general business data bank

general business data bank

Question

6.5 Project Selection with Resource Restraints

1) Which of the following statements is false?

A) If there is a fixed supply of resource available, you should rank projects by the profitability index, selecting the project with the lowest profitability index first and working your way down the list until the resource is consumed.

B) Practitioners often use the profitability index to identify the optimal combination of projects when there is a fixed supply of resources.

C) If there is a fixed supply of resources available, so that you cannot undertake all possible opportunities, then simply picking the highest NPV opportunity might not lead to the best decision.

D) The profitability index is calculated as the NPV divided by the resources consumed by the project.


2) Which of the following statements is false?

A) The profitability index measures the value created in terms of NPV per unit of resource consumed.

B) The profitability index is the ratio of value created to resources consumed.

C) The profitability index can can be easily adapted for determining the correct investment decisions when multiple resource constraints exist.

D) The profitability index measures the "bang for your buck."

3) You are opening up a brand new retail strip mall. You presently have more potential retail outlets wanting to locate in your mall than you have space available. What is the most appropriate tool to use if you are trying to determine the optimal allocation of your retail space?

A) IRR

B) Payback period

C) NPV

D) Profitability index

Use the table for the question(s) below.

Consider a project with the following cash flows:

Year

Cash Flow

0

-10,000

1

4,000

2

4,000

3

4,000

4

4,000

4) Assume the appropriate discount rate for this project is 15%. The profitability index for this project is closest to:

A) .14

B) .22

C) .60

D) .15

5) The profitability index for project A is closest to:

A) 0.12

B) 21.65

C) 0.17

D) 12.04

6) The profitability index for project B is closest to:

A) 23.34

B) 12.64

C) 0.17

D) 0.12


Use the table for the question(s) below.

Consider the following list of projects:

Project

Investment

NPV

A

135,000

6,000

B

200,000

30,000

C

125,000

20,000

D

150,000

2,000

E

175,000

10,000

F

75,000

10,000

G

80,000

9,000

H

200,000

20,000

I

50,000

4,000

7) Assuming that your capital is constrained, which investment tool should you use to determine the correct investment decisions?

A) Profitability Index

B) Incremental IRR

C) NPV

D) IRR

8) Assuming that your capital is constrained, which project should you invest in first?

A) Project C

B) Project G

C) Project B

D) Project F

9) Assuming that your capital is constrained, what is the fifth project that you should invest in?

A) Project H

B) Project I

C) Project B

D) Project A

10) Assuming that your capital is constrained, which project should you invest in last?

A) Project A

B) Project I

C) Project D

D) Project C


11) Assuming that your capital is constrained, so that you only have $600,000 available to invest in projects, which project should you invest in and in what order?

A) CBFH

B) CBGF

C) BCFG

D) CBFG

12) Assume that your capital is constrained, so that you only have $600,000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total NPV for all the projects you invest in will be closest to:

A) $65,000

B) $80,000

C) $69,000

D) $111,000


13) Assume that your capital is constrained, so that you only have $500,000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total NPV for all the projects you invest in will be closest to:

A) $111,000

B) $69,000

C) $80,000

D) $58.000

Use the information for the question(s) below.

The Sisyphean Company is planning on investing in a new project. This will involve the purchase of some new machinery costing $450,000. The Sisyphean Company expects cash inflows from this project as detailed below:

Year One

Year Two

Year Three

Year Four

$200,000

$225,000

$275,000

$200,000

The appropriate discount rate for this project is 16%.

14) The profitability index for this project is closest to:

A) .44

B) .26

C) 0.39

D) .34


Use the information for the question(s) below.

Your firm is preparing to open a new retail strip mall and you have multiple businesses that would like lease space in it. Each business will pay a fixed amount of rent each month plus a percentage of the gross sales generated each month. The cash flows from each of the businesses has approximately the same amount of risk. The business names, square footage requirements, and monthly expected cash flows for each of the businesses that would like to lease space in your strip mall are provided below:

Business Name

Square Feet Required

Expected Monthly Cash Flow

Videos Now

4,000

70,000

Gords Gym

3,500

52,500

Pizza Warehouse

2,500

52,500

Super Clips

1,500

25,500

30 1/2 Flavors

1,500

28,500

S-Mart

12,000

180,000

WalVerde Drugs

6,000

147,000

Multigular Wireless

1,000

22,250


15) If your new strip mall will have 15,000 square feet of retail space available to be leased, to which businesses should you lease and why?

16) If your new strip mall will have 16,000 square feet of retail space available to be leased, to which businesses should you lease and why?

17) Consider the following list of projects:

Project

Investment

NPV

A

405,000

18,000

B

600,000

90,000

C

375,000

60,000

D

450,000

6,000

E

525,000

30,000

F

225,000

30,000

G

240,000

27,000

H

600,000

60,000

I

150,000

12,000

J

270,000

30,000

You are given a budget of only $1,800,000 to invest in projects. Which projects will you select, in what order will you se

Question_DOC2_12Dec_7th

Question_DOC2_12Dec_7th

Question

TRUE/FALSE

1. Talent management is growing in importance because skilled workers are harder to find.

2. Talent management has a broader range of activities than does training and development

3. Talent management is often focused on just the high potential employees in the organization.

4. Organization-centered career planning focuses on identifying career paths within the organization.

5. A career path designed to retain employees must map out steady upward progression through the

organization.

6. An individual’s career will typically cycle between periods of stability and less-stable periods of

transition.

7. The primary reason why people choose one career over another is the prospect of high compensation.

8. Phased-retirement is a means of gracefully allowing older employees with outdated skills to gradually

leave the organization.

9. Jennifer was looking forward to early retirement so that she could “get a life.” But she is finding it

difficult to decide how to spend her time. Jennifer describes herself as lacking direction. This is a

common problem for retirees regardless of the age at which they retire.

10. Job rotation is a good method for dealing with plateaued employees.

11. Marcia has introduced herself as experiencing an involuntary career transition. You would probably be

correct in thinking that Marcia is being terminated or laid off.

12. Recent college graduates often experience entry shock in their first job because they resent the close

supervision and the highly-defined problems they are assigned at work after the relative freedom and

independence of school.

13. Not all jobs are compatible with the flexibility that women with small children prefer.

14. By 2020 it is anticipated that women will make up almost half of corporate officer positions.

15. Job sequencing allows women to interrupt their careers for family considerations without having a

negative impact on their ultimate advancement.

16. Dual career ladders have been established by many large companies to deal with the problems faced by

two-earner families.

17. Most global firms find it is better to have expatriates rather than locals staff the management positions

of their foreign operations because expatriates have a better understanding of the firm’s operations and

goals.

18. Organizations that have extensive employee development programs run the risk of being “training

programs” for other firms that hire away their employees. Consequently, organizational development

efforts need to be closely tied to current and immediate organizational needs.

19. Since development is not tied to the employee’s current job requirements, it is not necessary that

development activities be tied to organizational strategy.

20. Assessment centers are specially equipped training facilities that are used to evaluate individual

employees one-on-one with evaluators.

21. Psychological testing can furnish useful information to employers about such factors as leadership

style, initiative, and supervisory skills.

22. Job rotation tends to be expensive because it takes time for rotated employees to become familiar with

their new units.

23. The learning organization is an organization in which information is shared, leaders value learning,

and the culture supports employees who want to develop new skills.

24. Ann’s supervisor is enthusiastic about instituting outdoor training into their organization. Ann is

concerned that it may not be appropriate because the physical nature of the training and the hazards

involved and a number of Ann’s subordinates are physically-challenged. Ann’s concerns are realistic.

25. John has been promoted to supervisor and is having a difficult time dealing with the people problems

his new position entails. John would be a good candidate for human relations training.

26. If an individual is unlucky and has supervisors with poor management skills, he/she will be unable to

develop good management skills because of this negative model.

27. One of the major problems with management development efforts is inadequate HR planning.

28. Encapsulated development occurs when a single work unit in an organization is used to pilot test new

training programs.

29. Succession planning should be done for all key jobs in the organization, regardless of hierarchical

level.

30. A replacement chart identifies which employees are qualified to move into key positions when they

become vacant.

31. A favored way organizations develop sustained competitive advantages through human resources is to

hire outside talent into the firm rather than to take years to develop the talent internally.

32. In most closely-held family firms formal succession plans are not needed because succession is passed

on through succeeding generations.

33. Succession planning tends to reduce turnover costs for organizations.

ESSAY

1. What is talent management and how is it linked to other HR functions? Why is it growing in

importance?

2. What is the difference between organization-centered and individual-centered career planning? Why

should HR departments facilitate individual-centered career planning if these individuals might not

stay with the organization for their entire career?

3. Why is succession planning important? What key mistakes are often made in succession planning?

4. Describe some methods of assessing the development needs of employees and their advantages and

disadvantages.

.

5. What are the main career challenges for women? What can organizations do to make better use of its

female talents?

economics data bank

economics data bank

Question

101) Suppose a perfectly competitive market is in long-run equilibrium and then there is a

permanent increase in the demand for that product. The new long-run equilibrium will have

A) a permanent decrease in supply.

B) fewer firms in the market.

C) the same number of firms in the market.

D) probably a different number of firms, but it is not possible to determine if there will be

more or fewer firms.

E) more firms in the market.

101)

102) The cranberry market is perfectly competitive. Reports that consuming cranberries can lead to

improved health result in a permanent increase in the demand for cranberries and an immediate

upward jump in the price of cranberries. As time passes, the price of cranberries ________ and

the initial firms' economic ________.

A) rises still higher; loss will be eliminated

B) rises still higher; profit will not change

C) falls; profit will not change

D) falls; loss will be increased

E) falls; profit will be eliminated

102)

103) In the long run, a perfectly competitive firm

A) makes zero economic profit.

B) makes an economic profit.

C) can make an economic profit, zero economic profit, or incur an economic loss.

D) incurs an economic loss.

E) can make either an economic profit or a normal profit.

103)

104) Juan's Software Service Company is in a perfectly competitive market. Juan has total fixed cost of

$25,000, average variable cost for 1,000 service calls is $45, and marginal revenue is $75. Juan's

makes 1,000 service calls a month. What is his economic profit?

A) $25,000 B) $45,000 C) $75,000 D) $5,000 E) $50,000

104)

105) A perfectly competitive firm definitely earns an economic profit in the short run if price is

A) equal to average total cost.

B) greater than average total cost.

C) greater than average variable cost.

D) equal to marginal cost.

E) greater than marginal cost.

105)

106) In the short run, a perfectly competitive firm

A) must make zero economic profit.

B) must make an economic profit.

C) None of the above answers is correct.

D) must incur an economic loss.

E) might make an economic profit, an economic loss, or a normal profit.

106)

107) The above figure shows a perfectly competitive firm. If the market price is $20 per unit, the firm

A) will stay open to produce and will earn a normal profit.

B) will definitely shut down to minimize its losses.

C) will stay open to produce and will incur an economic loss.

D) might shut down but more information is needed about the fixed cost.

E) will stay open to produce and will earn an economic profit.

107)

23

108) The above figure shows a perfectly competitive firm. If the market price is $15, the firm

A) is earning an economic profit.

B) is incurring an economic loss.

C) is earning a normal profit.

D) might shut down but more information is needed about theAVC.

E) will immediately shut down.

108)

109) A perfectly competitive firm is producing 50 units of output and selling at the market price of

$23. The firm's average total cost is $20. What is the firm's total cost?

A) $20 B) $150 C) $23 D) $1,000 E) $1,150

109)

110) Suppose that marginal revenue for a perfectly competitive firm is $20 . When the firm produces

10 units, its marginal cost is $20, its average total cost is $22, and its average variable cost is $17.

Then to maximize its profit in the short run, the firm

A) must decrease its output to increase its profit.

B) should shut down.

C) must increase its output to increase its profit.

D) should not change its production because it is already maximizing its profit and is earning

a normal profit.

E) should stay open and incur an economic loss of $20.

110)

111) Peter's Pencils is a perfectly competitive company producing pencils. Suppose Peter is

producing 1,000 pencils an hour. If the total cost of 1,000 pencils is $500, the market price per

pencil is $2, and the marginal cost is $2, then Peter

A) has an economic profit because marginal revenue is equal to marginal cost at this output

level.

B) should decrease his output to increase his profit.

C) is not maximizing his profit but is earning a normal profit anyway.

D) should increase his output to increase his profit.

E) is maximizing his profit and is earning an economic profit.

111)

112) In the short run, a perfectly competitive firm can experience which of the following?

i. an economic profit

ii. an economic loss but it continues to stay open

iii. an economic loss equal to its total fixed cost when it shuts down

A) i and ii

B) i, ii, and iii

C) i and iii

D) only i

E) ii and iii

112)

113) For a perfectly competitive corn grower in Nebraska, the marginal revenue curve is

A) the same as its demand curve.

B) upward sloping.

C) downward sloping.

D) vertical at the profit maximizing quantity of production.

E) U-shaped.

113)

114) Suppose a perfectly competitive firm's minimum average variable cost is $3 when it produces

50. If the price is $2 and the firm's marginal cost is $2, the firm should

A) continue to produce 50.

B) continue to operate, but to determine the amount of production needs more information

than is given.

C) continue to produce, but produce less than 50.

D) shut down.

E) continue to produce, but produce more than 50.

114)

115) A perfectly competitive firm will continue to operate in the short run when the market price is

below its average total cost if the

A) marginal cost is minimized.

B) price is at least equal to the minimum average variable cost.

C) price is also less than the minimum average variable cost.

D) marginal revenue is greater than marginal cost.

E) total fixed costs are less than total revenue.

115)

116) A perfectly competitive firm will shutdown when the price is just below the minimum point on

the

A) marginal revenue curve.

B) average fixed cost curve.

C) average total cost curve.

D) average variable cost curve.

E) marginal cost curve.

116)

117) The above figure illustrates a perfectly competitive firm. If the market price is $40 a unit, to

maximize its profit (or minimize its loss) the firm should

A) produce more than 10 and less than 30 units.

B) produce more than 30 units and less than 40 units..

C) produce 40 units.

D) shut down.

E) produce 30 units.

117)

118) In a perfectly competitive industry, when a firm is producing so that its total revenue equals its

total cost, the firm is

A) definitely not maximizing its profit.

B) earning zero economic profit, that is, earning a normal profit.

C) incurring an economic loss.

D) earning an economic profit.

E) None of the above answers is correct because the relationship between total revenue and

total cost has nothing to do with the firm's profit or loss.

118)

119) For a perfectly competitive firm, marginal revenue is

A) equal to the change in profit from selling one more unit.

B) less than the price.

C) equal to the price.

D) undefined because the firm's demand curve is horizontal.

E) greater than the price.

119)

120) If the market price of a product is $14 and all sellers are price takers, then which of the following

is correct?

A) Each seller can earn more total revenue by raising the price he or she charges above $14.

B) The demand curve for each seller's product is a downward-sloping straight line.

C) Each seller's total revenue is graphed as an upside-down U-shaped curve.

D) The demand curve for each seller's product is a downward-sloping but not necessarily a

straight line.

E) Each seller's total revenue line is graphed as an upward-sloping straight line.

120)

121) For the perfectly competitive broccoli producers in California, themarketdemand curve for

broccoli is

A) a horizontal line.

B) nonexistent.

C) downward sloping.

D) the same as the demand curve each firm faces.

E) upward sloping.

Question_Doc1_Dec12_Final

Question_Doc1_Dec12_Final

Question 1 out of 1 points
Which of the following statements is CORRECT?
.
.
Question 2
1 out of 1 points
The balance sheet and income statement shown below are for Pettijohn Inc.
Note that the firm has no amortization charges, it does not lease any assets,
none of its debt must be retired during the next 5 years, and the notes
payable will be rolled over.
Balance Sheet (Millions of $)
Assets 2010
Cash and securities $1,554.0
Accounts receivable 9,660.0
Inventories 13,440.0
Total current assets $24,654.0
Net plant and equipment 17,346.0
Total assets $42,000.0
Liabilities and Equity
Accounts payable $7,980.0
Notes payable 5,880.0
Accruals 4,620.0
Total current liabilities $18,480.0
Long-term bonds 10,920.0
Total debt $29,400.0
Common stock 3,360.0
Retained earnings 9,240.0
Total common equity $12,600.0
Total liabilities and equity $42,000.0
Income Statement (Millions of $) 2010
Net sales $58,800.00
Operating costs except depr’n $54,978.0
Depreciation $1,029.0
Earnings bef int and taxes (EBIT) $2,793.0
Less interest 1,050.0
Earnings before taxes (EBT) $1,743.0
Taxes $610.1
Net income $1,133.0
Other data:
Shares outstanding (millions) 175.00
Common dividends $509.83
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $77.69
What is the firm's total assets turnover?
Question 3
1 out of 1 points
Companies E and P each reported the same earnings per share (EPS), but
Company E's stock trades at a higher price. Which of the following statements
is CORRECT?
Question 4
1 out of 1 points
A new firm is developing its business plan. It will require $565,000 of assets,
and it projects $452,800 of sales and $354,300 of operating costs for the first
year. Management is quite sure of these numbers because of contracts with its
customers and suppliers. It can borrow at a rate of 7.5%, but the bank requires
it to have a TIE of at least 4.0, and if the TIE falls below this level the bank will
call in the loan and the firm will go bankrupt. What is the maximum debt ratio
the firm can use? (Hint: Find the maximum dollars of interest, then the debt
that produces that interest, and then the related debt ratio.)
Question 5
0 out of 1 points
The balance sheet and income statement shown below are for Pettijohn Inc.
Note that the firm has no amortization charges, it does not lease any assets,
none of its debt must be retired during the next 5 years, and the notes
payable will be rolled over.
Balance Sheet (Millions of $)
Assets 2010
Cash and securities $1,554.0
Accounts receivable 9,660.0
Inventories 13,440.0
Total current assets $24,654.0
Net plant and equipment 17,346.0
Total assets $42,000.0
Liabilities and Equity
Accounts payable $7,980.0
Notes payable 5,880.0
Accruals 4,620.0
Total current liabilities $18,480.0
Long-term bonds 10,920.0
Total debt $29,400.0
Common stock 3,360.0
Retained earnings 9,240.0
Total common equity $12,600.0
Total liabilities and equity $42,000.0
Income Statement (Millions of $) 2010
Net sales $58,800.00
Operating costs except depr’n $54,978.0
Depreciation $1,029.0
Earnings bef int and taxes (EBIT) $2,793.0
Less interest 1,050.0
Earnings before taxes (EBT) $1,743.0
Taxes $610.1
Net income $1,133.0
Other data:
Shares outstanding (millions) 175.00
Common dividends $509.83
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $77.69
What is the firm's cash flow per share?
Question 6
0 out of 1 points
Last year Urbana Corp. had $197,500 of assets, $307,500 of sales, $19,575 of
net income, and a debt-to-total-assets ratio of 37.5%. The new CFO believes a
new computer program will enable it to reduce costs and thus raise net
income to $33,000. Assets, sales, and the debt ratio would not be affected. By
how much would the cost reduction improve the ROE?
Question 7
1 out of 1 points
Bonner Corp.'s sales last year were $415,000, and its year-end total assets
were $355,000. The average firm in the industry has a total assets turnover
ratio (TATO) of 2.4. Bonner's new CFO believes the firm has excess assets that
can be sold so as to bring the TATO down to the industry average without
affecting sales. By how much must the assets be reduced to bring the TATO to
the industry average, holding sales constant?
Question 8
1 out of 1 points
Muscarella Inc. has the following balance sheet and income statement data:
Cash $ 14,000 Accounts payable $ 42,000
Receivables 70,000 Other current liabilities 28,000
Inventories 210,000 Total CL $ 70,000
Total CA $294,000 Long-term debt 70,000
Net fixed assets 126,000 Common equity 280,000
Total assets $420,000 Total liab. and equity $420,000
Sales $280,000
Net income $ 21,000
The new CFO thinks that inventories are excessive and could be lowered
sufficiently to cause the current ratio to equal the industry average, 2.70, without
affecting either sales or net income. Assuming that inventories are sold off and not
replaced to get the current ratio to the target level, and that the funds generated
are used to buy back common stock at book value, by how much would the ROE
change?
Question 9
1 out of 1 points
Last year Altman Corp. had $205,000 of assets, $303,500 of sales, $18,250 of
net income, and a debt-to-total-assets ratio of 41%. The new CFO believes the
firm has excessive fixed assets and inventory that could be sold, enabling it to
reduce its total assets to $152,500. Sales, costs, and net income would not be
affected, and the firm would maintain the 41% debt ratio. By how much would
the reduction in assets improve the ROE?
Question 10
1 out of 1 points
The balance sheet and income statement shown below are for Pettijohn Inc.
Note that the firm has no amortization charges, it does not lease any assets,
none of its debt must be retired during the next 5 years, and the notes
payable will be rolled over.
Balance Sheet (Millions of $)
Assets 2010
Cash and securities $1,554.0
Accounts receivable 9,660.0
Inventories 13,440.0
Total current assets $24,654.0
Net plant and equipment 17,346.0
Total assets $42,000.0
Liabilities and Equity
Accounts payable $7,980.0
Notes payable 5,880.0
Accruals 4,620.0
Total current liabilities $18,480.0
Long-term bonds 10,920.0
Total debt $29,400.0
Common stock 3,360.0
Retained earnings 9,240.0
Total common equity $12,600.0
Total liabilities and equity $42,000.0
Income Statement (Millions of $) 2010
Net sales $58,800.00
Operating costs except depr’n $54,978.0
Depreciation $1,029.0
Earnings bef int and taxes (EBIT) $2,793.0
Less interest 1,050.0
Earnings before taxes (EBT) $1,743.0
Taxes $610.1
Net income $1,133.0
Other data:
Shares outstanding (millions) 175.00
Common dividends $509.83
Int rate on notes payable & L-T bonds 6.25%
Federal plus state income tax rate 35%
Year-end stock price $77.69
What is the firm's P/E ratio?

general business data bank

general business data bank

Question

1. Personal influence carries especially great weight with consumers in two situations. The first is with products that are expensive, risky, or purchased infrequently. The second is where the product ________.

a. suggests something about the user’s ethnic background

b. suggests something about the user’s education

c. suggests something about the user’s family

d. suggests something about the user’s financial wealth

e. suggests something about the user’s status or taste

2. Nonpersonal channels are communications directed to more than one person and include media, sales promotions, events and experiences, and ________.

a. Internet access

b. coupons

c. direct exposure

d. guerilla tactics

e. public relations

3. Most of the recent growth of nonpersonal channels has taken place through ________.

a. display media

b. events and experiences

c. network media

d. public relations

e. sales promotions

4. Mass communications affect personal attitudes and behavior through a two-step process. Ideas often flow from radio, television, and print to opinion leaders, and from these to the less ________-involved population groups.

a. media

b. advertising

c. informed

d. involved

e. none of the above

5. The two-step flow of information challenges the notion that consumption styles ________ a “trickle-down” or “trickle-up” effect from mass media.

a. are secondarily influenced by

b. are affected by

c. start with

d. are primarily influenced by

e. originate with


6. The four common methods that companies use to decide on a promotion budget include the affordable method, the percentage-of-sales method, ________, and the objective-and-task method.

a. financial method

b. incremental growth method

c. zero-based budgeting method

d. competitive-parity method

e. last year’s budget method

7. Many companies set promotion expenditures at a specified percentage of current or anticipated sales, or of the sales price. This method of budgeting is called ________.

a. objective-and-task method

b. percentage-of-sales method

c. affordable method

d. competitive parity method

e. none of the above

8. Companies must allocate the marketing communications budget over the eight major modes of communication, including—advertising, sales promotion, public relations, events, sales force, interactive marketing, word-of-mouth, and ________.

a. incentives

b. couponing

c. integrated marketing communications

d. Internet marketing

e. direct marketing

9. Some companies set their promotion budget to achieve share-of-voice parity with competitors. This is referred to as the ________ of promotions budgeting.

a. objective-task method

b. percentage-of-sales method

c. competitive-parity method

d. affordable method

e. comparable method

10. Marketing functions must be coordinated to ensure ________ among communications tools.

a. significant costs

b. power

c. importance

d. incremental costs

e. substitutability

11. Advertising can be used to build up a long-term image for a product and usually contains the qualities of impersonality, amplified expressiveness, and ________.

a. invitation

b. motion

c. sound and sight

d. pervasiveness

e. intrusion

12. Sales promotions tools offer three distinctive benefits to marketers. Among these benefits are communication, invitation, and ________.

a. credibility

b. impersonality

c. exclusion

d. inclusion

e. incentive

13. The appeal of public relations and publicity is based on three distinctive qualities. These include ________, the ability to catch buyers off guard, and dramatization.

a. invitation

b. free

c. high credibility

d. exposure

e. low cost

14. Personal selling is the most effective tool at later stages of the buying process, particularly in building up buyer preference, conviction, and action. Personal selling has three distinctive qualities. These are personal interaction, response, and ________.

a. customization

b. dramatization

c. involvement

d. relevance

e. cultivation

15. ________ is/are the most effective tool at later stages of the buying process, particularly in building up buyer preference, conviction, and action.

a. Direct and interactive marketing

b. Events and experiences

c. Word-of-mouth marketing

d. Personal selling

e. Public relations


Companies must consider several factors in developing their communications mix: type of product market, consumer readiness to make a purchase, and the stage in the ________.

f. product life cycle

g. marketing mix

h. advertising mix

i. buying process

j. none of the above

16. An effectively trained company sales force can make four important contributions: enthusiasm building, missionary selling, key account management, and ________.

a. customer contacts

b. relationship selling

c. direct sales contacts

d. increased stock position

e. account management

17. Communication tools vary in cost-effectiveness at different stages of buyer readiness. ________ and publicity play the most important role in the awareness-building stage.

a. Direct marketing

b. Sales promotion

c. Advertising

d. Personal selling

e. “Buzz”

18. Senior managers want to know the outcomes and revenues resulting from their communications investments. Too often, however, their communications directors supply only ________ and expenses.

a. inputs

b. outputs

c. measures

d. ads

e. none of the above

19. In measuring the effectiveness of a firm’s communications investment, ultimately ________ measures capture the real payoff.

a. behavior-change

b. purchase

c. action

d. inaction

e. none of the above


Integrated marketing communications is a concept of marketing communications planning that recognizes the added value of a ________ plan.

f. integrated

g. coherent

h. complete

i. comprehensive

j. none of the above

20. A multiple media campaign deployed within a tightly defined time frame can increase message _________.

a. delivery and reach

b. awareness and content

c. reach and impact

d. impact and awareness

e. content and delivery

21. A one-time mailing offering a cookware item is an example of a ________.

a. single-vehicle, single-stage campaign

b. direct campaign

c. single-vehicle, multiple-stage campaign

d. multiple-vehicle, multiple-stage campaign

e. none of the above

22. Which of the following is NOT one of the advantages of having an integrated marketing communications program?

a. It forces management to think about how the company communicates.

b. It forces management to think about every way the customer comes in contact with the company.

c. It produces greater sales impact.

d. It increases consumer involvement.

e. It produces stronger message consistency.

23. Communication option are often more effective when used in tandem. ________ relates to the extent to which different associations and linkages are emphasized across communication options.

a. Coverage

b. Contribution

c. Commonality

d. Complementarity

e. Versatility


24. In assessing the collective impact of an IMC program, the overriding goal is to create the most effective and efficient communications program possible. Which of the following is NOT one of the six criteria used to help determine whether communications are truly integrated?

a. Clutter

b. Coverage

c. Contribution

d. Commonality

e. Complementarily

general business data bank

general business data bank

Question

multiple choice questions

1. Persons who favor the creation of a National Biotech Agency to regu­late the production of genetically altered agricultural products should con­centrate their lobbying ef­forts on

a. Congress.

b. federal administrative agencies that oversee agricultural products.

c. the United States Supreme Court.

d. the president of the United States.

2. The Securities and Exchange Commission, like other federal administra­tive agencies, is part of the government’s

a. administrative branch.

b. executive branch.

c. judicial branch.

d. legislative branch.


3. Congress leaves it to the Bureau of Land Management (BLM) to oversee the promulgation of detailed regulations in areas under the BLM’s juris­diction. This is

a. divine right.

b. the delegation doctrine.

c. gap-filling power.

d. unconstitutional conduct.

4. The National Highway Traffic Safety Administration utilizes notice-and-comment rulemaking. This process begins with

a. a request to Congress to enact enabling legislation.

b. the filing of a complaint against a charged party.

c. the publication of a notice of proposed rulemaking.

d. the solicitation of public comments.

5. The Consumer Product Safety Commission issues a rule. Like the rules of other federal administrative agencies, this rule is compiled in

a. the Administrative Register of the Federal Government.

b. the Code of Federal Regulations.

c. the Federal Rules of Civil Procedure.

d. the United States Code.

6. Alpha Corporation challenges a demand by the U.S. Bureau of Immigration Services (BIS) for some of Alpha’s business records on the basis that it is too burdensome to make copies of the documents. Alpha will probably be

a. allowed to ignore the demand.

b. ordered to comply with the demand.

c. penalized by the BIS for impeding the investigation.

d. required to double the number of copies to review the challenge.


7. The Internal Revenue Service (IRS) wants to review the financial re­ports of Jewel Corporation. The IRS can gain access to the reports through

a. a subpoena only.

b. Jewel’s consent only.

c. Jewel’s consent or a subpoena.

d. neither Jewel’s consent nor a subpoena.

8. Dina isa witness in a contro­versy involving the Environmental Protection Agency. Dina can be compelled to appear before an adminis­trative law judge if she is served with

a. an order for specific performance.

b. a rule for parol evidence.

c. a subpoena ad testificandum.

d. a subpoena duces tecum.

9. The U.S. Bureau of Alcohol, Tobacco and Firearms conducts searches of certain businesses. This agency and other administrative agencies can conduct warrantless searches in

a. all industries.

b. highly regulated industries.

c. no industries.

d. newly regulated industries only.

10. The National Credit Union Administration (NCUA) discovers that Out-State Credit Union is violating an NCUA regulation. If this situation is resolved like most such disputes, the outcome will be

a. a negotiated settlement.

b. a trial and a fine.

c. a trial and an appeal to a higher authority.

d. a trial and the dissolution of the business.


11. The functions of the Environmental Protection Agency, like those of most adminis­trative agencies, include

a. adjudication.

c. declaration.

b. enunciation.

d. pronunciation.

12. Regional Distributors, Inc., has been ordered to appear at a hearing be­fore an administrative law judge of the National Labor Relations Board. A significant difference between a trial and an administrative hearing is that

a. attorneys are not allowed to attend administrative hearings.

b. clients are not allowed to communicate with their attorneys dur­ing adminis­trative hearings.

c. hearsay can be introduced as evidence in an administrative hearing.

d. all of the above.

13. Digital Corporation wants to have a U.S. Department of Commerce regu­lation reviewed. Before a court will hear Digital’s request for review, the company must

a. appeal simultaneously to the agency and the court.

b. bypass all administrative remedies and appeal directly to the court.

c. exhaust all administrative remedies.

d. ignore the regulation and wait for an agency to try to enforce it.

14. In reviewing the actions of the Environmental Protection Agency and other agencies, the courts

a. are usually reluctant to review questions of fact.

b. rarely defer to the technical expertise of administrative agencies.

c. often rule on the merits of policy determinations.

d. all of the above.

15. Jay seeks information about Kim and other well-known businesspersons under the Freedom of Information Act. To obtain the informa­tion, Jay must

a. agree not to reveal any trade secrets.

b. describe the information.

c. get a court order.

d. have Kim’s and the others’ permission.

16. A failure of the Federal Bureau of Investigation to comply with a request under the Freedom of Information Act (FOIA) may be challenged in

a. a federal district court.

b. a hearing before the U.S. Freedom of Information Agency.

c. a meeting with Congress’s FOIA subcommittee.

d. a special conference with the president of the United States.

17. Closed meetings of the Federal Communications Commission and other federal administrative agencies are permitted when

a. the subject of the meeting concerns accusing a person of a crime.

b. open meetings would frustrate the implementation of future agency actions.

c. the subject of the meeting involves matters relating to future liti­ga­tion or rulemaking.

d. all of the above.

18. The U.S. Social Security Administration is a federal agency. The Iowa Department of Social Services is a parallel state agency.If these agen­cies’ actions conflict

a. the federal agency’s actions will prevail.

b. the state agency’s actions will prevail.

c. the two agencies’ actions will be given equal weight.

d. the two agencies’ actions will cancel each other.


accounts data bank

accounts data bank

Question 16.

The ability to meet short-term obligations and to efficiently generate revenues is called:

A.

Liquidity and efficiency.

B.

Solvency.

C.

Profitability.

D.

Market prospects.

E.

Creditworthiness.

17.

Industry standards for financial statement analysis:

A.

Are based on a company's prior performance.

B.

Are set by the government.

C.

Are set by the financial performance and condition of the company's industry.

D.

Are based on rules of thumb.

E.

Compare a company's income with the prior year's income.

18.

A complete income statement potentially has the following sections:

A.

Items from continuing operations and earnings per share for a corporation.

B.

Income or loss from operating a discontinued segment for the current period.

C.

The loss from disposing of the discontinued segment's net assets.

D.

Extraordinary items.

E.

Continuing operations, discontinued segments, extraordinary items, changes in accounting principles, and earnings per share for a corporation.

19.

A company's sales in 2009 were $250,000 and in 2010 were $287,500. Using 2009 as the base year, the sales trend percent for 2010 is:

A.

87%.

B.

100%.

C.

115%.

D.

15%.

E.

13%.

($287,500/$250,000) x 100 = 115%

20.

Comparative financial statements in which each amount is expressed as a percentage of a base amount, and in which the base amount is expressed as 100%, are called:

A.

Comparative statements.

B.

Common-size comparative statements.

C.

General-purpose financial statements.

D.

Base line statements.

E.

Index statements.

21.

A corporation reported cash of $14,000 and total assets of $178,300. Its common-size percent for cash equals:

A.

.0785%.

B.

7.85%.

C.

12.73%.

D.

1273%.

E.

7850%.

($14,000/$178,300) x 100 = 7.85%

22.

Current assets minus current liabilities is:

A.

Profit margin.

B.

Financial leverage.

C.

Current ratio.

D.

Working capital.

E.

Quick assets.

23.

Annual cash dividends per share divided by market price per share is the:

A.

Price-earnings ratio

B.

Price-dividends ratio.

C.

Profit margin.

D.

Dividend yield ratio.

E.

Earnings per share.

24.

The average number of times a company's inventory is sold during an accounting period, calculated by dividing cost of goods sold by the average inventory balance, is the:

A.

Accounts receivable turnover.

B.

Inventory turnover.

C.

Days' sales uncollected.

D.

Current ratio.

E.

Price earnings ratio.

25.

A company had a market price of $37.50 per share, earnings per share of $1.25, and dividends per share of $0.40. Its price-earnings ratio equals:

A.

3.1.

B.

30.0.

C.

93.8.

D.

32.0.

E.

3.3.

26.

A company reports basic earnings per share of $3.50, cash dividends per share of $0.75, and a market price per share of $64.75. The company's dividend yield equals:

A.

1.16%.

B.

2.14%.

C.

4.67%.

D.

5.41%.

E.

18.50%.

general business data bank

general business data bank

Question

Use the table for the question(s) below.

Consider the following two projects:

Project

Year 0

Cash Flow

Year 1

Cash Flow

Year 2

Cash Flow

Year 3

Cash Flow

Year 4

Cash Flow

Discount Rate

A

-100

40

50

60

N/A

.15

B

-73

30

30

30

30

.15


18)


Assume that projects A and B are mutually exclusive. The correct investment decision and the best rational for that decision is to?


A)


Invest in project A since NPVB< NPVA


B)


Invest in project B since IRRB> IRRA


C)


Invest in project B since NPVB> NPVA


D)


Invest in project A since NPVA> 0




19)


The incremental IRR of Project B over Project A is closest to:


A)


12.6%


B)


23.3%


C)


1.7%


D)


17.3%


:



Use the table for the question(s) below.

Consider the following two projects:

Project

Year 0

C/F

Year 1

C/F

Year 2

C/F

Year 3

C/F

Year 4

C/F

Year 5

C/F

Year 6

C/F

Year 7

C/F

Discount

Rate

Alpha

-79

20

25

30

35

40

N/A

N/A

15%

Beta

-80

25

25

25

25

25

25

25

16%


20)


Assume that projects Alpha and Beta are mutually exclusive. The correct investment decision and the best rational for that decision is to?


A)


Invest in project Beta since NPVBeta> 0


B)


Invest in project Alpha since NPVBeta< NPVAlpha


C)


Invest in project Beta since IRRB> IRRA


D)


Invest in project Beta since NPVBeta> NPVAlpha> 0


:



Use the table for the question(s) below.

Consider two mutually exclusive projects with the following cash flows:

Project

C/F0

C/F1

C/F2

C/F3

C/F4

C/F5

C/F6

A

$(41,215)

$12,500

$14,000

$16,500

$18,000

20,000

N/A

B

$(46,775)

$15,000

$15,000

$15,000

$15,000

$15,000

$15,000


WS1)


You are considering using the incremental IRR approach to decide between the two mutually exclusive projects A & B. How many potential incremental IRRs could there be?


A)


3


B)


0


C)


2


D)


1


:




WS2)


What is the incremental IRR for project B over project A? Would you feel comfortable basing your decision on the incremental IRR?


.



WS3)


Assuming that the discount rate for project A is 16% and the discount rate for B is 15%, then given that these are mutually exclusive projects, which project would you take and why?


6.4 Project Selection with Resource Restraints


Use the table for the question(s) below.

Consider the following list of projects:

Project

Investment

NPV

A

135,000

6,000

B

200,000

30,000

C

125,000

20,000

D

150,000

2,000

E

175,000

10,000

F

75,000

10,000

G

80,000

9,000

H

200,000

20,000

I

50,000

4,000





21)


Assuming that your capital is constrained, what is the fifth project that you should invest in?


A)


Project H


B)


Project I


C)


Project B


D)


Project A





22)


Assuming that your capital is constrained, so that you only have $600,000 available to invest in projects, which project should you invest in and in what order?


A)


CBFH


B)


CBGF


C)


BCFG


D)


CBFG




23)


Assume that your capital is constrained, so that you only have $600,000 available to invest in projects. If you invest in the optimal combination of projects given your capital constraint, then the total NPV for all the projects you invest in will be closest to:


A)


$65,000


B)


$80,000


C)


$69,000


D)


$111,000


:





business managment data bank

business managment data bank

Question

SHORT ANSWER QUESTIONS

143. A strategy intended to achieve fair employment by urging employers to hire certain groups of people who were discriminated against in the past is referred to as _______.

144. The law that requires the same pay for men and women who do the same job in the same organization is called the _______.

145. _______ is the section of the Civil Rights Act of 1964 that applies to employment decisions and mandates that employment decisions not be based on race, color, religion, sex, or national origin.

146. _______ is discrimination that occurs when individuals are treated differently because of their membership in a protected class.

147. Discrimination that occurs when the equal application of an employment standard has an unequal effect on one or more protected classes is referred to as _______.


148. A characteristic that must be present in all employees for a particular job is called a(n) _______.

)

149. _______ is harassment that occurs when sexual activity is required in return for getting or keeping a job or job-related benefit.

150. Fines awarded to a plaintiff in order to punish the defendant are called _______.

151. A policy with which all federal agencies and organizations doing business with the federal government must comply is referred to as a(n) _______.

152. The law forbidding employment discrimination against people with disabilities who are able to perform the essential functions of the job with or without reasonable accommodation is the _______.

)

153. Job duties that each person in a certain position must do or must be able to do to be an effective employee are referred to as _______.


154. _______ is an action taken to accommodate the known disabilities of applicants or employees so that disabled persons enjoy equal employment opportunity.

155. _______ is an attempt to reach a negotiated settlement between the employer and an employee or applicant in an EEO case.

156. The federal agency responsible for monitoring and enforcing the laws and executive orders that apply to the federal government and its contractors is referred to as the _______.

157. _______ is discrimination against a nonprotected-class member resulting from attempts to recruit and hire members of protected classes.

general business data bank

general business data bank

Question

104. Nike lets consumers customize athletic shoes for $10 more. A shopper with two different size feet can even get a non-matching pair. This would be an example of which of the following?

a. Mass marketing.

b. Environmental marketing.

c. Mass customization.

d. Individualization.

e. Niche marketing.

105. 3M makes it easy for dialog to occur with its customers. 3M claims that over two-thirds of its product improvement ideas come from listening to ________.

a. customer suggestions

b. entrepreneurial product ideas

c. customer complaints

d. media feedback

e. customer reactions to competitive products

106. With respect to the CRM Imperative, “you get it” when ________.

a. you eliminate all your strong competitors

b. you have selected the most beneficial promotion channels

c. you have learned how to outsource

d. you develop a Web presence

e. you have identified your most valuable customers

107. The skillful use of database marketing and ________ has made catalog house Fingerhut one of the nation’s largest direct-mail marketers.

a. everyday low prices

b. expanded home delivery options

c. relationship building

d. competitor’s mistakes

e. retailer alliances


Short Answer

108. What do managers believe is their company’s only true “profit center”?

109. Customer delivered value is based on two components. What are those components?

110. What is the definition for customer perceived value (CPV)?

.

111. Using European automobile giant Volvo as your illustration, create a value proposition for the company. Be sure to base your proposition on established company core positions and values.

135. Define the termquality.

136. Sherden suggests amending the 20-80 rule to read “the 20-80-30 rule.” Interpret the meaning of “20-80-30.”

137. What are the three ways that customer profitability can be assessed?

138. What are the four classifications (tiers) of customers in customer profitability analysis using Activity-Based Costing?

139. According to Rust, Zeithaml, and Lemon, what are the three drivers of customer equity?

140. Explain the concept of mass customization.

Level of difficulty: Easy

141. What is a customer touch point?

142. If characteristics of mass marketing were average customer, share of market, and customer attraction, what would be the associated one-to-one marketing characteristics that would match?

143. Markets can be characterized by their long-term buying dynamics and how easily and often customers can enter and leave. List and briefly characterize three such markets.

144. Explain the concept of proactive marketing.

145. Explain how a company frequency program might work.

146. Using information provided in the text, create three suggestions for creating structural ties with a customer.

147. Describe the process of database marketing.

148. According to information provided in the text, give one of the three forms of estimate with respect to increasing customer share of requirements.

149. Give an illustration of how a company can use a customer database to reactivate customer purchases.

150. According to information provided in the text, what are the four main perils of CRM?