Unparalleled $6.0 TN. There are, as well, indications of an uptick in lending in the euro zone, and Credit conditions for the most part remain loose throughout EM. Importantly, the inflationary biases that have gained momentum in asset and securities markets and, increasingly, in consumer prices and corporate profits provide a tailwind for Credit expansion.'

- Doug Noland, Unparalleled Credit and Global Yields, March 10, 2017


Context

'..the S&P 500 is now far more overvalued than in 2000, 2007, or indeed in any prior point in history..'

          (Banking Reform - Monetary Reform) - '..debt is our biggest security threat..' (no replies)        
'Now that he is president, Trump likes to tout the fact he’s listening to America’s generals. Perhaps he needs to talk to General Mike Millen, the former Chairman of the Joint Chiefs of Staff. Perhaps then he would see that the greatest threat America faces isn’t from China, Russia, or North Korea – it is from the national debt. Until Trump reverses course on military spending, and gets tough on entitlements, his "America First" budget will only make the US worse off.'

- Tho Bishop (Source, March 20, 2017)


'..a crippling national debt..'

'Under a Republican budget resolution, the national debt will explode by a third from an already staggering $19 billion to $29 trillion over the next ten years. Although counterintuitive, Democratic presidents, at least those after World War II, have reduced deficits as a portion of the value of the national economy (GDP) while Republican presidents have increased them — thus accumulating less public debt as a percentage of GDP. Yet neither political party has paid enough attention to this burgeoning national security problem.

National security problem? Yes. General Mike Mullen, while he was Chairman of the Joint Chiefs of Staff, the nation’s top military man, was enlightened enough about long-term health of American power to realize that it takes continuing infusions of money to acquire the weapons and equipment, personnel, training, maintenance and benefits to create a credible military to adequately defend the country. In addition, all other indices of national power — political, diplomatic and cultural — require money too.

To generate those resources, a strong economy is needed. The number one problem dragging down economic growth rates through the George W. Bush and Barack Obama presidencies was a crippling national debt..'

- Ivan Eland, National debt is our biggest security threat: Column, January 11, 2017


Context

'..World Debt Hits $152 Trillion.'

'Our nation and the world are paying a very heavy price for a failed experiment in Inflationism..' - Doug Noland

'..Global policies since the 2008 crisis have spurred the expansion of speculative finance to multiples of pre-crisis levels..'


'Germany Plans to Cut 2017 Debt Sales .. Balanced-Budget..'

'..monetary knowledge .. of currency reform under difficult conditions you have to go to Carl Menger.'

(Banking Reform - Monetary Reform) - '..The Theory of Money and Credit .. an invaluable guide for ending the business cycles of our own time.'


(Banking Reform - English/Dutch) '..a truly stable financial and monetary system for the twenty-first century..'

          EverBank Icelandic krona 13.10% APY 3-Month CD        
Empty Spaces Inc. said...

have you looked into everbank.com's icelandic CD? it pay ~10%

EverBank offers a 13.10% APY 3-Month Icelandic krona CD. The yield looks very attractive so I did some research on this CD. The CD is FDIC-insured. And the reason why the yield is so high is because Iceland is combating inflation and the banks are offering high-yield CDs to combat inflation. So what's the big catch on this CD? I found out that you can lose on principal in the CD, because the krona currency fluctuates. Also, there's a exchange rate fee. The conversion fee is three quarters of a percent (0.0075%) for CDs less than $100,000. The way it works is that your US Dollars get converted to Icelandic kronas and then at maturity if you decide to withdraw, the kronas will be converted back to US Dollars. The exchange rate then could be different from the start of the CD. Does any one has experience with Icelandic CDs? Do you think it is low risk? Are they are other catches I am missing?
          Rohstoffe als Geldanlage        
Anleger, die an einem langfristigen Kapitalerhalt interessiert sind und gleichzeitig ein geringes Risiko eingehen wollen, können seit jeher auch in Rohstoffe investieren. Die Möglichkeiten sind vielfältig. Um sich vor Währungscrashs und Inflation zu schützen, kann man in Edelmetalle, Land oder andere Rohstoffe investieren. Gold galt schon immer und in allen Ländern der Welt als sicheres […]
          In Defense of Economic Noninterventionism         

A recent Wall Street Journal article has surprisingly good news: US companies are seeing the highest profit growth in two years with “two consecutive quarters of double-digit profit growth for the first time since 2011.” This surprisingly comes not from policies pursued in Washington, but the hard work of the private sector.

The fact that businesses and job creators can make such a phenomenal showing after years of regulatory uncertainty and continued political intervention reminds us of the power of the free market and that the best successes come from the work of the individuals, not collectivists in the public sector.

Perhaps the best reminding of what the last eight years brought us was President Obama’s infamous 2012 campaign speech “If you've got a business, you didn't build that.” Throughout the course of his administration saw a creation of routine legislative and executive actions that were designed to both micromanage business and supposedly “create” jobs. Unfortunately, none of this had the intended success.

Most prominently among the actions from the executive administration while Obama was presidents include significantly increased regulations. Among these have included the Waters of the United States Rule (WOTUS), Dodd-Frank, the stimulus package, and, most spectacularly of all, Obamacare. All of these added a large interventions and onerous barriers in the economy that failed to achieve their stated goal.

WOTUS was probably one of the greatest power grabs by the EPA in recent history. The rule essentially sought to define “navigable waters” in the clean water Act which “brought nearly half of Alaska and a total area in the lower 48 states equivalent to the size of California under the CWA’s jurisdiction.” The proposal, had it not been blocked and rescinded, would have cost thousands of dollars for permits on land that was not previously under the EPA’s jurisdiction, delayed production since a permit can take up to months, and this would have resulted in reduced development and production as well as higher prices.

Though the WOTUS rule was not fully implemented, regulations that did have a massive negative impact on the economy include the Dodd–Frank Wall Street Reform and Consumer Protection Act.

As implemented, Dodd-Frank imposed various new regulations on the financial sector, including creating the Consumer Financial Protection Bureau (CFPB), designated firms as systemically important financial institutions (SIFIs), and instituted price controls on debit and credit card transactions. The result was a climate of over regulation with banks being incentivized to become as large as possible in the hopes of being bailed out while the CFPB became a revolving door for lobbyists and influence peddlers to regulate the market with little to no oversight.

Unsurprisingly, one fifth of the banks in the U.S. banks, totalling 1,708, went under between the law’s creation and 2016, which is about one per day, and by 2015 five large banks controlled 50 percent of the banking industry.

Outside of simple regulation, there was also so called “jobs creations” programs that were supposed to create jobs the President did not think businesses could such as the stimulus package. The program was sold as a job creation plan that would keep unemployment below 8 percent for the low price of $830 billion.

The next four years were marked by above 8 percent unemployment while the money ended up being wasted on worthless projects, including trees in wealthy neighborhoods, a study of erectile dysfunction, and the failed company solyndra which was run by a bundler for the Obama campaign. To make matters worse, though unemployment eventually went down long after the stimulus’s implementation, the labor participation rate reached its lowest in 38 years which shows that people still weren’t working.

However, the crowned jewel of overregulation and job destruction during the Obama administration was ObamaCare. Implemented to expand health insurance coverage, it has repeatedly failed to reach its goals as premiums went up, enrollment failed to reach its projections, and the legislation gave corporate welfare (including promised bailouts) to the insurance lobby. In the end, most of the coops failed and major companies pulled out of the exchanges, resulting in 1,000 counties, including five whole states, only having one insurer, a major failure in the goal of expanded coverage.

Inevitably, the phenomenal intervention in the economy by President Obama failed to achieve the job creation while it instead made made doing business that much harder. With record breaking numbers of regulations, Obama was the first President since the Great Depression to never see 3 percent GDP growth.

The Trump administration in the meantime has pursued a different approach than its predecessor. The Trump administration has seen sixteen regulations cut for every one it has created, had signed four resolutions of disapproval under the Congressional Review Act to overturn regulation within two months as President, and rolled back the clean power plan which could have cost $40 billion per year. All of this marks a significant change in policy that will greatly open up business opportunities and expand economic growth.

However, policy alone does not explain why there has been high profit growth for the last two quarters. As the Wall Street Journal article admits, health care legislation and tax reform have been stalled in the senate. This has caused a climate of uncertainty which businesses have not been happy with.

Nevertheless, they have instead moved on from Washington and instead remained focused on doing business. Political events seem to have taken a backseat to actual business as the number of S&P 500 companies have mentioned the President or his administration during conferences is down by a third as the research firm Sentieo found out. To be blunt, the involvement of Washington and government policy is not driving the current profit growth and the lack of involvement may actually be increasing it.

For a better example of how reduced involvement can improve the economy, look no further than the Depression of 1920. At the time, war time debt had exploded, unemployment peaked at 11.7 percent in 1921, and inflation rates jumped above twenty percent. It had the potential to be even more catastrophic than the Great Depression that started in 1929.

However, the policies pursued were entirely different. The federal budget was severely reduced from $18.5 billion in FY 1919 to $3.3 billion for FY 1922. Taxes at the same time were cut by about 40 percent.

As a result, unemployment dropped to 2.3 percent by 1923 and a crisis had been averted. This was accomplished not by bailouts and and overregulation but by getting the government entirely out of the way. This is a radically different approach than was pursued during the financial panic of 2008 or even the Great Depression.

Overall, there has been a repeated belief that government involvement has made economic advancement harder. As was stated by former President Reagan, “Government is not the solution to our problem; government is the problem.” President Kennedy noted the same when he said “Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort — thereby aborting our recoveries and stifling our national growth rate.”

It should come as no surprise then that business are fully prepared to run their own affairs and is best capable to address its own need, for as JP Morgan Chase CEO Jamie Dimon noted, “We’ve been growing at 1.5% to 2%...because the American business sector is powerful and strong and is going to grow regardless.”

It remains the desire of others that the government should intervene in the economy to make improvements. However, this has always resulted in guaranteed failure. Be it raising the minimum wage in Seattle or increased taxation and regulations in Connecticut, the result is usually lackluster growth and decreased jobs. At the national level, Venezuela’s nationalization and China’s increased infrastructure projects have created the same results, which is to say none.

As history and current events have shown time and time again, the best results come not from government involvement and micromanagement, but from the hard work of free individuals in free markets. More and more, the adaptability of businesses to their consumer’s demands and their ability to whether adversity in the marketplace has always been more efficient than the micromanagement the state perceives. As a result, sometimes the best thing to do is to have the government do nothing so that those who can make the economy better will.


          Venezuela is Socialism's Last Nail in the Coffin        

From a so-called “economic miracle” to a human rights disaster, Venezuela has followed in the footsteps of literally every single socialist or communist country ever with its country in complete collapse. Crime is on the rise, the people are starving, protests are going all throughout the country, and unconfirmed rumors are coming out that President Nicolas Maduro is considering leaving.

In the never ending desire to achieve an impossible utopia, Venezuela is living in a nightmare that may serve as the best evidence against government mismanagement.

To be blunt, the people are starving. Roughly 75 percent of the country lost 19 pounds in 2016. This actually coincides with reports that Venezuelans were looking for food in the trash.

It is not just food that Venezuelans seem to be running out of at the moment. The country is lacking medicine, toilet paper, and even goods for religious sacraments as well. All sorts of goods are disappearing from the country faster and faster.

Meanwhile, their economy is in complete shambles. At the start of the year, inflation had hit 800 percent while their GDP had shrunk by 19 percent. To make matters worse, 2016 marked its third year of recession.

Of course, the elite of the country have not seemed to notice the problems their citizens are facing. Accusations fly of the leaders of Venezuela living luxurious lifestyles despite the recession. Unsurprisingly, reports have the daughter of Venezuela’s last President Hugo Chavez at a networth of $4.2 billion.

So the big question is: why is Venezuela falling apart? The simplest answer is government mismanagement as it started taking over the economy. Under the watch of Socialists Hugo Chavez and his successor Nicolas Maduro, the socialist leadership in the country has greatly increased its influence in economic affairs, resulting in decreased investment, business failures, and scarcity.

Over the past decade and a half, the Venezuelan government has nationalized multiple industries, including oil, agriculture, finance, steel, electricity, and telecommunications. Unsurprisingly, this led to significant ruin in the various industries it controlled, especially oil. Case in point, the Chavez regime largely underfunded the investment necessary to bring about increased oil production.

Large portions of oil revenues were transferred to generous social programs but there was lackluster reinvestment to make sure that more oil was produced to keep revenue flowing. As a result, oil production starting dropping consistently after 2007 which saw a major decline in revenue (and helped lead to the debt that caused hyper inflation). Additionally, Chavez demanded more money from oil companies investing in the country and the ones that refused saw their assets seized. With such a clear lack of respect for human rights, it should come as no surprise that foreign investment has been on the decline recently in the country which is also hurting business and revenue.

To make matters worse, many workers were fired and replaced with government loyalists. In one case, a company that had never created an oil well was hired to create several since it had ties to the government. The lack of experienced workers unsurprisingly has also added to the decline of the oil industry that was a huge part of the government’s revenue.

Just about every industry the government has touched has fallen apart. Steel production was reduced by 70 percent after it was nationalized, food production has been on the decline while the government redistributed farmland for the production of food the land was not suited for, and the Venezuelan government is instituting blackouts to reduce consumption to reduce electricity use due to decreased supply. Overall, it seems Venezuela is in the process of running its economy into the ground.

Venezuela has also added newer regulations and laws to improve the economic situation of its country that had the opposite effect. Case in point, the minimum wage was increased recently by 50 percent despite the fact overall wages still decreased by 17 percent. Other reports have increased labor protections actually hurting business while price controls that were implemented to reduce profits and keep prices low also helped to reduce food productions which also helped cause the food crisis. With all this in mind, it should come as no surprise that the number of businesses in Venezuela has gone down from 800,000 in 1998 to 230,000 in 2016, a decline of 570,000.

It is important to remember though that none of this should even be looked at as being done as a love for the people from the state. As was noted by a former education minister, the goal of the people reforms is “‘not to take the people out of poverty so they become middle class and then turn into escuálidos’ (a derogatory term to denote opposition members).” Translation: it’s not for their benefit but to create a dependent class of supporters.

For more evidence of how the government does not care about its people, look no further than its human rights records. The Maduro government has been seizing power by stacking the courts with supportive justices and then met the protests against that with violent crackdowns on dissenters. Meanwhile, accusations of sham elections are now flying in the wake of an election referendum to give him the power to rewrite the country’s constitution. In the end, the increase in power has come to the detriment of the people backed by phony promises.

As is always the case, the promise of helping the people through government intervention completely falls apart. Just like with China and Russia, the result is always economic ruin with the well connected few reaping the benefits. Unfortunately, the US is not free from these mistakes as states like Connecticut or cities like Seattle implementing their own interventions in the economy that results in disaster. If the US wants to head down the path same economic path as Venezuela that leads to destruction and corruption, it will inevitably end there.


          Support the CREATES Act, S. 974 and H.R. 2212        

On behalf of FreedomWorks’ activist community, I urge you to contact your representative and ask him or her to support the Creating and Restoring Equal Access To Equivalent Samples (CREATES) Act, S. 974 and H.R. 2212. This bill would lower prescription drug prices by crushing illegal, anti-competitive, and monopolistic practices by the biggest pharmaceutical companies.

Prescription drug prices have soared above general inflation rates for years, a telltale sign of lacking producer competition. Large moneyed pharmaceutical companies abuse a loophole in the FDA Amendments Act of 2007 that allows them to bar potential competitors from entering the market. They do this by refusing to provide drug samples and safety information that new producers need for medical research required in the FDA approval process of generic drugs.

Without these samples and safety procedures, new producers never earn FDA approval. Meanwhile, existing producers establish monopolies and hike prices.

This especially harms the emerging market for “biosimilars,” innovative remakes of biologic drugs. Biosimilars are often much cheaper to produce than name-brand biologics, reducing costs for millions of Americans.

The CREATES Act would grant relief in court for generic and biosimilar competitors seeking FDA approval. This would clear the pathway for new drugs to enter the market, drastically reducing prices through increased competition. The cost savings stemming from this legislation could reach between 15 percent and 50 percent of current prices for impacted drugs.

Such legislation would reduce both the federal deficit and national debt. Decreasing prescription drug costs would lessen the financial burden on Medicare, saving taxpayers up to $5 billion annually.

As you know, FreedomWorks fights for free markets and smaller government. The CREATES Act would lead to a freer market, less cronyism, and cheaper medication. For these reasons, I urge you to contact your representative and ask him or her to support the CREATES, S. 974 and H.R. 2212.

Sincerely,

Adam Brandon, President, FreedomWorks


          Congress Should Lower Ridiculous Drug Prices by Passing CREATES Act        

Perpetually increasing prescription drug prices ravage everyday Americans. Specifically, name-brand prices outpace inflation by about 50%, largely due to government-protected market power. A beacon of hope for reducing drug prices are the generic and biosimilar drug industries, which produces existing brand drugs and biologics drugs through distinctly cheaper methods. But big Pharma doesn’t want competition, so it does everything it can to block generic and biosimilar innovation. The CREATES Act, H.R. 2212, solves a loophole commonly abused by big pharmaceutical companies for unlawful market advantages in the emerging generics and biosimilars markets.

Existing drug companies exploit the Food and Drug Administration’s (FDA’s) Abbreviated New Drug Application (ANDA) requirements for FDA approval of competitive generic and biosimilar products. This is an unlawful tactic to increase market-power. Biosimilars are a type of biologic drug – drugs manufactured from living cells – that mimic both the composition and the function of an existing biologic drug but employ cheaper production processes. Tragically, established producers prevent aspiring competitors from completing ANDA.

To complete a generic or biosimilar approval process, applicants must acquire sample drugs from existing producers. This allows medical researchers to demonstrate that the functions and properties of the original brand drug and the new generic or biosimilar are, in fact, equivalent. Sadly, many brand companies refuse to provide samples to potential competitors, preventing them from gaining approval. Thus, innovative generics and biosimilars hit the market less frequently, trapping consumers with fewer options and higher prices. While this practice of abusing distribution networks is illegal, there are no enforcement mechanisms preventing it.

Remember the damnable pharmaceutical executive Martin Shkreli, who raised the price of a biologic AIDS drug Daraprim by over 5000% in one night? One of his profit-protection methods was to deny competitor applicants the samples they need to earn FDA approval. Competing with losers like Shkreli would be easy it if weren’t for this loophole. High school chemistry students reproduced Daraprim for less than $2 a pill compared to Shkreli’s $750.

A similar monopolistic scam employed by entrenched pharmaceutical companies involves exploiting shared Risk Evaluation and Mitigation Strategy (REMS) procedures. Producers of existing brand drugs are sometimes required by the FDA to establish safety protocols that protect consumers from safety risks. The FDA encourages companies to share, or streamline, their REMS procedures for maximum safety and congruency among user experiences. If a person taking biologic drug X switches to biosimilar drug X, the shared procedure is supposed to ensure that there are no major differences in how this person safely consumes the drug. In a similar fashion to denying samples, big pharma often refuses to share REMS procedures. When a REMS program has previously been required, FDA cannot approve a generic or biosimilar until a shared REMS has been negotiated or the agency has been given sufficient evidence to waive the requirement. This imposes redundant and costly burdens on biosimilar producers, and ultimately delays market entry for far less expensive but equally safe drugs.

Both of these tactics, refusal to share samples and failure to fairly negotiate shared REMS programs, establish de facto monopolies for original drug producers, but they’re easily fixed by the CREATES Act. Under the CREATES Act, generics and biosimilar manufacturers will be able to seek injunctive relief in court against companies that withhold samples or REMS information. This will improve competition with new generics and biosimilars, reducing prescription drug costs possibly as much as 40%. It will also help sustain Medicare Part D, the national deficit, and debt, by reducing government drug expenses by up to $5 billion per year.

Congress should end illegal monopolies and help Americans afford their medications by passing the CREATES Act, all without increasing the size of government.


          Six of the Best 715        
"In 2197 when the aliens invade but allow humanity to have an election on whether they should be enslaved or not. The Lib Dem leader Sir Menzies Campbell will implore people to reject enslavement and embrace freedom but the hard left will go, 'well you lied about tuition fees so I can’t trust you, now where do we sign up for a stint at the sulphur mines on Rigel IV?'" Neil Monnery on the rabid inflation of tuition fees as a political issue.

Isaac Chotiner says Venezuela is collapsing and asks if a civil war could be next.

Hazel Gaynor looks at the Cottingley Fairies hoax. "When the photographs subsequently came to the attention of novelist Sir Arthur Conan Doyle, the story - like all good fairy tales - grew wings."

The service between Sheffield and Cleethorpes via Gainsborough Central and Brigg has been a nominal one operating on Saturdays only since October 1993. Spatialsynergydave takes the train from Brigg to Gainsborough and back.

Inigo Thomas celebrates the art of the peerless cricket photographer Patrick Eagar.

"Today, for the first time in more than thirty years, it became possible to buy a legitimate new copy of one of the greatest, and most important, albums of all time, Bright Phoebus." Andrew Hickey hails he reissue of the Watersons' album.
          It's getting tough        
Well, this week has been tough for the country, heck even the world. Credit is drying up, markets are in a panic, small businesses are laying off employees in droves. I saw this personally with bank loans this week on a travel trailer I own.

I am not at all happy about the federal government getting involved in this crisis, but the country and small businesses are in a complete panic. A local company auto dealer laid off nearly 40 employees this week. Sales are at an all time low - from about 150 cars per week being moved to 20 per month.

I am fortunate enough to not have car payments, but everything I have is at least 12 years old.
88 honda civic
91 honda civic
96 chevy suburban

All paid for. I can't image a car payment on top of my mortgage and property payments.

I do think that this regulation is leading us towards socialism. Whats amazing is that many Americans know how to solve this problem without more tax payer money. It's simple conservative economics.

- The USA needs to go into complete isolationism
- Get out of NATO and foreign entaglements
- Stop supporting foreign dictators who hate us
- Become completely energy independent through wind, nuclear and oil drilling.
- destroy the welfare state and limit welfare to 12-18 months one time
- start using land to farm additional crops. The world is coming to a food shortage.
- Export goods instead of import
- Diversify the workforce and have Americans learn to farm again
- Drill, Drill, Drill and export what oil we don't use.
- Nuclear power and wind power to charge autos of the future - plug in hybrids
- Upgrade the energy grid to support this new infrastructure
- Broadband internet and technology connectivity everywhere to stimulate this diversified workforce, telecommuting
- Build a huge wall at the border, tazer anyone coming across the border illegally
- Get rid of regulation and zoning which deprives land owners from significant value and possible small business start-ups
- Reduce the capital gains tax from 0-5% to get businesses to bring their money back to the USA
- Reduce building regulations so land owners can build low cost houses on their own. It costs more to permit a mobile home than it costs to put a used one on a piece of property. It's extorsion and artificial inflation of the market to increase government's taxable property value.

Do this and watch this economy boom....

If only the politicians were not so entagled with their own special interest groups.. this could be implemented and America would once again lead the world in productivity, exports and wealth.
          Ask Me Anything: The GayMA You've All Been Waiting For        

Welp. It's Apocalypse Eve here at The Money Shot. G$ bumped Mrs. Ward...and Lacey I guess, out of the hot seat in a move that will never be forgiven. I bet Mrs. Ward would have had some boiling hot takes. But I felt the right thing to do was grant the slave master of this site his wish; An AMA done by your favorite blogger's favorite blogger. Enjoy.

 Ace: I prefer the ol Facebook chat for the AMA's. I'm gonna send u the ones that got submitted so far first. Then send u the real gay ones after I'm drunk at beerfest. I would like you to ask G$ how many times on average he jerks off each week?
G$: What I do in the privacy of my own office bathroom stall is my business. More than zero...way less than hourly

 Ace: How emasculated are you on a daily basis with a daughter, wife, and a beagle that gets picked on by other neighborhood toughs?
G$: Jesus Christ...this is obvz from Ide because only a childless shit-dick would think that baby gender actually matters. I'm not of 17th century British nobility so having an heir matters little. So to answer the stupid ass question, I feel fully masculine.

 Ace: You eat steak medium well like a spade. Iceman prefers fanta. So, who is the bigger asshole when they walk into a Denny's; you or Iceman? (I was fucking dying when I first saw this question, well done)
G$: Iceman lives in Florida so we might have to go to Shoney's. I've eaten at Denny's once in the last 20+ years and it was 6 hours after visiting Prime. I ordered a burger that was 90% grease and I didn't eat it. But I also did not send it back because I was afraid what would come out next. Ice treats servers like filth so definitely he would be the bigger ass while I constantly apologize.

 Ace: AMA for G$: Be real. How many times have you used that flesh light?
G$: You have to admit that it was a baller move to win the DFL and make Dut buy me a sex toy trophy. I don't have the exact number in my head but it isn't more than five times. It is more for show these days. But yeah, you shouldn't ever ask to touch it.

 Ace: If you could bro out w/ any athlete, who would it be and why?
G$: Gronk. Easy. You are guaranteed getting laid by multiple skanks and will get shithouse drunk. I kept it in my race because I have no clue how I would handle going clubbing with black guys.

Ace: What songs would be included in a "faves of G$" playlist?
G$: I'm starting to get into Band of Horses as The Funeral is such an ELITE song. My iTunes account is packed with Big Tymers, Eminem, Pearl Jam, Tony Bataska songs for some reason but they do get better with each listen, and I'm down with Vance Joy. For my money, and I know that Iceman will agree, Hunger Strike by Temple of the Dog is the greatest song of all time.

Ace: Favorite and least favorite commenter?
G$: Favorite is Prime simply because it was this site that reconnected us after 20 years. It's cool when the Internet works in a positive way. Least favorite are those that quit. May their shit names never be spoken again.
Ace: That's a fucking copout response. Who is ur least favorite commenter
G$: Fine. Least is Cakes who just disappeared without even giving a sad excuse.

Ace: What was the ultimate deciding factor in shutting it down?
G$: You have no idea how much the garbage fucking trash NFL season hurt my soul. This was BAD. When you add in ohio Buckeyes winning as well, that did not help. Basically, I lost my passion for the craft (not Aaron Craft though because he is a faggot)

G$: By the way, original Coors is a rock solid cheap beer.
Ace: The banquet beer is white trash toilet water.

Ace: What's the best beer you've ever had?
G$: I am no snob on this but I've always loved a big ass stein of Spaten.

Ace: Are you sending me coordinates to a cock party?
G$: I don't think I am.
Ace: This was sent from you:

 G$: I was unaware of this...I like our relationship where it is.

Ace: What's better, life without kids or with it better?
G$: That's a good question. You're definitely more busy with one in tow. Sometimes I miss my lazy ass weekends and nights out with the bros but I love having a kid. I don't expect the childless to understand this sentiment.

Ace: 2nd question from Drew: If you had to have sexual relations with one commenter or else your beautiful spawn would be shipped to Syria, who would it be?
G$: I want to go with a guy who has been there before and would be discreet. So spread dem cheeks, Dut!

Ace: Marry, Fuck, Kill: RG3, Big Ben, Travis Prentice
G$: Kill Ben that's easy. Marry Prentice. And I've been saying it a lot this year anyway but fuck RG3.

Ace: Your top 5 porn stars ever.
G$: 1. Jenna Jameson and the rest in no particular order are Gianna Michaels, Brooklyn Chase, Briana Banks, and pre-BBW Carmella Bing edges out Amy Reid and Tera Patrick
Ace: *Googles Brooklyn Chase* She's well equipped.

Ace: If you could pick one job for the rest of your life, what would it be? And it has to be a job...not lotto stud.
G$: Lotto stud seems pretty sweet but I've always liked the looks of Ron Swanson's gig on Parks & Rec.  I think that he is the Parks Director.  You hire good people and do nothing yourself.  Plus, working for a city's Parks Department is enjoyable.  I know from experience, dude. Also: rock star would be badass

Ace: Pick 1: Cavs title, Redskins title or Miami winning BCS Bowl. The one you pick happens, but the others are guaranteed not to happen for another 25 years.
G$: You mean that if I don't pick the Redhawks to win a BCS Bowl then they won't for 25 years?  How horrible!  I want Dan Snyder to die ringless so I'm picking the Cavs just so I can hold it over all those losers up there that they are winners because of me
Ace: If it were Redhawks win a Natty you would pick that....right?
G$: Yes I would pick a national title obvz

Ace: Another user submitted question: Where is Cakes?
G$: That's what I want to know. I ain't gonna beg but we deserve an explanation

Ace: Hall Pass: You can bang one chick with She$'s blessing and no guilt. Who is it?
G$: Dolph Lundgren but if he's too busy with Iceman, put me down for Anne Hathaway.
Ace: That's the worst choice ever.

Ace: Why did you start the blog?
G$: TUNE IN TOMORROW BECAUSE G$ BIG TIMED(NOT BIG TYMED) ME AND WILL ANSWER THAT TOMORROW.
Ace: Don't make me go all whiny Bobby Costas on you.
G$: Well, I need something for the finale, god dammit


Ace: How did you come up with The Money Shot as the name? What was the second choice for blog name?
G$: The name was part of a poll I conducted in the early days.  TMS won while The Mustache Ride finished second.  To be honest, I was pulling for the latter.  Maybe 10 people voted so it was way more successful than a non-presidential general election.

Ace: What's your favorite Stube story?
G$: Stube memory - Every once in a while back in the not-married days, I would work the door.  Burke used to bartend on Sundays so if it was a three day weekend, I would check IDs for him.  Checking IDs is pretty boring so I used to fuck with people and accuse them of having fakes to see what they would do.  One douche did not care for this move (it was a pretty obvious "I'm just fucking with you vibe") and told me to go fuck myself.  So I frisbee flung his ID out into the middle of the parking lot and told him to never come back.  It felt great.
Ace: That's fantastic.
G$: By the way, the Stube Door gig came with 40 bucks at the end of the night and all the beer/shots that I could drink.  It was a GREAT job but probably not what Kempton wanted his door guy to do.  Fuck him and the Seahawks.


Ace: What was the apex of The Money Shot? Like was there a time period where page views were really up and you thought you or TMS could go big time?
G$: Apex...I used to put together a lot of list posts before Buzzfeed killed lists forever that would get linked at a lot of the big boy sites.  But the problem with the internet is that now days everything that you think of, someone has already done better.  Five years ago, that wasn't necessarily the case.  I think that my Sweatiest Coaches in College Hoops is the all-time traffic leader with something like 40K hits in one day...The part about where I envisioned the site to go is going to be a part of Wednesday.


Ace: What 3 posts would you say were your finest work? Or are you covering that tomorrow too.
G$: My God, you are asking me to pick three favorites out of 9+ years?  This truly is a hard-hitting GayMA!  The hardest one that I ever wrote was the day after my dog got hit by a car.  That one was tough.  Back when commenters getting married was fast and furious, I always enjoyed the pre-wedding day advice posts.  And I think that my favorite post here was when I ran Denard through Gruden's FFCA segment.  Also: The BRAHs 4 Life.

Ace: A late commenter question: Ask him what he plans to do to fill the void of ego inflation from internet trolls?
G$: That's a thing that I am concerned about.  I am the Slumlord of Baltic Avenue here.  Once the slum closes tomorrow, then what?  I pretty much only have one goal left anyway and that is to get TBone fired from The Fan.

Ace: How about what was your favorite post of mine and Ice? Or at least the one that sticks out above the rest of Icemans cock jokes?
G$: Will you ever live down May The Forcier Be With You?  I think not.  It was not your best effort but no one will ever forget it.  I always enjoyed Iceman and I's mock drafts and, without him going to the Friday's on Airport Hwy every night, we would have never met the Harbaugh Boys as who they really are.
Ace: I need to go back and read that post. Tater really fucked me there. Also, I actually own a shirt that says "May the Forcier be With You".

Ace: Top 3 Big Tymers songs?
G$: 1. #1 Stunna 2. Rocky 3. Big Ballin...not a big fan of Still Fly for some reason.

Ace: Why does everybody hate Dut?
G$: He's a weasel that openly brags about groomed stubble

Ace: As I'm in the middle of cooking a feast right now, What is the best meal you could make?
G$: I work well with pork and I'm good with seasoning.  Put me down for a grilled Cajun chop with bacon and cheese rotini as a side.  I make that shit from scratch.  Roux brah!
Ace: Impressive.

Ace: What do you really think happened to Cakes? My theory is he went into mourning after Ice left for Florida and couldn't take having Internet TAEKS with him and not being able to touch his face.
G$: Probably something simple like he's too dumb and felt inadequate around such brilliant takesmiths

Ace: Are you afraid of Mrs Ward? I am.
G$: Nah she married a turd sandwich.

Ace: Why aren't you protecting your dog?
G$: I wish I knew. Someone remind me in the comments to bring closure to that story. I come off like a stud.
Ace: I have my doubts.

Ace: Any sage advice for me as I am 5 months away from fatherhood?
G$: Honestly, it's easier than you think. I am NOT saying that it's easy but I built it up in head as worse than a lifetime hourly convo with Jeff but it's not. Keep a level head. Shit is going to happen. Also, do not seek to watch your kid come out. You don't want that.
Ace: I decided long ago that I would not move below the waist when it was time. No man needs to see that.

Ace: Would you ever move back to Naptown?
G$: I highly doubt it. I've long grown out of my fondness of small town America. And I don't need the in laws showing up unannounced.

Ace: Who do you predict will show up for Ribfest?
G$: The usuals will be there. Dut won't. I'm calling two Sauls and Lacey to bring one of not both of his bro in laws

Ace: Do you ever get tired of being called a ginger/lacking a soul?
G$: Someone get this n-word an urban dictionary.  One of the many kids he left behind might have one.
Ace: I'll take that as a yes.

Ace: What's your favorite app on your phone, other than PROBOARDS.
G$: My least favorite is espn. Twitter is the best. I was so wrong about it.

Ace: What is the first thing you do when you get home from work?
G$: I work out.  Get it over with before my ladies get home and I need to focus on being a mediocre husband and father

Ace: What sports team do you hate the most, other than the Redskins?
G$: Dallas Cowboys

Ace: How many times can you wear dress pants before washing them? Not being able to wear sweatpants to work is really throwing me off.
G$: Twice on the pants. Jeans can go weeks
Ace: That's fucking absurd. I'm wearing dress pants at least 6 times before they get washed, or drycleaned, right IDE?

Ace: How many people have touched your b-hole?
G$: *Crickets*

Ace: I think we've hit on just about everything. Anything else you would like to add?
G$: Nah. I'm good.
Ace: It was my pleasure allowing you to pleasure me in this interview
G$: Word.

And there you have it folks. The last ever AMA...or is it?

          Open Forum: Close Calls        
Yes officer. Yes to everything.
I'm training for the new gig in Cleveland Monday through Thursday so I haven't been very plugged in to the happenings in the sports world or the interwebz the last few days. So today I want to open it up and talk about some close calls we have all experienced. These can be life or death, legal, or whatever you can think of. I had one of those experiences Tuesday night.

So it's Tuesday, Seal hasn't taken me up on my offer to get a beer or go to the casino, and I'm about to get off work. So I look up a place relatively close to my hotel with a solid happy hour. I decide on this place called The Pub. Great choice. Half priced Guinness and cocktails, cheap apps, and young ladies running around in short skirts with their boobs out. Good times. So I have myself an old fashioned, 2 Guinness' and a burger and fries. I'm there for a little over an hour and a half. Nothing crazy, just something right below $25 so my new employer will cover it without an itemized receipt.

So I'm on my way back, just about 2 miles to my hotel. Half way there and I encounter one of those either/or long yellow lights. I could stop, but I'm going 40, the roads are still slick, and I think the safest thing for me to do is just roll on through. Again, when I entered the intersection the light was yellow. Wrong. It just so happens that sitting right on the corner is a municipal headquarters...which also happens to host a police department. I get through the light and a cop immediately pulls out behind me. I pull onto some side street. The lights start flashing. Here we fucking go.
THE WORST
I got a DUI when I was in college. I was 22. I was driving back to Toledo from BG at 4am because I was making a bad decision, leaving REDACTED WEASEL apartment (ed.-you can figure it out from there) because I'm pretty sure they were about to smoke some weed and I just wanted to pass out. Compounding that bad decision was the fact that I was driving my friends shitbox Ford Taurus, which had this neat electrical malfunction where once you turned the wipers on you had to turn the car off in order to get them to stop. So driving up 75 on a completely dry night with the windshield wipers flapping like Hope Solo's beef curtains probably wasn't the best way to avoid police attention. Oops. But I learned something that night, or at least I think I learned something. During the field sobriety testing, after I embarrassed myself trying to walk a straight line, I blew a .18. Stone cold sober obvs. But when I actually got taken back to the station for the breathalyzer, I placed my tongue as close as I could to the end while still being able to blow into the machine(I don't know how to make that sound any less gay). I blew a .13. Did that technique make a difference? No idea, but it wasn't something I was going to forget.

So here I sit. Waiting for some cop from the burbs with nothing better to do to come grill me and tell me I smell like booze, because of course. Sure enough, the second question, "How much have you had to drink tonight, sir?" Now I took a calculated risk in saying that I had a Guinness with dinner. He already had probable cause with me running the light, and then saying he smelled alcohol, so whether or not I said I had a drink wasn't going to make him change his mind. If he had just pulled me over for no reason, then I wouldn't admit a thing. I told him I'm only up here for work and don't know the area, told him I was caught between on the light and felt it was safer to proceed through it, and told him exactly where my hotel was and how close I was to it. And I'm fucking white which means I get a free pass, right? Hopefully me just being honest and white will get me on my way.

Wrong. After he runs my license and insurance he comes back and asks me to run through some sobriety tests. Say the alphabet starting at C and stopping at N. Okay. Touch my thumb to each finger, in order of pointer, middle, ring, pinky, while counting 1-2-3-4 and then do it backwards. Okay. He goes back to his car for a bit. I'm freaking the fuck out. I'm pretty sure I know what's coming next. I'm looking up everything I can on my phone to figure out what I should do next. Do I take the breathalyzer? Do I flat out deny everything? Do I do everything but the breathalyzer? So the cop comes back and tells me another unit is coming with a portable breathalyzer. I can take it, or if I refuse then I will have to get out of the car and do a full field sobriety test. He also tells me if I pass the breathalyzer then I don't get any ticket for the red light. So now I wait again.

While waiting this time I call a DUI lawyer hotline hoping that I can get somebody, anybody on the line that can tell me what to do. I get nobody, not even able to leave a message, just get hung up on. Looks like I'm on my own. So I start to look around my car. Anything to drink? Anything to eat? Anything at all that could possibly push the odds in my favor. I have half a coffee from that morning, that's actually turned into half slush. Well there it is. My plan is to chug this coffee the moment that other cop starts to walk towards me. I'm going to take the breathalyzer, at least the portable one because I'm pretty sure it's not admissible in court, and then if I don't pass then I will refuse it at the station. I have zero confidence this plan will work out. But it's all I've got. I'm also banking the general internet knowledge that, in my mind, is something like each 12 oz beer or single mixed drink will bump up your BAC by approximately .03. And your body should be able to metabolize at least one of those over the course of an hour. So I know that I'm close...or at least I think I do. But this cop and my guilty conscience have totally mindfucked me into believing that I'm gonna blow a .15 and end up in the slammer with my mugshot on the news.

So cop rolls up. I chug the coffee and put it down right before he gets to my window. I blow into the breathalyzer, using my same patented tongue strategy from before, and he bitches at me for not blowing hard enough(GAY). So I blow harder(and GAYer) and it clicks. I'm done. I sit there for a solid 2 minutes waiting for the results. Finally. The cop leans in, "Alright buddy, I'm gonna let you get on your way. You blew a .03. Next time don't run a red light in front of a police station after having a beer."
The disappointment in his voice gave me an instant boner. Fuck yes, motherfucker. I beat that shit. No idea how. I wasn't drunk by any means, but really thought 2 pints and the drink would put me above the limit. I don't think I've ever felt relief like that, in one single moment, ever in my life. The amount of dread that was running through my head while waiting in my car was mortifying; Mrs. Ace is going to kill me, I might have my license back by the time the baby is born, I'm going to lose my fucking job after two days, I don't really have anybody to help me out in Cleveland, and this fucking DUI is about to run me 2k when it's all said and done. Fuck all that.

I get back to the hotel and I don't know whether to go get blacked the fuck out at the bar or go back to my room and swear off drinking because that fucking feeling just isn't worth it. I went back to the room. Had some coffee(THE BEST FUCKING DRINK IN THE WORLD NOW FOREVER AND EVER) and called Mrs. Ace. She confirmed that she absolutely would have killed me.

I still don't know how I feel about all this. Did I do something wrong? Because I still feel really guilty and I'm not sure I have any reason to be. Obvs I ran the light, but did I get away with drunk driving? Am I a giant fucking ass hole for potentially putting Mrs. Ace through the hell that would have came with that DUI, including more than likely losing my job? Or am I just a victim of the demonization of drunk driving and being warped by all the bullshit adds with invisible cops? Don't get me wrong, drunk driving is bad, but the amount of airtime it receives is mindblowing and the inflation of the numbers done by the National Highway Traffic Safety Admin is bogus. I still feel like I could drink a six pack and drive safer than most folks in Grump's age group.

So there it is. My extremely close call to Mrs. Ace removing my balls and me being incredibly fucked with my job, and potentially finding another job because DUI's get you an almost immediate boot in the mental health and education world. Oh, and do you have any tips for making sure you don't get a DUI if you happen to get pulled over? I know with this group we have obvs had some experience. I am totes going to buy a portable breathalyzer and test my theory.

Leave your close calls in the comments
          Most prisons overcrowded says Prison Reform Trust        

Overcrowding and high reoffending rates are the norm in the prison system according to an analysis of recent statistics by the Prison Reform Trust.

Overcrowding and high reoffending rates are a fact of life in today’s prison system according to an analysis of recent prison population statistics by the Prison Reform Trust. Despite opening two new prisons this year with a capacity of 2,500 places, 59 per cent of prisons in England and Wales are operating at an overcrowded level.

Although the growth in the prison population has slowed down in recent months, prompting plans to close HMP Wellingborough, there are still 7,294 more people in the prison system than it is designed and built to hold. On 31 July 2012, there were 77 out of 131 establishments over the Prison Service’s Certified Normal Accommodation defined as “the good, decent standard of accommodation that the Service aspires to provide all prisoners”.

The most overcrowded prison in England and Wales, according to official figures, is HMP Kennet. Designed to hold 175 men, it now holds 337. In second place is Shrewsbury (built to hold 170 men and holding 326) and in third is Swansea (built for 240 and holding 435).

For people in prison themselves, overcrowding has a tangible impact. Nearly a quarter of people in prison are being held in overcrowded accommodation, either doubling up in cells designed for one occupant or being held three to a cell in cells designed for two people. Private prisons have held a higher percentage of their prisoners in overcrowded accommodation than public sector prisons every year for the 13 years to 2010/11.

Overcrowding makes it much harder for staff to work intensively with offenders on resettlement, says the Prison Reform Trust. Currently 47 per cent of adults reoffend within a year of leaving prison, rising to almost 57 per cent for those who had served a sentence of less than 12 months. Nearly 70 per cent of children aged 10 to 17 released from custody reoffend within a year.

The National Offender Management Service (NOMS) itself has recently acknowledged that “imprisonment in and of itself does not reduce reoffending. If anything it slightly raises reconviction rates after release”. The NOMS consultation document goes on to state that “to reduce reoffending, as well as mitigating the negative effects of imprisonment […] prisons need to focus on four essential factors”, the first being the “provision of a legal, safe, decent and rehabilitative regime supported by appropriate staff behaviours.”

Juliet Lyon, director of the Prison Reform Trust said: “Building our way out of the overcrowding problem is not the answer. The prison population can be safely reduced by curbing inflation in sentencing, calling a halt to any unnecessary use of custodial remand and investing in effective community penalties.

"Court ordered community sentences are more effective, by eight percentage points, at reducing one-year proven reoffending rates than custodial sentences of less than 12 months for similar offences. Rather than falling back on short, ineffective spells behind bars, investment in more intensive community sentences and public health solutions would cut crime and save the taxpayer money."

[Ekk/4]


          Stat Inflation        
So I’ve been wondering how Blizzard would solve the gear inflation issue – current players have insane gear compared to what future levelers will have. But just glancing at the jewelcrafting info that’s been datamined, it looks like they’re going for the “instantly blow past old epics” method. The new lowest level gems, the common […]
          As Students Struggle to Pay Tuition, Schools Scramble to Trim Budgets         

HOLLY SNIFF, who is the first person in her family to attend college, found out about making hard choices early on. "I really wanted to go out of state for school, but because of financial reasons I couldn't," says Ms. Sniff, who is now a sophomore at the University of Virginia in Charlottesville.

For as long as she can remember, Sniff has been putting away money for her education. "I saved every dollar I was given as birthday presents or special treats as a child," she says.

Those childhood savings along with summer earnings and additional financial help from relatives got Sniff through her first year of college. But tuition continues to rise, and Sniff, along with millions of other students, is struggling to keep up.

At the same time, both private and public colleges and universities are moving beyond trimming at the margins to control costs.

Many schools are freezing faculty salaries, suspending hiring, delaying building maintenance, limiting course offerings, and even cutting academic departments.

Administrators are finding that they can no longer fund every project, department, or program. In the 1991-92 academic year, 57 percent of all colleges and universities were forced to reduce their operating budgets, according to an annual survey by the American Council on Education in Washington, D.C.

At the University of Vermont, a budget committee's proposal to eliminate the School of Engineering led to an uproar and the eventual resignation of the university's president.

AS state funding shrinks, public universities are being forced to increase class sizes and cut back on student services. Students at California's public universities have staged massive student protests against overcrowded classes and eye-popping tuition increases.

Nationwide, public colleges raised their tuition and fees an average of 10 percent and private-college increases averaged 7 percent this year, according to the College Board's annual survey released last month.

"Given the state of the economy and its impact on state budgets, many people expected much larger [tuition] increases this year, particularly in the public sector," says Donald Stewart, president of the College Board.

The rate of increase for public-college tuition is actually down this year compared with last year's 13 percent rise. And private colleges held their increases to last year's rate.

Yet that doesn't mean tuitions are gravitating back to earthly levels, warns Arthur Hauptman, a college tuition consultant.

"What the public tuition number says is that the recession has eased a little bit," he says. "If things get better [in terms of the economy], you would expect to see some additional reduction in those numbers."

In the '90s, Mr. Hauptman points out, there is much more competition for state funds than there was in the 1980s. Health care, prisons, and elementary and secondary education are all clamoring for funding.

"Despite predictions at the beginning of the '80s that it would be a tough decade, it turned out to be a very good decade for higher education in terms of revenue growth," Hauptman says. "Every major revenue source for colleges grew in real terms during that time - federal, state, tuitions, endowments, sales, and services."

And how were those revenues spent? Some faculty critics argue that the funds were spent on administrative bloat. "The fact is that in the '80s administrative staff at both private and public colleges grew much faster than the faculty," Hauptman says. "It is also true, however, that in the 1980s faculty salaries increased in real terms."

Last year, Rep. Patricia Schroeder (D) of Colorado launched a congressional investigation into the skyrocketing cost of tuition at public colleges.

"When it comes to college education, American families are paying more and getting less," she said. "Since 1980, the cost of sending our kids to college, a key part of the American dream, has doubled or tripled the rate of inflation every single year."

The investigation found that the growing research orientation of public higher education has fed the spiraling tuition costs. The teaching load of professors dropped from the traditional 15 hours per semester to as low as six hours per semester at some institutions, according to the study.

Pinning down the cause of increased tuition at either public or private universities isn't easy. Education is a labor-intensive enterprise that does not lend itself to productivity gains, administrators argue.

"Because faculty salaries have lagged in the past and because of competition for faculty among universities and industry, faculty compensation [increases] now exceed inflation," points out Paul Locatelli, president of Santa Clara University in Santa Clara, Calif.

Yet it is possible to increase teaching loads, reexamine the length of the academic year, and de-emphasize research in an effort to gain productivity, argues Hauptman.

"Colleges want to increase their resources; it's a natural inclination," he says. "If you read the college presidents' letters to the parents, you would assume costs are pushing tuition increases. But I think it's more that the revenues provided by the tuition hikes allow the schools to increase costs."

Meanwhile, students like Holly Sniff are willing to work harder or borrow more in order to get a college degree. Sniff expects to have accumulated about $10,000 in loans before she graduates. "I think I'm better off taking out loans now and using my life savings so that hopefully in the future I can find a better-paying job," she says.

Increased indebtedness raises the stakes for many students. "I'm not really concerned with it now," Sniff says, "but as soon as I graduate I'm going to have to get a good-paying job to pay off all of these loans."

Become a part of the Monitor community


          RT2012 et étude thermique de votre habitation        
À l’heure ou les coûts de l’énergie augmentent souvent au-dessus de l’inflation il devient de plus en plus important d’avoir un maximum de contrôle sur ses dépenses énergétiques et toute économie est la bienvenue. Avec BET vous pourrez effectuer une étude complète de votre maison pour en mesurer son efficacité thermique et vous aider à [...]
          Pod/20th (ii) ... When a line is moving in the wrong direction        
The Mavericks opened up last night at -7.5 over the Knicks. At this number, I liked New York enough to make them one of my Plays Of The Day, in hopes of continuing a nice run of recent prognostications in the NBA (18-11, 62%, Feb 28-Mar 19/07).

Then today, after Dirk Nowitzki is profiled on the main Sports page at Yahoo.com (see German engineering: The European dream), Dallas begins to get pounded by the average fan driving up the number even higher, first to -8.0 and then to -8.5, a full point inflation fuelled exclusively on gameday action/interest.

This now becomes a most interesting situation.

Time to double-up ... on the Knicks ... who tonight (at +8.5) will be one of the rare teams in the league with a favourable match-up situation if/when the Mavericks (inevitably) decide to go with their small line-up.

NYK +8.5 over DAL (NBA)

[NBA rec'd: 66-68]
[NCAA-MBB rec'd: 1-1]
          BSP keeps policy rates anew        
By Joann Santiago MANILA, Dec. 17 (PNA) — Philippine monetary officials on Thursday maintained the Bangko Sentral ng Pilipinas’ (BSP) key rates after noting that inflation dynamics and risks to...
          4 Proven Strategies to Invest in Gold        
There are many reasons why you might want to invest in gold: as a hedge against inflation, currency risks or simply to diversify your portfolio. We discuss 4 proven strategies to help you invest in gold, and consider their pros and cons.
          USPS - New Prices Coming May 12, 2008        
j0379439 "Pricing has always been important to the Postal Service. Now, with greater pricing flexibility than ever, our customers have more choices, and we can price quickly in response to customer needs and the marketplace." - Pricing and Classification Vice President Stephen Kearney

The second half of last year's proposed postal rate changes takes place on May 12, 2008. The most commonly used classes are included in the rate changes. A few discounts will also be put into place, but these will not impact the average postal customer.

j0434883For those of us shipping packages:
Express Mail becomes zone-based with a 3 percent price cut when purchasing online or via corporate accounts. Meet USPS' quarterly minimums, will save shippers even more.

Priority Mail offers an average 3.5% savings if using electronic postage or meeting other USPS requirements.

Parcel Select features pricing and volume incentives for large- and medium-size shippers.

Parcel Return Service becomes weight based with savings for lighter packages.

j0288926Mr and Mrs John Doe's mailings will also be affected with changes. The USPS website is proud to state: "The average increase by class of mail is at or below the rate of inflation as measured by the Consumer Price Index."

The changes are as follows:
First-Class Mail letter (1 oz.) = $0.42
First-Class Mail letter (2 oz.) = $0.59j0413666
Postcard = $0.27
First-Class Mail large envelope (2 oz.) = $1.00
Certified Mail =$2.70
First-Class Mail International changes depend on destination
          Terminology and Meanings of Early Illnesses        
This was posted on a email listing I belong to. I thought it was really interesting and really helpful, so I thought I would share it with you all. I don't know who created it or who to give credit for it to, so if anyone knows let me know.
___________________________________________
Ablepsy - Blindness
Ague - Malarial fever
American plague - Yellow fever
Anasarca - Generalized massive edema
Aphonia - Laryngitis
Aphtha - Infant disease "thrush"
Apoplexy - Paralysis due to stroke
Asphicsia - Cyanotic and lack of oxygen
Asphycsia - Cyanotic and lack of oxygen
Atrophy - Wasting away or diminishing in size
Bad blood - Syphilis
Bilious fever - Typhoid, malaria, hepatitis or elevated temperature and bile emesis
Biliousness - Jaundice associated with liver disease
Black plague - Bubonic plague
Black fever - Acute infection with high temperature and dark red skin lesions and high mortality rate
Black pox - Black small pox
Black vomit - Vomiting old black blood due to ulcers or yellow fever
Blackwater fever - Dark urine associated with high temperature
Bladder in throat - Diphtheria (seen on death certificates)
Blood poisoning - Bacterial infection; septicemia
Bloody flux - Bloody stools
Bloody sweat - Sweating sickness
Bone shave - Sciatica
Brain fever - Meningitis
Breakbone - Dengue fever
Bright's disease - Chronic disease of kidneys
Bronze John - Yellow fever
Bule - Boil, tumor or swelling
Cachexy - Malnutrition
Cacogastric - Upset stomach
Cacospysy - Irregular pulse
Caduceus - Subject to falling sickness or epilepsy
Camp fever - Typhus; aka camp diarrhea
Canine madness - Rabies; hydrophobia
Canker - Ulceration of mouth or lips; or herpes simplex
Catalepsy - Seizures/trances
Catarrhal - Nose and throat discharge from cold or allergy
Cerebritis - Inflammation of cerebrum; or lead poisoning
Chilblain - Swelling of extremities caused by exposure to cold
Child bed fever - Infection following birth of a child
Chin cough - Whooping cough
Chlorosis - Iron deficiency anemia
Cholera - Acute, severe, contagious diarrhea with intestinal lining sloughing
Cholera morbus - Characterized by nausea, vomiting, abdominal cramps, elevated temperature, etc.; could also be appendicitis
Cholecystitus - Inflammation of the gall bladder
Cholelithiasis - Gall stones
Chorea - Disease characterized by convulsions, contortions and dancing
Cold plague - Ague which is characterized by chills
Colic - Abdominal pain and cramping
Congestive chills - Malaria
Consumption - Tuberculosis
Congestion - Any collection of fluid in an organ, like the lungs
Congestive chills - Malaria with diarrhea
Congestive fever - Malaria
Corruption - Infection
Coryza - A cold
Costiveness - Constipation
Cramp colic - Appendicitis
Crop sickness - Overextended stomach
Croup - Laryngitis, diphtheria or strep throat
Cyanosis - Dark skin color from lack of oxygen in blood
Cynanche - Diseases of throat
Cystitis - Inflammation of the bladder
Day fever - Fever lasting one day; sweating sickness
Debility - Lack of movement or staying in bed
Decrepitude - Feebleness due to old age
Delirium tremens - Hallucinations due to alcoholism
Dengue - Infectious fever endemic to East Africa
Dentition - Cutting of teeth
Deplumation - Tumor of the eyelids which causes hair loss
Diary fever - A fever that lasts more than one day
Diptheria - Contagious disease of the throat
Distemper - Usually animal disease with malaise, discharge from nose and throat and anorexia
Dock fever - Yellow fever
Dropsy - Edema (swelling), often caused by kidney or heart disease
Dropsy of the brain - Encephalitis
Dry bellyache - Lead poisoning
Dyscrasy - An abnormal body condition
Dysentery - Inflammation of the colon with frequent passage of mucous and blood
Dysorexy - Reduced appetite
Dyspepsia - Indigestion and heartburn; heart attack symptoms
Dysury - Difficulty in urination
Eclampsy - Symptoms fo epilepsy; convulsions during labor
Ecstasy - A form of catalepsy characterized by loss of reason
Edema - Nephrosis; swelling of tissues
Edema of lungs - Congestive heart failure; a form of dropsy
Eel thing - Erysipelas
Elephantiasis - A form of leprosy
Encephalitis - Swelling of the brain; aka sleeping sickness
Enteric fever - Typhoid fever
Enteritis - Inflammation of the bowels
Enterocolitis - Inflammation of the intestines
Epitaxis - Nose bleed
Erysipelas - Contagious skin disease due to Streptococci with vesiculas and bulbous lesions
Extravasted blood - Rupture of a blood vessel
Falling sickness - Epilepsy
Fatty liver - Cirrhosis of liver
Fits - Sudden attack or seizure of muscle activity
Flux - An excessive flow or discharge of fluid like hemorrhage or diarrhea
Flux of humour - Circulation
French pox - Syphilis
Gathering - A collection of pus
Glandular fever - Mononucleosis
Great pox - Syphilis
Green fever - Anemia
Grippe/grip - Influenza-like symptoms
Grocer's itch - Skin disease cause by mites in sugar or flour
Heart sickness - Condition caused by loss of salt from body
Heat stroke - Body temperature elevates because of surrounding environment temperature and body does not perspire to reduce temperature
Hectical complaint - Recurrent fever
Hematemesis - Vomiting blood
Hematuria - Bloody urine
Hemiplegy - Paralysis of one side of the body
Hip gout - Osteomylitis
Horrors - Delirium tremers
Hydrocephalus - - Enlarged head; water on the brain
Hydropericardium - Heart dropsy
Hydrophobia - Rabies
Hydrothroax - Dropsy in chest
Hypertrophic - Enlargement of an organ, like the heart
Impetigo - Contagious skin disease characterized by pustules
Inanition - Physical condition resulting from lack of food
Infantile paralysis - Polio
Intestinal colic - Abdominal pain due to improper diet
Jail fever - Typhus
Jaundice - Condition cause by blockage of intestines
King's evil - Tuberculosis of neck and lymph glands
Kruchhusten - Whooping cough
Lagrippe - Influenza
Lockjaw - Tetanus or infectious disease affecting the muscles of the neck and jaw; untreated, it is fatal in eight (8) days
Long sickness - Tuberculosis
Lues disease - Syphilis
Lues venera - Venereal disease
Lumbago - Back pain
Lung fever - Pneumonia
Lung sickness - Tuberculosis
Lying in - Time of delivery of an infant
Malignant sore throat - Diphtheria
Mania - Insanity
Marasmus - Progressive wasting away of the body, like malnutrition
Membranous croup - Diphtheria
Meningitis - Inflations of brain or spinal cord
Metritis - Inflammation of uterus or purulent vaginal discharge
Miasma - Poisonous vapors thought to infect the air
Milk fever - Disease from drinking contaminated milk, like undulant fever or brucellosis
Milk leg - Post partum thrombophlebitis
Milk sickness - Disease from milk of cattle which had eaten poisonous weeds
Mormal - Gangrene
Morphew - Scurvy blisters on the body
Mortification - Gangrene of necrotic tissue
Myelitis - Inflammation of the spine
Myocarditis - Inflammation of heart muscles
Necrosis - Mortification of bones or tissue
Nephrosis - Kidney degeneration
Nephritis - Inflammation of kidneys
Nervous prostration - Extreme exhaustion from inability to control physical and mental activities
Neuralgia - Described as discomfort, such as "headache" was neuralgia in head
Nostalgia - Homesickness
Palsy - Paralysis or uncontrolled movement of controlled muscles
Paroxysm - Convulsion
Pemphigus - Skin disease of watery blisters
Pericarditis - Inflammation of the heart
Peripneumonia - Inflammation of the lungs
Peritonitis - Inflammation of the abdominal area
Petechial fever - Fever characterized by skin spotting
Phthiriasis - Chronic wasting away or a name for tuberculosis
Plague - An acute febrile highly infectious disease with a high fatality rate
Pleurisy - Any pain in the chest area with each breath
Podagra - Gout
Poliomyelitis - Polio; Potter's asthma
Pott's disease - Tuberculosis of the spine
Puerperal exhaustion - Death due to childbirth
Puerperal fever - Elevated temperature after giving birth to an infant
Puking fever - Milk sickness
Putrid fever - Diphtheria
Quinsy - Tonsillitis
Remitting fever - Malaria
Rheumatism - Any disorder associated with pain in joints
Rickets - Disease of skeletal system
Rose cold - Hay fever or nasal symptoms of an allergy
Rotanny fever - (Child's disease) ???
Rubeola - German measles
Sanguineous crust - Scab
Scarlatina - Scarlet fever
Scarlet fever - A disease characterized by a red rash
Scarlet rash - Roseola
Sciatica - Rheumatism in the hips
Scirrhus - Cancerous tumors
Scotomy - Dizziness, nausea and dimness of sight
Scrivener's palsy - Writer's cramp
Screws - Rheumatism
Scrofula - Tuberculosis of neck lymph glands; progresses slowly with abscesses and pistulas develop; young person's disease
Scrumpox - Skin disease; impetigo
Scurvy - Lack of Vitamin C; symptoms of weakness, spongy gums and hemorrhages under the skin
Septicemia - Blood poisoning
Shakes - Delirium tremens
Shaking - Chills; ague
Ship fever - Typhus
Siriasis - Inflammation of the brain due to sun exposure
Sloes - Milk sickness
Small pox - Contagious disease with fever and blisters
Softing of brain - Result of stroke or hemmorhage in the brain, with an end result of the tissue softening in that area
Sore throat - distemper Diphtheria or quinsy
Spanish influenza - Epidemic influenza
Spasms - Sudden involuntary contraction of a muscle or group of muscles, like a convulsion
Spina bifida - Deformity of spine
Spotted fever - Either typhus or meningitis
Sprue - Tropical disease characterized by intestinal disorders and sore throat
St. Anthony's fire - Also erysipelas, but named so because of affected skin areas being bright red in appearance
St. Vitas dance - Ceaseless occurance of rapid complex jerking movements performed involuntarily
Stomatitis - Inflammation of the mouth
Stranger's fever - Yellow fever
Strangery - Rupture
Sudor anglicus - Sweating sickness
Summer complaint - Diarrhea, usually in infants, caused by spoiled milk
Sunstroke - Uncontrolled elevation of body temperature due to environment heat; lack of sodium in the body is a predisposing cause
Swamp sickness - - Could be malaria, typhoid or encephalitis
Sweating sickness - - Infectious and fatal disease common to the UK in the 15th century
Tetanus - Infectious disease characterized by high fever, headache and dizziness
Thrombosis - Blood clot inside blood vessel
Thrush - Childhood disease characterized by spots on mouth, lips and throat
Tick fever - Rocky Mountain spotted fever
Toxemia of pregnancy - Eclampsia
Trench mouth - Painful ulcers found along gum line; caused by poor nutrition and poor hygiene
Tussis convulsiva - Whooping cough
Typhus - Infectious fever characterized by high fever, headache and dizziness
Variola - Smallpox
Venesection - Bleeding
Viper's dance - St. Vitus dance
Yellowjacket - Yellow fever

          51) Which one of the following statements concerning production and staffing plans is best? A. A master production schedule is a projected statement of income, costs, and profits. B. Aggregation can be performed along three dimensions: product families, labor, and time. C. Production plans are based primarily on information from the master production plan. D. A staffing plan is the intermediate link between the business plan and the master production schedule.         

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that: A. you would lose $80 if one of your workers missed an entire 8 hour shift. B. the next worker that offers to work an extra 8 hours should receive at least $80. C. you would be willing pay up to $60 for someone to work another 6 hours. D.         

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel. A. physical, digital B. e-commerce, digital C. physical, financial D. digital, e-commerce E. digital, physical        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          54) When customers access a Web site and make purchases, they generate __________. A. Tracking cookies B. Web data C. Information D. Clickstream data E. Hyperlink data        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information. A. regionalization B. globalization C. nationalization D. business environment         

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          56) Various organizations that promote fair and responsible use of information systems often develop __________. A. a code of ethics B. responsibility charters C. a strategic plan D. a mission statement E. a goals outline        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          57) What is _____ is not necessarily _____. A. Illegal, unethical B. Unethical, legal C. Ethical, illegal D. Unethical, illegal E. Ethical, legal        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          58) _____ provides users with a view of what is happening, where _____ addresses why it is happening. A. Multidimensional data analysis, structured query language B. Multidimensional data analysis, neural networks C. Data mining, multidimensional data analysis D. Data mining, expert system E. Multidimensional data analysis, data mining        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          59) Computer support is greatest for which of the following problems? A. Semistructured and strategic planning B. Semistructured and management control C. Unstructured and operational control D. Structured and operational control E. Structured and management control        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          60) The management cockpit best exemplifies which type of system? A. Decision support system B. Functional area information system C. Expert system D. Digital dashboard E. Group decision support system        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          61) _____ is the efficient and effective execution of specific tasks. A. Operational control B. Expertise C. Management control D. Strategic planning E. Wisdom        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          62) Geocoding is __________. A. accessing geographical information B. integrating maps with spatially oriented databases and other databases C. integrating organizational transactions with spatially oriented databases D. programming spatially oriented databases E. encrypting spatial information        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          63) At 8% compounded annually, how long will it take $750 to double? A. 48 months B. 6.5 years C. 9 years D. 12 years        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.
           
69) An increase in future value can be caused by an increase in the __________.
A.   original amount invested B.   annual interest rate and number of compounding periods
C.   rate of return D.   dividends paid E.   starting value
70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A.   at equilibrium.
B.   undervalued. C.   a good buy. D.   overvalued.
71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt     8%
Cost of preferred stock           12%
Cost of common stock            16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A.   $1,568
B.   $871 C.   $1,241
D.   $463
72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A.   The project’s IRR would have to be less that the firm’s discount rate. B.   The project would add value to the firm. C.   Under all conditions, the project’s payback would be less than the profitability index.
D.   In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
           
73) The common stockholders are most concerned with:
A.   the spread between the return generated on new investments and the investor’s required rate of return.
B.   the size of the firm’s beginning earnings per share. C.   the risk of the investment. D.   the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A.   eliminate different financial risks.
B.   eliminate competitive factors. C.   eliminate judgment factors. D.   eliminate different business risks.
75) Which of the following best represents operating income?
A.   Income from discontinued operations
B.   Earnings before interest and taxes C.   Income from capital gains D.   Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A.   is even less predictable. B.   leans basically toward economy, quality, and dependability.
C.   is always emotional. D.   is strictly economic and not at all emotional. E.   is always based on competitive bids from multiple suppliers.
           
77) The basic objective of the U.S. market-directed economic system is to:
A.   achieve an annual growth rate of at least 10 percent. B.   provide each person with an equal share of the economic output.
C.   make the most efficient use of the country's resources. D.   minimize inflation. E.   satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A.   GDP measures show people's tendency to buy particular products. B.   income tends to be evenly distributed among consumers in most countries. C.   GDP estimates may not be very accurate for very different cultures and economies.
D.   Other countries most likely don’t use the US Dollar as their primary currency.
E.   GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A.   Promotion.
B.   People. C.   Price. D.   Place. E.   Product.
80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A.   Brand familiarity B.   Positioning
C.   Market scanning D.   Customer relationship management (CRM)
E.   Market segmentation
81) The "four Ps" of a marketing mix are:
A.   Production, Personnel, Price, and Physical Distribution
B.   Promotion, Production, Price, and People C.   Potential customers, Product, Price, and Personal Selling
D.   Product, Price, Promotion, and Profit E.   Product, Place, Promotion, and Price
82) When evaluating macro-marketing:
A.   the evaluation is necessarily subjective. B.   the best approach is to consider the profit generated by individual firms within the overall system.
C.   one must determine how efficiently the society's resources are used. D.   one must consider the society’s role in the marketing system. E.   one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show that:
A.   the broad product-market can be served effectively with one marketing mix.
B.   most consu
          64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period? A. Cash flow statement B. Balance sheet C. Income statement D. Quarterly statement        

BUS/475 Guide 4


1) The cost principle requires that when assets are acquired, they be recorded at __________.
A.   list price B.   selling price C.   exchange price paid D.   appraisal value
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A.   have been approved for use by the managements of business firms
B.   have been approved by the Internal Revenue Service C.   have substantial authoritative support D.   are proven theories of accounting
3) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A.   standards of financial reporting B.   operating guidelines C.   generally accepted accounting principles D.   generally accepted accounting standards
4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A.   $8,250
B.   $750 C.   $4,500
D.   $5,250
           
5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A.   2,133 units
B.   6,200 units
C.   $25,600 D.   4,600 units
           
6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A.   The western division’s vice president’s salary
B.   Cost of landscaping the corporate office C.   General corporate liability insurance D.   Factory janitor
7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A.   Master budgeting analysis
B.   Exception reporting C.   Responsibility reporting
D.   Static reporting
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A.   $6,000 B.   $12,000
C.   $28,000
D.   $18,000
           
9) The cost of an asset and its fair market value are __________.
A.   never the same B.   irrelevant when the asset is used by the business in its operations
C.   the same on the date of acquisition D.   the same when the asset is sold
10) Which one of the following is a product cost?
A.   Indirect labor B.   Sales person’s salaries
C.   Advertising costs D.   Office salaries
11) What exists when budgeted costs exceed actual results?
A.   A budgeting error B.   An unfavorable difference
C.   An excess profit D.   A favorable difference
12) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
                        Income Statement                  Balance Sheet
            Dr.       Cr.                   Dr.       Cr.
Totals              $58,000           $48,000                       $34,000           $44,000
           

Closing entries are necessary for __________.
A.   permanent accounts only B.   both permanent and temporary accounts
C.   permanent or real accounts only D.   temporary accounts only
13) Managerial accounting __________.
A.   is concerned with costing products B.   pertains to the entity as a whole and is highly aggregated
C.   places emphasis on special-purpose information D.   is governed by generally accepted accounting principles
           
14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A.   Beer B.   Selling either results in the same additional income for the company
C.   It should sell an equal quantity of both D.   Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A.   saver who demands money from the financial system B.   borrower who demands money from the financial system
C.   borrower who supplies money to the financial system D.   saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A.   the value to Maurice of the option he would have chosen had Option B not been available
B.   $100 C.   $300 D.   the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A.   the economy is producing efficiently B.   the economy is engaged in trade with at least one other economy C.   increasing the production of one good by x units entails no opportunity cost in terms of the other good
D.   increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
           
18) In economics, the cost of something is __________.
A.   what you give up to get it B.   often impossible to quantify, even in principle C.   the dollar amount of obtaining it D.   always measured in units of time given up to get it
           
19) A tax on an imported good is called a __________.
A.   supply tax
B.   trade tax C.   quota D.   tariff
20) Which of the following statements about GDP is correct?
A.   GDP is to a nation’s economy as household income is to a household. B.   GDP increases if the total population increases. C.   GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D.   Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
           
21) In computing GDP, market prices are used to value final goods and services because __________.
A.   if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B.   Market prices are not used in computing GDP C.   market prices reflect the values of goods and services D.   market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A.   Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B.   Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C.   Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D.   Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
           
23) Which of the following is not correct?
A.   The U.S. debt per-person is large compared with average lifetime income.
B.   In 2005, the U.S. government had a deficit. C.   A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D.   Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
           
24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A.   balance of trade. B.   financial and capital account.
C.   government financial account.
D.   current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A.   the sacrifice ratio dilemma B.   the monetary policy reaction lag
C.   the time inconsistency of policy
D.   inflation targeting
26) In general, the longest lag for __________.
A.   fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B.   both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C.   monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D.   both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A.   Only item (2) is included in GDP and it is included in the investment component.
B.   Item (1) is included in the consumption component, while item (2) is included in the investment component.
C.   Item (1) is included in the investment component, while item (2) is included in the consumption component.
D.   Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A.   Professional B.   Interpersonal and communication
C.   Technical D.   Professional E.   Conceptual and decision
29) Which of these represent skills that managers need?
A.   Interpersonal, quantitative, and professional B.   Technical, interpersonal & communication and conceptual & decision making
C.   Professional, technical and interpersonal & communication D.   Conceptual & decision making, professional and technical E.   Interpersonal & communication, conceptual & decision making and professional
           
30) Building a dynamic organization is another way of describing which function of management?
A.   Staffing B.   Organizing
C.   Leading D.   Controlling
E.   Planning
31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A.   Anyone can start a business B.   All entrepreneurs need venture capital in order to get started C.   Successful entrepreneurs take very careful, calculated risks D.   Entrepreneurs are their own bosses and completely independent
E.   Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A.   Diversity B.   Managerial ethics
C.   Recruiting D.   Employment E.   Selection
33) A manager's ability to stimulate people to be high performers is referred to as:
A.   Planning B.   Supervising
C.   Controlling
D.   Organizing E.   Leading
34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A.   Total quality management B.   Customer-based integration C.   Computer-integrated manufacturing (CIM)
D.   Just-in-time control (JIT)
E.   ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs enable them to maintain:
A.   A strategic alliance B.   A homogeneous workforce C.   Positive working relationships with all employees
D.   A Learning advantage over their competition E.   Larger, faster facilities
36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A.   Technical skills B.   Conceptual C.   Professional skills D.   Interpersonal/communication skills
E.   Diagnostic skills
37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A.   To develop an organization wide policy on sexual harassment B.   To establish a means for ongoing training C.   To act immediately when employees complain of sexual harassment
D.   To establish a performance appraisal system E.   To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A.   Management teams B.   Transnational teams
C.   Self-managed teams
D.   Parallel teams E.   Self-designing teams
           
39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A.   Goal Coordination
B.   Controlling C.   Organizing D.   Staffing E.   Planning
40) As related to managing of human resources, diversity refers to:
A.   Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B.   Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C.   Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D.   Differences in retention strategies (such as training, hiring, incentives, etc) E.   Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
           
41) __________ is the process of working with people and resources to accomplish organizational goals.
A.   Controlling B.   Decision making
C.   Planning D.   Supervising E.   Management
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A.   3 B.   3.5
C.   2.5
D.   2
43) Use the following table to answer question:
 P(S | W) is approximately _____.
A.   .40
B.   .30
C.   .12
D.   .58
           
44) Use the following table to answer question:
 P(M  A) is approximately _____.
A.   .50 B.   .625
C.   .125
D.   .25
45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of the following is true?
A.   The p-value is equal to .05. B.   The p-value is greater than .05. C.   The p-value cannot be determined without specifying  . D.   The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A.   High R2 (due to city size). B.   Positive slope (due to city size).
C.   No correlation. D.   Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A.   Midrange
B.   Mean C.   Mode D.   Median
           
48) Likely reasons for inaccurate control limits would include which of the following?
A.   Process variation was not zero, as expected. B.   The engineering parameter for variance is unknown.
C.   There was insufficient preliminary sampling. D.   The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A.   The most you would want to pay for an additional unit of A would be $7.50.
B.   You can change quantities of X and Y at no cost for Constraint B. C.   For every additional unit of the objective function you create, the price of A rises by $7.50.
D.   For every additional unit of the objective function you create, you lose 0 units of B.
           
50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A.   The expected duration of this project is 25 + 15 + 20 = 60 days.
B.   A–D–C is the critical path. C.   The expected duration of this project is 25 days. D.   A–B–C has the most slack.
51) Which one of the following statements concerning production and staffing plans is best?
A.   A master production schedule is a projected statement of income, costs, and profits.
B.   Aggregation can be performed along three dimensions: product families, labor, and time.
C.   Production plans are based primarily on information from the master production plan.
D.   A staffing plan is the intermediate link between the business plan and the master production schedule.
           
52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A.   you would lose $80 if one of your workers missed an entire 8 hour shift. B.   the next worker that offers to work an extra 8 hours should receive at least $80.
C.   you would be willing pay up to $60 for someone to work another 6 hours.
D.   you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A.   physical, digital B.   e-commerce, digital
C.   physical, financial D.   digital, e-commerce
E.   digital, physical
54) When customers access a Web site and make purchases, they generate __________.
A.   Tracking cookies B.   Web data C.   Information D.   Clickstream data
E.   Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A.   regionalization B.   globalization C.   nationalization D.   business environment
           
56) Various organizations that promote fair and responsible use of information systems often develop __________.
A.   a code of ethics B.   responsibility charters
C.   a strategic plan D.   a mission statement E.   a goals outline
57) What is _____ is not necessarily _____.
A.   Illegal, unethical B.   Unethical, legal C.   Ethical, illegal D.   Unethical, illegal
E.   Ethical, legal
58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A.   Multidimensional data analysis, structured query language
B.   Multidimensional data analysis, neural networks C.   Data mining, multidimensional data analysis D.   Data mining, expert system E.   Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A.   Semistructured and strategic planning B.   Semistructured and management control
C.   Unstructured and operational control D.   Structured and operational control E.   Structured and management control
60) The management cockpit best exemplifies which type of system?
A.   Decision support system B.   Functional area information system
C.   Expert system D.   Digital dashboard E.   Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A.   Operational control
B.   Expertise C.   Management control
D.   Strategic planning E.   Wisdom
62) Geocoding is __________.
A.   accessing geographical information B.   integrating maps with spatially oriented databases and other databases
C.   integrating organizational transactions with spatially oriented databases D.   programming spatially oriented databases E.   encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A.   48 months
B.   6.5 years C.   9 years D.   12 years
64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A.   Cash flow statement
B.   Balance sheet C.   Income statement D.   Quarterly statement
           
65) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A.   $570 B.   $490 C.   $900 D.   -$150
           
66) Disadvantages of using current liabilities as opposed to long-term debt include:
A.   higher cash flow exposure B.   greater risk of illiquidity, and uncertainty of interest costs
C.   decreased risk of liquidity D.   certainty of interest costs E.   uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A.   12.5% B.   36.13%
C.   8.0% D.   13.6%
68) Which of the following is most consistent with the hedging principle in working capital management?
A.   Fixed assets should be financed with short-term notes payable. B.   Inventory should be financed with preferred stock. C.   Accounts receivable should be financed with short-term lines of credit.
D.   Borrow on a floating rate basis to finance investments in permanent assets.