Important Mcqs Regarding Nts Tests

Problem #144311
Financial Analysis Multiple Choice

1. Common stock of corporations may be listed on stock exchanges or traded:
a. over-the-counter.
b. by brokers who own an inventory of shares from which they buy/sell.buy/sell.
c. between directors of the corporation.
d. on the New York Stock Exchange.
2. All but one of the following is known as a financial market?
a. foreign exchange market
b. pension fund market
c. money market
d. fixed-income market
3. The first time a security is sold it is in the _______ market; subsequent trading of the security is in
the ______ market.
a. money; capital
b. capital; money
c. banking; secondary
d. primary; secondary
4. A common-size balance sheet portrays the firm's accounts as a percent of the:
a. industry's assets.
b. firm's net income.
c. firm's total assets.
d. strongest competitor's assets.
5. Which of the following actions will improve a firm's current ratio if it is now less than 1.0?
a. Convert marketable securities to cash.
b. Pay accounts payable with cash.
c. Buy inventory on credit.
d. Sell inventory at cost.
6. When Tri-C Corp. compares its ratios to industry averages, it has a higher current ratio, an
average quick ratio, and a low inventory turnover. What might you assume about Tri-C?
a. Its cash balance is too low.
b. Its cost of goods sold is too low.
c. Its current liabilities are too low.
d. Its average inventory is too high.
7. When a firm finances long-term assets with short-term sources of funding, it:
a. reduces the risk of cash shortage.
b. will have higher interest expenses.
c. improves the leverage ratio.
d. is ignoring the principle of matched maturities.
8. Trade credit is created when:
a. customers return unacceptable goods.
b. final consumers purchase goods on credit.
c. companies purchase goods on credit.
d. current assets exceed current liabilities.
9. What is the total carrying cost for an inventory of 200 widgets if the per-widget carrying cost is $4,
the cost per order is $14, and there are 5 orders per year?
a. $400
b. $470
c. $800
d. $870
10. A firm's safety stock represents the:
a. inventory having passed quality-control inspection.
b. largest order size that retains minimum order costs.
c. inventory of most frequently ordered items.
d. reorder point that considers lags and uncertainties.
11. Which statement is true about terms of trade credit of 2/10, net 30?
a. A 10% cash discount is offered for payment before 30 days.
b. A 2% cash discount can be taken for payment before the 10th of the following month.
c. A 10% cash discount can be taken if paid by the second day after invoicing.
d. No cash discount is offered after the eleventh day.
12. At what point does a customer's unpaid account become delinquent when the terms of sale are
2/10, net 60?
a. 11 days after the sale.
b. 31 days after the sale.
c. 61 days after the sale.
d. 71 days after the sale.
13. Which primary financial statement shows a business enterprise's resources, obligations, and
equities?
a. Statement of cash flows
b. Balance sheet
c. Income statement
d. Statement of retained earnings
14. Several organizations have developed codes of ethics for accountants. Which of the following
organizations did NOT develop a code of ethics for accountants?
a. American Institute of Certified Public Accountants (AICPA)
b. Institute of Management Accountants (IMA)
c. Securities Exchange Commission (SEC)
d. All of the above developed a code of ethics for accountants
15. The functions of an accounting system include all of the following except:
a. Gather marketing data
b. Handle routine bookkeeping tasks
c. Structure information so that it can be used to evaluate performance of a business
d. Analyze transactions
16. In which form of business is income taxed twice: once when the business earns it and again
when it is distributed to owners?
a. Proprietorship
b. Partnership
c. Corporation
d. Agency
17. Which of the following is NOT normally considered to be an asset?
a. Retained earnings
b. Cash
c. Buildings
d. Accounts receivable
18. If a company has $15,000 in assets and $10,000 in equities, then liabilities are:
a. $25,000
b. $10,000
c. $5,000
d. $0
19. When preparing a statement of cash flows, activities associated with buying and selling assets
are:
a. Operating activities
b. Investing activities
c. Financing activities
d. Revenue activities
20. In order for the data of a transaction to be accurately represented, an assumption must be made
that the transaction was conducted between buyer and seller with no bias toward either party. This
concept is called the:
a. Arm's-length transaction assumption
b. Separate entity concept
c. Going concern assumption
d. Monetary measurement concept
21. A company's retained earnings balance would increase by
a. Net income
b. Expenses
c. Investments by owners
d. The declaration and payment of dividends
22. Bosso Company repaid a note payable of $20,000 and the interest due of $400. The journal
entry to record this transaction would include a
a. Debit to cash
b. Credit to notes payable
c. Debit to interest expense
d. Credit to interest revenue
23. After preparing its trial balance, the Wright-Way Company found that total debits equaled total
credits. This equality would assure the company that
a. There are no errors in the accounting records
b. No transactions were omitted from the accounting records
c. No transactions were recorded incorrectly
d. The accounting equation is in balance
24. No matter the type of adjusting entry, which of the following accounts would not be affected by
an adjusting entry?
a. Cash
b. Unearned revenue
c. Rent expense
d. Prepaid insurance
25. On October 1, 2005, the Wolfzorn Company was paid $14,000 for a job that would not be
completed until March 1, 2006. On the date they were paid, Wolfzorn credited a revenue account
and debited cash. If Wolfzorn fails to make an adjusting entry on December 31, 2005, the effects will
be
a. Understatement of revenues and overstatement of assets
b. Understatement of revenues and overstatement of liabilities
c. Overstatement of revenues and overstatement of liabilities
d. Overstatement of revenues and understatement of liabilities
26. Which of the following is NOT a nominal account?
a. Advertising expense
b. Consulting revenue
c. Rent expense
d. Retained earnings
27. One of the weaknesses of common-size financial statements is that they don't help eliminate
difficulties in doing comparisons across time or between firms arising from differences in the actual
dollar amounts of financial statement items.
a. True
b. False
28. Higher and higher current ratios are always desirable.
a. True
b. False
29. Recording $500 of advertising expense as prepaid rent will result in
a. An understatement of assets and an understatement of expenses
b. An overstatement of assets and an overstatement of expenses
c. An overstatement of assets and an understatement of expenses
d. None of the above
30. If an employee steals cash from a company and tries to cover up his actions by recording a
fictitious debit to Miscellaneous Expense and a credit to Cash, then
a. Expenses will be understated
b. Net income will be overstated
c. Net income will be understated
d. Net income will be stated correctly
31. Which of the following is true regarding an external auditor's responsibility to find fraud?
a. Auditors are required to find all fraud
b. Auditors must provide reasonable assurance that they have found all fraud
c. Auditors must provide reasonable assurance that they have found fraud that is material
d. Auditors have no responsibility to find fraud
32. Clancy Company sold $12,000 of merchandise to Lee Jones, with terms 2/10, n/30. If Lee paid
for one-third of the merchandise within the discount period and two-thirds after the discount period,
he paid a total of
a. $12,000
b. $11,760
c. $11,920
d. $11,852
33. When the allowance method of recognizing bad debt expense is used, which of the following
accounts would not be used to write off an account that is uncollectible?
a. Bad debt expense
b. Accounts receivable
c. Allowance for bad debts
d. All of the above accounts are used in the allowance method
34. The ratio that measures how many times during a year accounts receivable are collected is the
a. average collection period
b. accounts receivable turnover
c. asset turnover
d. none of the above
35. The type of company that has three inventories and more complex inventory accounting is
a. Merchandising companies
b. Service companies
c. Manufacturing companies
d. Wholesale companies
36. If a firm's beginning inventory is $70,000, goods purchased during the period cost $260,000, and
the cost of goods sold is $300,000, what is the ending inventory?
a. $30,000
b. $50,000
c. $40,000
d. $90,000
37. Which of the following statements is true under the perpetual inventory method?
a. Freight-In is subtracted from the inventory account
b. Freight-In is added to the inventory account
c. Freight-In is used only with the perpetual inventory method.
d. Freight-In is added to purchases in order to derive net purchases
38. An example of a post-employment benefit is a
a. Stock option
b. Bonus
c. Pension fund
d. Severance pay
39. Many companies collect sales tax at the time of sale. Between the collection of this tax and its
payment to a government, the tax is classified as a(n)
a. Current liability
b. Long-term liability
c. Asset
d. Expense
40. During the year, Samson Company earned revenues of $228,000 and incurred $196,000 for
various operating expenses. There are 2,500 shares of stock outstanding. Earnings per share is
a. $12.50
b. $12.80
c. $ 8.80
d. $ 8.50
41. Insurance on the factory building would be part of
a. Manufacturing overhead
b. Indirect labor
c. Direct material
d. Operating expenses
42. Another term for incremental costs is
a. Sunk costs
b. Differential costs
c. Fixed costs
d. Period costs
43. In a manufacturing company, advertising expense would best be classified as a
a. Direct expense
b. Manufacturing overhead
c. Period expense
d. Product expense
44. If activity increases, which of the following statements about cost behavior is true?
a. Fixed cost per unit will increase
b. Variable cost per unit will increase
c. Fixed cost per unit will decrease
d. Variable cost per unit will decrease
45. Sales income minus total fixed costs is equal to
a. Net income
b. Contribution margin
c. Gross margin
d. None of the above
46. If variable costs are $20 per unit, revenues are $40 per unit, and fixed costs are $10,000, the
break-even point is
a. 1,000 units
b. 500 units
c. 250 units
d. 100 units
47. Just-in-time (JIT) inventory systems have dramatically changed the cost structures of many
American manufacturing companies. All but which of the following are effects from using a JIT
system?
a. Reduced inventory balances
b. Decreased product costs
c. Increased inventory handling costs
d. More efficient production
48. If demand is 10,000 units, cost of carry is $2 per unit, and cost of placing an order is $100, what
is the EOQ?
a. 1,000 units
b. 100 units
c. 20,000 units
d. 2,000 units
49. The major difference between traditional product costing and activity-based costing relates to the
assignment of which type of cost?
a. Direct labor
b. Direct material
c. Manufacturing overhead
d. All of the above
50. Which of the following is not a cost of quality?
a. appraisal
b. prevention
c. failure
d. all of the above

Finance 324 Final Exam Version 9 1. The primary users of external financial reports are a. Those who
direct day to day operations of a business enterprise b. Individuals who have an economic interest in
the firm but who are not part of management c. Managers of an enterprise who plan, implement
plans, and control costs d. None of the above 2. If a company has $15,000 in assets and $10,000 in
equities, then liabilities are a. $25,000 b. $10,000 c. $5,000 d. $0 3. A revenue account is increased
with a. Debits b. Credits c. Equities d. None of the above 4. Expense items that have been incurred
during a period but not recorded by the end of the period are: a. Prepaid liabilities b. Prepaid expenses
c. Deferred expenses d. Unrecorded liabilities 5. A purchase of $900 of supplies on account was
journalized and posted as $900 debit to Supplies on Hand and a $900 credit to Accounts Receivable.
The entry to correct this error is a. A $900 debit to accounts payable and a $900 credit to accounts
receivable b. A $900 debit to supplies on hand and a $900 credit to accounts payable c. A $900 debit
to accounts receivable and a $900 credit to accounts payable d. A $900 debit to accounts receivable
and a $900 credit to supplies on hand 6. The retained earnings balance of Werner Company was
$46,800 on January 1, 2005. Net income for 2005 was $26,480. If retained earnings had a credit
balance of $21,000 after closing entries were posted on December 31, 2005 and if additional stock of
$13,000 was issued during the year, dividends paid during 2005 were: a. $38,800 b. $52,280 c.
$65,280 d. none of the above 7. If net purchases are $200,000 and beginning and ending accounts
payable balances are $25,000 and $20,000, respectively, cash paid for purchases is a. $195,000 b.
$200,000 c. $205,000 d. $210,000 8. The tools of financial statement analysis are not static they
have, and will continue, to evolve as the nature of doing business and/or the needs of financial
statement users change a. True b. False 9. Which of the following costs would be LEAST likely to be a
fixed cost: a. Plant property taxes b. Plant supervisors salary c. Utilities costs d. Executive salaries 10.
Sales income minus total fixed costs is equal to: a. Net income b. Contribution margin c. Gross margin
d. None of these choices

1. Which of the following statements regarding the calculation of the lessee's depreciation expense for
a capital lease is true? (Points: 4)
a. The bargain purchase option price is deducted from the original cost capitalized, and the difference
is allocated over the estimated economic life of the asset.
b. The guaranteed residual value is deducted from the original cost capitalized, and the difference is
allocated over the estimated economic life of the asset.
c. The unguaranteed residual value is deducted from the original cost capitalized, and the difference is
allocated over the term of the lease.
d. The guaranteed residual value is deducted from the original cost capitalized, and the difference is
allocated over the term of the lease.

2. An operating lease should be recorded in the lessee's accounts at the inception of the lease at an
amount equal to (Points: 4)
a. the present value of the minimum lease payments less the executory costs included in the
minimum lease payments
b. the total value of the future rental payments less any estimated contingent payments
c. the total value of the future rental payments less any executory payments included in the future
payments
d. none of these

3. The following information relates to the Stockton Company:

Paid note payable $ 150
Bought equipment 260
Depreciation expense 500
Net income 6,000
Paid dividends 500
Issued bonds payable 1,100
Issued common stock 900
Sold land 2,400

What is the net cash provided by financing activities? (Points: 4)
a. $1,350
b. $1,850
c. $2,350
d. $5,850

4. The following information relates to the Red Rocket Company:

Increase in accounts receivable $ 80
Increase in bonds payable 1,000
Decrease in inventory 75
Net income 10,000
Amortization of premium on bonds payable 260
Increase in income taxes payable 60
Depreciation expense 2,000
Decrease in accounts payable 380

What is the net cash provided by operating activities? (Points: 4)
a. $9,065
b. $11,415
c. $11,935
d. $12,415

5. A cash flow statement is one of the basic financial statements that is required under

IFRS GAAP (Points: 4)
a. No Yes
b. No No
c. Yes No
d. Yes Yes

6. When preparing a statement of cash flows under the indirect method, an increase in ending
accounts receivable over beginning accounts receivable will result in an adjustment to net income in
the operating activities section because (Points: 4)
a. cash was increased since accounts receivable is a current asset
b. the accounts receivable increase was a revenue included in net income, but it was not a source of
cash
c. the net increase in accounts receivable decreases net sales and represents an assumed use of cash
d. all changes in noncash accounts must be disclosed on the cash flow statement

7. A change in accounting principle from one that is not generally accepted to one that is generally
accepted should be treated as (Points: 4)
a. an error and corrected by prior period adjustment
b. a change in accounting principle and the cumulative effect included in net income
c. a change in accounting principle and prior period financial statements are restated
d. a change in accounting principle and adjustments made prospectively

8. The Lawrence Company began its operations on January 1, 2010, and used the LIFO method of
accounting for its inventory. On January 1, 2012, Lawrence Company adopted FIFO in accounting for
its inventory. The following information is available regarding cost of goods sold for each method:

Year LIFO
Cost of Goods Sold FIFO
Cost of Goods Sold
2010 $470,000 $350,000
2011 690,000 450,000
2012 700,000 540,000

Assuming a tax rate of 30% and the same accounting change adopted for tax purposes, how would
the effect of the accounting change be reported in opening retained earnings on the 2012 financial
statements? (Points: 4)
a. +$360,000 restatement
b. +$252,000 restatement
c. no restatement
d. ($700,000) restatement

9. Current GAAP requires a company to account for a change in accounting estimate that impacts
multiple periods during (Points: 4)
a. the period of change
b. the period of change and future periods
c. the period of change and past periods
d. the period of change, past periods, and future periods

can you guys please help me with these questions.

1. Accounting information is useful for several kinds of decisions. For which decision situation would
accounting information NOT be useful?

a. Bankers evaluating the riskiness of loans.

b. Corporate managers controlling costs.

c. Production managers evaluating the quality of materials used in manufacturing.

d. Corporate managers setting prices.

2. If a company has $15,000 in assets and $10,000 in equities, then liabilities are:

a. $25,000.

b. $10,000.

c. $5,000.

d. $0.

3. Which form of business organization is characterized by limited liability and unlimited life?

a. Proprietorship

b. Partnership

c. Corporation

d. All of the above

4. The ratio that measures how many times during a year accounts receivable are collected is the:

a. average collection period.

b. accounts receivable turnover.

c. asset turnover.

d. none of the above.

5. The fact that most companies classify similar items the same way when reporting them in their financial
statements, along with the fact that they all generally choose the same accounting methods, helps minimize
comparability concerns when performing financial statement analysis.
True
False

6. Obligations to pay cash, transfer other assets, or provide services are:

a. assets.

b. liabilities.

c. equities.

d. expenses.

7. A truck that cost $24,000 and was expected to last 4 years was scrapped after 3 years. If the truck was
being depreciated on a straight-line basis (with no salvage value), the loss recognized on disposal would be:

a. $24,000.

b. $18,000.

c. $12,000.

d. $6,000.

8. If total sales are $200,000, total variable costs are $60,000, and total fixed costs are $80,000, the
contribution margin is:

a. $200,000

b. $80,000

c. $120,000

d. $140,000

9. The idea that the business will continue to operate for the foreseeable future is known as the:

a. arm's-length transaction assumption.

b. entity concept.

c. going concern assumption.

d. monetary measurement concept.

10. Which of the following is NOT a type of activity reported on the statement of cash flows?

a. Financing activities

b. Operating activities

c. Investing activities

d. Revenue activities

11. Which of the following is NOT a valid control procedure?

a. Segregation of duties

b. Adequate documents and records

c. Independent checks on performance

d. Management assurances

12. Which primary financial statement shows a business enterprise's excess of revenues over expenses?

a. Statement of cash flows

b. Balance sheet

c. Income statement

d. Statement of retained earnings

13. The functions of an accounting system include all of the following except to:

a. gather marketing data.

b. handle routine bookkeeping tasks.

c. structure information so that it can be used to evaluate performance of a business.

d. analyze transactions.

14. A cost that is not affected by a future decision is termed:

a. differential cost.

b. replacement cost.

c. manufacturing cost.

d. sunk cost.

15. Total Quality Management (TQM) is a management philosophy focused on:

a. increasing profitability by improving the quality of products and processes and increasing customer
satisfaction, while promoting the well-being and growth of employees.

b. increasing profitability by improving the quality of products and processes and increasing total assets,
while promoting the well-being and growth of employees.

c. increasing total assets by improving the quality of products and processes and increasing customer

d. increasing profitability by improving the quality of products and processes and increasing supplier

16. Creditors generally like to see a debt ratio that is relatively high.
True
False

1. Working Capital Management. Indicate how each of the following six different transactions
that Dynamic Mattress might make would affect (i) cash and (ii) net working capital:
a. Paying out a $2 million cash dividend.
b. A customer paying a $2,500 bill resulting from a previous sale.
c. Paying $5,000 previously owed to one of its suppliers.
d. Borrowing $1 million long-term and investing the proceeds in inventory.
e. Borrowing $1 million short-term and investing the proceeds in inventory.
f. Selling $5 million of marketable securities for cash.
Managing Working Capital. A new computer system allows your firm to more accurately
monitor inventory and anticipate future inventory shortfalls. As a result, the firm feels more able
to pare down its inventory levels. What effect will the new system have on working capital and
on the cash conversion cycle?
Accounting: Concepts & Applications, by Albrecht:
5. How is depreciation expense treated when the
discounted cash flow methods are used? Why?
MuaThuDuoiMua
07-08-2008, 03:57 PM
Tri t, hi v conception n kia thui ch rinh nguyn bi v y huh ? :eek:
TuyetNhien
07-09-2008, 03:22 PM
Answers to your questions.

1.c
2.c
3.d
4.b
5.t
6.d
7.d
8.d
9.c
10.d
11.d
12.c
13.d
14.d
15.d
16.f

I hope that helps you.

Quiz Accounting #2
1. The statement of financial position is also known as the: a. statement of cash flows. b.
balance sheet. c. income statement. d. retained
2. Which of the following is not normally considered to be an asset? a. Capital Stock b. Cash
c. Inventory d. Land
3. If a company has $15,000 in assets and $10,000 in equities, then liabilities are
a.$25,000 b.$10,000 c.$5,000 d.$0

4. Assets consumed through business operations are called: a. liabilities. b. expenses. c.
equities. d. net income.
5. Sales minus cost of goods sold equals: a. gross profit. b. net income. c. operating profit.
d. sales revenue
6. When preparing a statement of cash flows, activities associated with buying
and selling assets are: a. operating activities. b. investing activities. c. financing
activities d. revenue activities
7. The interrelationships among the financial statements is called: a. disclosure. b.
articulation. c. recognition. d. reconciliation.

8. The disclosure of quarterly financial information an is example of:
a. additional information about the summary totals found in the financial statements
b. handle routine bookkeeping tasks.
c. structure information so that it can be used to evaluate performance of a business.
d. analyze transaction

1) Transaction costs include
A) costs of negotiating contracts with other firms.
B) cost of enforcing contracts.
C) the existence of asset-specificity.
D) All of the above.
2) Financial risk is associated with changes in
A) the demand for a firms products.
B) a firms debt.
C) a firms labor costs.
D) government regulations of a firms activities.
3) ________ risk involves variation in returns due to the ups and downs of the economy,
the industry and the firm.
A) Structural B) Fluctuational C) Business D) Financial
4) A firms normal profit is best characterized by the
A) average of a firms profits over the past five years.
B) amount of profit necessary to keep the price of a firms stock from changing.
C) amount of profit a firm could earn in its next best alternative activity.
D) the average amount of profit earned in the firms industry.
5) A firm earns a normal profit when its total revenues just offset both the ________
cost and ________cost.
A) accounting; opportunity B) accounting; replacement
C) historical; replacement D) explicit; accounting
6) How long is the short-run time period in the economic analysis of the market?
A) three months or one business quarter
B) total time in which sellers already in the market respond to changes in demand and
equilibrium price
C) total amount of time it takes new sellers to enter the market
D) total amount of time it takes original sellers to leave the market
7) The law of demand can be best described by
A) people will buy things that they enjoy.
B) if incomes rise, people will buy more.
C) a rise in price will cause shortages.
D) a fall in price will increase quantity demanded.
8) All of the following are non-price determinants of demand except?
A) tastes and preferences B) income
C) technology D) future expectations
9) Which of the following refers to a shift in the demand curve?
A) This new advertising campaign should really increase our demand.
B) Lets drop our price to increase our demand.
C) We dare not raise our price because our demand will drop.
D) If new sellers enter the market, the demand for the product is bound to increase.
10) Two goods are ________ if the quantity consumed of one increases when the price
of the
other decreases.
A) normal B) superior
C) complementary D) substitute
11) Economists consider which of the following costs to be irrelevant to a short-run
business
decision?
A) opportunity cost B) out-of-pocket cost
C) historical cost D) replacement cost
12) Costs of production that change with the rate of output are:
A) Sunk costs
B) Opportunitycosts
C) Fixed costs
D) Variable costs
13) Which of the following is most likely a fixed cost?
A) Expenditures for raw materials
B) Wages for unskilled labor
C) Fuel cost
D) Property Taxes
14) The distinction between sunk and incremental costs is most helpful in answering
which
question?
A) How many more people should be added to the production process?
B) What is the correct price to charge?
C) Should we begin to build a new factory?
D) Should we continue developing a new software application that we began last year?
15) The main factor that explains the difference between accounting cost and economic
cost is
A) opportunity cost.
B) fixed cost.
C) variable cost.
D) All of the above help to explain the difference.
16) Which of the following markets comes closes to the model of perfect competition?
A) Automobile industry B) Information Technology industry
C) Aerospace industry D) Agriculture
17) Which of the following characteristics is most important in differentiating between
perfect
competition and all other types of markets?
A) whether or not the product is standardized
B) whether or not there is complete market information about price
C) whether or not firms are price takers
D) All of the above are equally important.
18) If a perfectly competitive firm incurs an economic loss, it should:
A) shut down immediately.
B) try to raise its price.
C) shut down in the long run.
D) shut down if this loss exceeds variable cost.
19) Which of the following correctly completes this statement? The monopolists
marginal revenue
A) will be greater than price
B) will be less than price
C) will be equal to price.
D) will be greater than total revenues
20) Monopoly is characterized by
A) unique products.
B) market entry and exit difficult or impossible.
C) non-price competition not necessary.
D) All of the above.
21) Which of the following industries is most likely to represent the Monopolistic
competition
market structure?
A) automobiles B) tobacco products
C) utility companies D) farm equipment
22) Which of the following represents a good example of an Oligopoly?
A) The Agriculture industry B) A Public Utility
C) The Automobile industry D) The Restaurant Industry
23) Mutual interdependence means that:
A) all firms are price takers.
B) each firm sets its own price based on its anticipated reaction by its competitors.
C) all firms collaborate to establish one price.
D) all firms are free to enter or leave the market.
24) In which of these markets would the firms be facing the least elastic demand
curve?
A) perfect competition B) pure monopoly
C) monopolistic competition D) oligopoly
25) The four-firm concentration ratio:
A) indicates the total profitability among the top four firms in an industry.
B) is an indicator of the degree of monopolistic competition.
C) indicates the presence and intensity of an oligopoly market.
D) is used by the government as a basis for anti-trust cases.
26). What term describes when a firm is using the least-cost production process?
a) Agency efficiency
b) Technical efficiency
c) Lean compliant
d) Economizing
e) Six sigma compliant
27) Why are the current health care systems on the rise being built around the
integration of
clinical information technology and disease management systems?
a) They both have high costs
b) They both are new trends in health care
c) They are easy to integrate
d) They do not require a significant investment to integrate
e) They both require asset specificity and coordination
28) What concept describes the situation where the owner of an asset grants another
party the
right to use that asset, but the owner retains all controlling rights that are not explicitly
stipulated in the contract?
a) Asset specificity
b) Non-contract rights of ownership
c) Control rights agreement
d) Residual rights of control
e) Coordination
29) What happens when the process by which governance develops exhibits path
dependence?
a) Governance arrangements split decision rights and controls between two related
firms
b) Governance arrangements are optimal
c) Past circumstances could exclude certain possible governance arrangements in the
future
d) The firm will split into two entities to reduce the governance issues created
e) The governance will form effectively
30) What type of strategic alliance involves two or more firms creating and together
owning a new
independent organization?
a) Partnership
b) Tapered integration
c) Close-knit semi-formal relationship
d) Mutual agreement
e) Joint venture
31) Which of the following processes is most representative of a vertically integrated
firm on the
make end of the make-or-buy continuum?
a) Arms length market transactions
b) Long-term contracts
c) Strategic alliances and joint ventures
d) Parent/subsidiary relationships
e) Perform activity internally
32) Which of the following has a downstream relationship with a Toyota Motor
Corporation?
a) Steel manufacturers
b) Tire companies
c) Dealerships
d) Paint producer
e) Car parts manufacturer
33). The biotechnology industry is seeing a broad pattern of disintegration due to the
fact that big pharma companies are less and less doing which of the following core
functions?
a) Infrastructure
b) Product innovation
c) Obtaining regulatory approval
d) Customer relationship
e) Manufacturing and communications
34). What is a market firm?
a) Firm representing a particular industry
b) Financial firm
c) Subsidiary of the larger parent firm
d) Large scale firm
e) An independent outsourcing partner
35) . What problem preventing complete contracts refers to a lack of transparency/equal
access to
the details surrounding a contract?
36) When contracts are incomplete, what must be well defined and enforceable to allow
for smooth transactions to occur?
a) Contract performance measures
b) Contract roles
c) Contract costs
d) Contract triggers
e) Contract law
37) Which of the following is not a result of the holdup problem?
a) More difficult contract negotiations and more frequent renegotiations
b) Investments to improve ex post bargaining positions
c) Reduction in the transaction costs of arms length market exchanges
d) Distrust
e) Reduced investment in relationship-specific investments
38) Which of the following is not considered a rationale for the intervention of
government in the
market process in theUnited States?
A) the redistribution of income
B) the reallocation of resources
C) the long-run planning of scarce resources
D) the short-run stabilization of prices
E) All of the above.
39) Which of the following is not an example of a cost externality?
A) the dumping of industrial waste into a lake
B) unsightly billboards
C) a neighbor that blasts his stereo system
D) the building of a new type of jet fighter bomber
E) All of the above.
40). An example of an activity that is likely to generate benefit (positive) externality is
(are):
41) Tying arrangements that lessen competition were made illegal by
A) theShermanAnti-Trust Act. B) the Clayton Act.
C) the Celler-Kefauver Act. D) the Robinson-Patman Act.
42) The delay between when a problem occurs and when it is recognized is referred to
as the:
43) The delay between when a policy action is taken and when they affect the economy
is referred to as the:
A) Impact lag
B) Action lag
C) Recognition lag
D) Policy lag
44) Which of the following is an example of a government action to internalize a cost
externality?
A) a fine imposed on a company that pollutes a stream
B) the closing of a public library
C) a sales tax on jewelry
D) the increase on bridge tolls
45)Which of the following is responsible for controlling the money supply?
A) The Congress
B) The Supreme Court
C) The Federal Reserve
D) The President
46) Which of the following are risks for multinational corporations but not risks for
domestic
corporations?
A) changes in government rules and regulations
B) capital controls
C) changes in tax laws
D) government red tape and corruption

47) The transfer of goods and services by one company to another independent
company is
referred to as:
A) Supply chain management
B) Outsourcing
C) Capital Management
D) Profit Sharing
48) Risks faced by multinational corporations include:
A) Changes in exchange rates
B) Restrictions on ownership
C) Repatriation of funds
D) Cultural and Religious philosophies
E) All of the above
49) The pricing of a product at each stage of production as the product moves through
several
stages is called:
A) transfer pricing. B) cost plus pricing.
C) penetration pricing. D) monopolistic pricing.

50). What type of firm is one that is already operating in a particular market?
a) Market leader
b) Entrant
c) Incumbent
d) Market follower
e) Monopolist
51) What is the term defined as the withdrawal of a product from a market?
52. Which of the following is not an exit barrier for firms in an industry?
a) Sunk costs
b) Labor agreements or commitments to purchase raw materials
c) Obligations to input suppliers
d) Excess capacity
e) Government restrictions
53). Which of the following is not a part of the five-forces framework?
a) Supplier Power
b) Internal rivalry
c) Regulation
d) Buyer Power
e) Substitutes and Complements
54). What term refers to the ability of individual customers to negotiate purchase prices
that
extract profits from sellers?
55). Which of the following is generally thought of as a supplier in the hospital industry?
56) Which of the following is not a barrier to entry in professional sports markets?
57). What term describes the situation when a firm earns a higher rate of economic
profit than the average rate of economic profit of other firms competing within the same
market?
58). What type of good is one whose quality is relatively easy to evaluate before
purchase?
59). Which of the following is a capability?
a) Patents and trademarks
b) Brand-name reputation
c) Installed base
d) Organizational culture
e) Sourcing skills
60). What term coined by Michael Porter describes a firm that pursues elements of cost
leadership and benefit leadership at the same time and in the process fails to achieve
either a cost advantage or a benefit advantage?
Posted in Uncategorized | Leave a comment
ECO 561 FINAL EXAM
Posted on October 15, 2012by uopsolutions

CLICK HERE TO DOWNLOAD THE
ANSWERS $24 Only

1) In a market economy the distribution of output will be determined primarily by:
A. a social consensus as to what distribution of income is most equitable. B.
consumer needs and preferences. C. the quantities and prices of the resources
that households supply. D. government regulations that provide a minimum
income for all.
2) In a competitive market economy firms will select the least-cost production
technique because: A. dollar voting by consumers mandates such a choice. B. such
choices will result in the full employment of available resources. C. to do so will
maximize the firms profits. D. this will prevent new firms from entering the
industry.
3) A leftward shift in the supply curve of product X will increase equilibrium price to
a greater extent the: A. more inelastic the demand for the product. B. more
elastic the supply curve. C. larger the elasticity of demand coefficient. D. more elastic
the demand for the product.
4) Which of the following statements is true about productive and allocative
efficiency? A. Realizing allocative efficiency implies that productive efficiency
has been realized. B. Productive efficiency can only occur if there is also allocative
efficiency. C. Productive efficiency and allocative efficiency can only occur together;
neither can occur without the other. D. Society can achieve either productive
efficiency or allocative efficiency, but not both simultaneously.
5) Since their introduction, prices of DVD players have fallen and the quantity
purchased has increased. This statement: A. suggests that the supply of DVD
players has increased. B. suggests that the demand for DVD players has increased.
C. constitutes an exception to the law of supply in that they suggest a downward
sloping supply curve. D. constitutes an exception to the law of demand in that they
suggest an upward sloping demand curve.
6) Camilles Creations and Julias Jewels both sell beads in a competitive market. If at
the market price of $5, both are running out of beads to sell (they cant keep up with
the quantity demanded at that price), then we would expect both Camilles and
Julias to: A. raise their price and reduce their quantity supplied. B. raise their price
and increase their quantity supplied. C. lower their price and increase their
quantity supplied. D. lower their price and reduce their quantity supplied.
7) If a firm in a purely competitive industry is confronted with an equilibrium price
of $5, its marginal revenue: A. may be either greater or less than $5. B. will also be
$5. C. will be greater than $5. D. will be less than $5.
8) If technology dictates that labor and capital must be used in fixed proportions, an
increase in the price of capital will cause a firm to use: A. more labor as a
consequence of the substitution effect. B. more labor as a consequence of the output
effect. C. less labor as a consequence of the output effect. D. less labor as a
consequence of the substitution effect.
9) If a firm is selling in an imperfectly competitive product market, then: A. A.
average product will be less than marginal product for any number of workers
hired. B. the marginal products of successive workers must be sold at lower prices.
C. the marginal products of successive workers can be sold at a constant price. D. the
marginal products of successive workers can be sold at higher prices.
10) In the short run the Sure-Screen T-Shirt Company is producing 500 units of
output. Its average variable costs are $2.00 and its average fixed costs are $.50. The
firms total costs: A. are $2.50. B. are $1,250. C. are $1,100. D. are $750.
11) What do wages paid to blue-collar workers, interest paid on a bank loan,
forgone interest, and the purchase of component parts have in common? A. None are
either implicit or explicit costs. B. All are opportunity costs. C. All are implicit costs. D.
All are explicit costs.
12) Which of the following represents a long-run adjustment? A. a steel
manufacturer cuts back on its purchases of coke and iron ore B. a farmer uses an
extra dose of fertilizer on his corn crop C. unable to meet foreign competition, a
U.S. watch manufacturer sells one of its branch plants D. a supermarket hires
four additional clerks
13) If the wage rate increases: A. a purely competitive and an imperfectly
competitive producer will both hire less labor. B. a purely competitive producer
will hire less labor, but an imperfectly competitive producer will not. C. an
imperfectly competitive producer will hire less labor, but a purely competitive
producer will not. D. an imperfectly competitive producer may find it profitable to
hire either more or less labor.
14) Construction workers frequently sponsor political lobbying in support of
greater public spending on highways and public buildings. One reason they do this
is to: A. increase the demand for construction workers. B. restrict the supply of
construction workers. C. increase the elasticity of demand for construction workers.
D. increase the price of substitute inputs.
15) A firm can hire six workers at a wage rate of $8 per hour but must pay $9 per
hour to all of its employees to attract a seventh worker. The marginal wage cost of
the seventh worker is: A. $15. B. $9. C. $10. D. $21.
16) Oligopoly is difficult to analyze primarily because: A. output may be either
homogenous or differentiated. B. the number of firms is too large to make collusion
understandable. C. the price and output decisions of any one firm depend on the
reactions of its rivals. D. neither allocative nor productive efficiency is achieved.
17) A competitive firm will maximize profits at that output at which: A. total
revenue exceeds total cost by the greatest amount. B. total revenue and total
cost are equal. C. price exceeds average total cost by the largest amount. D. the
difference between marginal revenue and price is at a maximum.
18) An industry comprised of a small number of firms, each of which considers the
potential reactions of its rivals in making price-output decisions is called: A.
monopolistic competition. B. oligopoly. C. pure monopoly. D. pure competition.
19) Advertising can impede economic efficiency when it: A. increases entry barriers.
B. reduces brand loyalty. C. enables firms to achieve substantial economies of scale.
D. increases consumer awareness of substitute products.
20) Nonprice competition refers to: A. advertising, product promotion, and
changes in the real or perceived characteristics of a product. B. competition
between products of different industries, for example, competition between
aluminum and steel in the manufacture of automobile parts. C. reductions in
production costs that are not reflected in price reductions. D. price increases by a
firm that are ignored by its rivals.
21) Which of the following is not a possible source of natural monopoly? A. greater
use of specialized inputs B. large-scale network effects C. rent-seeking behavior D.
simultaneous consumption
22) A monopolistically competitive industry combines elements of both competition
and monopoly. The monopoly element results from: A. product differentiation. B.
the likelihood of collusion. C. mutual interdependence in decision making. D. high
entry barriers.
23) The term oligopoly indicates: A. a few firms producing either a differentiated
or a homogeneous product. B. a one-firm industry. C. an industry whose four-firm
concentration ratio is low. D. many producers of a differentiated product.
24) Suppose that an industry is characterized by a few firms and price leadership.
We would expect that: A. price would exceed both marginal cost and average
total cost. B. price would equal marginal cost. C. marginal revenue would exceed
marginal cost. D. price would equal average total cost.
25) When economists view technological change as internal to the economy, they
mean that it: A. arises deliberately from the profit motive and competition. B.
occurs randomly. C. arises mainly from government subsidies. D. occurs
accidentally.
26) Firm X develops a new product and gets a head start in its production. Other
firms try to produce a similar product but discover they have higher average total
costs than the existing firm. This situation illustrates: A. learning-by-doing. B.
diseconomies of scale. C. spillover costs. D. diminishing marginal returns.
27) In the long run a pure monopolist will maximize profits by producing that
output at which marginal cost is equal to: A. average variable cost. B. average total
cost. C. average cost. D. marginal revenue.
28) If the U.S. unemployment rate is 9 percent, we can infer that: A. the economy is
in the expansion phase of the business cycle. B. actual GDP is equal to potential GDP.
C. potential GDP is in excess of actual GDP. D. actual GDP is in excess of potential
GDP.
29) The industries or sectors of the economy in which business cycle fluctuations
tend to affect output the most are: A. military goods and capital goods. B. capital
goods and durable consumer goods. C. services and nondurable consumer goods.
D. clothing and education.
30) Inflation is undesirable because it: A. arbitrarily redistributes real income
and wealth. B. reduces everyones standard of living. C. invariably leads to
hyperinflation. D. usually is accompanied by declining real GDP.
31) Kara voluntarily quit her job as an insurance agent to return to school full-time
to earn an MBA degree. With degree in hand she is now searching for a position in
management. Kara presently is: A. cyclically unemployed. B. not a member of the
labor force. C. structurally unemployed. D. frictionally unemployed.
32) Expansionary fiscal policy is so named because it: A. involves an expansion of
the nations money supply. B. is designed to expand real GDP. C. necessarily
expands the size of government. D. is aimed at achieving greater price stability.
33) Suppose the price level is fixed, the MPC is .5, and the GDP gap is a negative
$100 billion. To achieve full-employment output (exactly), government should: A.
increase government expenditures by $100 billion. B. reduce taxes by $200 billion.
C. increase government expenditures by $50 billion. D. reduce taxes by $50
billion.
34) Assume the Standard Internet Company negotiates a loan for $5,000 from the
Metro National Bank and receives a checkable deposit for that amount in exchange
for its promissory note (IOU). As a result of this transaction: A. the supply of
money is increased by $5,000. B. the Metro Bank acquires reserves from other
banks. C. the supply of money declines by the amount of the loan. D. a claim has been
demonetized.
35) If the Fed were to purchase government securities in the open market, we
would anticipate: A. higher interest rates, a contracted GDP, and depreciation of the
dollar. B. lower interest rates, a contracted GDP, and appreciation of the dollar. C.
lower interest rates, an expanded GDP, and appreciation of the dollar. D. lower
interest rates, an expanded GDP, and depreciation of the dollar.
36) Other things equal, a 10 percent decrease in corporate income taxes will: A.
shift the investment-demand curve to the right. B. shift the investment-demand
curve to the left. C. have no effect on the location of the investment-demand curve.
D. decrease the market price of real capital goods.
37) The quantity theory of the demand for money states that a countrys money
supply is proportional to: A. The exchange rate. B. The money value of gross
domestic product. C. The real level of gross domestic product. D. The domestic
interest rate.
38) Suppose that US prices rise 4 percent over the next year while prices in Mexico
rise 6%. According to the purchasing power parity theory of exchange rates, what
should happen to the exchange rate between the dollar and the peso? A. The peso
should depreciate. B. The dollar will be revalued. C. The peso should appreciate. D.
The dollar should depreciate.
39) Exchange rates are determined in the long-run by: A. Purchasing power parity.
B. Financial asset pricing. C. Real growth rates. D. Interest rate differentials.
ETH 316 FINAL EXAM

ANSWERS $22 Only

MATCHING: Using the referenced Key Terms and Definitions below, answer questions
1 through 3:
Reference: Matching Key Terms and Definitions
a) Stake
b) Primary stakeholder
c) Secondary stakeholder
1. Business partners, customers, and employees.
A. a)
B. b)
C. c)
2. An interest, claim, or right to something.
A. a)
B. b)
C. c)
3. Opinion formers, community, and authorities.
A. a)
B. b)
C. c)
4. Organization cultures vary widely, even within the same industry.
a. True
b. False
5. According to the authors, ethical behavior is defined as:
a) a set of moral principles or values that guide an individual
b) rules of behavior set by the Federal government
c) principles, norms, and standards agreed upon by society
d) none of the above
6. The ___________ approach to ethical decision making focuses on how people
actually make ethical decisions.
a) prescriptive
b) descriptive
c) illustrative
d) regulatory
7. According to a survey of executives, most respondents would rather lie to employees
about performance than confront them about performance problems.
a) True
b) False
8. The Tailhook scandal is an example of:
a) Management focusing too much on the ends rather than the means.
b) The ethical Pygmalion effect.
c) Social learning theory.
d) Employees ignoring managements clear message.
9. According to the Executive Ethical Leadership Reputation Matrix, ___________ is an
executive characterized as a weak moral person and a strong moral manager.
a) Unethical leader
b) Ethical leader
c) Ethically neutral leader
d) Hypocritical leader
MATCHING: Using the referenced Key Terms and Definitions below, answer questions
10 through 13:
Reference: Matching Ethical Type to Example
a) Human resource issue
b) Conflict of interest
c) Customer confidence issue
d) Use of corporate resources
10. Accepting a bribe.
A. a)
B. b)
C. c)
D. d)
11. Discriminating against an employee.
A. a)
B. b)
C. c)
D. d)
12. A product is unsafe for human consumption.
A. a)
B. b)
C. c)
D. d)
13. Providing a personal reference on corporate letterhead.
A. a)
B. b)
C. c)
D. d)
14. Managers at the top levels of an organization report feeling the most pressured to
compromise their ethics.
a. True
b. False
15. Which of the following is true?
a) Discrimination is an intentional bias that affects behavior.
b) Discrimination occurs whenever something other than qualifications affects
how an employee is treated.
c) Title VII of the Civil Rights Act of 1964 prohibits discrimination against individuals
who
are under 40 years old against age discrimination.
d) Discrimination is always overt and clear.
16. Which of the following is false?
a) Lawrence Kohlberg developed the cognitive moral development theory by studying
male adult behavior.
b) The cognitive moral development theory focuses primarily on how people decide
what course of action is morally right.
c) Cognitive moral development is an individual difference that impacts the way people
think about an ethical dilemma.
d) Individuals can comprehend and use all stages of reasoning below their own.
17. Before the beginning of the twentieth century, consumers did not have the right to
sue manufacturers.
a. True
b. False
18. ___________ understand and follow the rules and policies of the organization.
They also have good ethical compasses.
a) Grenades
b) Loose cannons
c) Good cannons
d) Good soldiers
19. Most business managers rely on a deontological approach.
a. True
b. False
20. According to the Corporate Social Responsibilities (CSR) pyramid, the __________
responsibility is considered to be of primary importance to organizations.
a. Legal
b. Philanthropic
c. Societal
d. Economic
21. According to cognitive moral development theory, individuals move to a higher
reasoning stage:
a) Every time they encounter a more difficult ethical dilemma.
b) When there is a contradiction between his or her current moral
reasoning stage and the next higher one.
c) As they grow older.
d) None of the above. An individuals level of moral reasoning does not change
after he or she becomes an adult.
22. Groupthink occurs when:
a) A group is working together in a cohesive, flowing manner for peak
performance.
b) Group members know each other so well that they are able to anticipate
the others ideas.
c) Group members conform to the groups decision and are unwilling to express
disagreement.
d) A group cannot make a decision because members are unwilling to
compromise.
23. In this example of a conflict of interest, ________ conducted a series of off-the-
books partnerships that were used to hide the organizations debt and inflate its stock
price. The partnerships were managed by the companys executives who stood to
profit the most from the transactions.
a) Merrill Lynch
b) Enron
c) Citicorp
d) Adelphia

24. When communicating a code of conduct:
a) Focus on values that should guide decision making.
b) Provide the same code of conduct to all departments regardless of its
length.
c) Refrain from changing the code of conduct regularly.
d) Fewer employees will read the code if it is short.
25. Federal law prohibits discrimination against individuals with specific characteristics.
Which of the following characteristics is not on that list (i.e. not protected under Federal
law)?
a) Religion
b) Sex
c) Pregnancy
d) Mental ability
26. Corporate social responsibility (CSR) consists of which four kinds of
responsibilities:
a) Economic, ethical, societal, and altruistic
b) Economic, legal, ethical, and altruistic
c) Fiscal, legal, societal, and philanthropic
d) Economic, legal, ethical, and philanthropic
27. John works for Kinjos Printing Services during the day and Joes Diner at night.
This is a conflict of interest.
a. True
b. False
28. Which of the following is false?
a) Moral reasoning can be increased through training.
b) A more-principled individual is less likely to cheat.
c) When an organizations leader is characterized by high moral development,
the entire ethical climate of the organization is stronger.
d) Employee satisfaction and commitment are not related to the leaders
moral development.
29. In a 2002 poll, _________ ranked last on the who do you trust scale.
a) Lawyers
b) Politicians
c) Chief executive officers
d) Accountants
30. According to the authors, most people are guided by a strict internal moral compass
and will not be swayed by organization factors.
a. True
b. False

FIN 324 FINAL EXAM

ANSWERS $7.99 Only

1.The primary users of external financial reports are
a.Those who direct day to day operations of a business enterprise
b.Individuals who have an economic interest in the firm but who are not part of
management
c.Managers of an enterprise who plan, implement plans, and control costs
d.None of the above
2.If a company has $15,000 in assets and $10,000 in equities, then liabilities are
a.$25,000
b.$10,000
c.$5,000
d.$0
3.A revenue account is increased with
a.Debits
b.Credits
c.Equities
d.None of the above
4.Expense items that have been incurred during a period but not recorded by the end of
the period are:
a.Prepaid liabilities
b.Prepaid expenses
c.Deferred expenses
d.Unrecorded liabilities
5.A purchase of $900 of supplies on account was journalized and posted as $900 debit
to Supplies on Hand and a $900 credit to Accounts Receivable. The entry to correct
this error is
a.A $900 debit to accounts payable and a $900 credit to accounts receivable
b.A $900 debit to supplies on hand and a $900 credit to accounts payable
c.A $900 debit to accounts receivable and a $900 credit to accounts payable
d.A $900 debit to accounts receivable and a $900 credit to supplies on hand
6.The retained earnings balance of Werner Company was $46,800 on January 1, 2005.
Net income for 2005 was $26,480. If retained earnings had a credit balance of $21,000
after closing entries were posted on December 31, 2005 and if additional stock of
$13,000 was issued during the year, dividends paid during 2005 were:
a.$38,800
b.$52,280
c.$65,280
d.none of the above
7.If net purchases are $200,000 and beginning and ending accounts payable -balances
are $25,000 and $20,000, respectively, cash paid for purchases is
a.$195,000
b.$200,000
c.$205,000
d.$210,000
8.The tools of financial statement analysis are not static they have, and will continue,
to evolve as the nature of doing business and/or the needs of financial statement users
change
a.True
b.False
9.Which of the following costs would be LEAST likely to be a fixed cost:
a.Plant property taxes
b.Plant supervisors salary
c.Utilities costs
d.Executive salaries
10.Sales income minus total fixed costs is equal to:
a.Net income
b.Contribution margin
c.Gross margin
d.None of these choices
FIN 370 FINAL EXAM

ANSWERS $22 Only

1) The true owners of the corporation are the:
A. board of directors of the firm.
B. preferred stockholders.
C. common stockholders.
D. holders of debt issues of the firm.
2) Which of the following categories of owners have limited liability?
A. General partners
B. Sole proprietors
C. Shareholders of a corporation
D. Both a and b
3) Which of the following best describes the goal of the firm?
A. The maximization of the total market value of the firms common stock
B. Profit maximization
C. Risk minimization
D. None of the above
4) Which of the following would increase the need for external equity?
A. A reduction in corporate profits
B. A slow-down in economic growth
C. A seasonal reduction in sales revenues
D. Inadequate investment opportunities
5) Which of the following does NOT involve underwriting by an investment banker?
A. Syndicated purchases
B. Negotiated purchases
C. Commission basis purchases
D. Competitive bid purchases
6) __________ is a method of offering securities to a limited number of investors.
A. Public offering
B. Private placement
C. Syndicated underwriting
D. Initial public offering
7) Difficulty in finding profitable projects is due to:
A. ethical dilemmas.
B. competitive markets.
C. opportunity costs.
D. social responsibility.
8) According to the agency problem, _________ represent the principals of a
corporation.
A. employees
B. managers
C. suppliers
D. shareholders
9) Which of the following is NOT a principle of basic financial management?
A. Profit is king
B. Efficient capital markets
C. Incremental cash flow counts
D. Risk/return tradeoff
10) Another name for the acid test ratio is the:
A. average collection period.
B. inventory turnover ratio.
C. quick ratio.
D. current ratio.
11) Marshall Networks, Inc. has a total asset turnover of 2.5% and a net profit margin of
3.5%.
The firm has a return on equity of 17.5%. CalculateMarshalls debt ratio.
A. 60%
B. 50%
C. 40%
D. 30%
12) The accounting rate of return on stockholders investments is measured by:
A. realized rate of inflation.
B. operating income return on investment.
C. return on equity.
D. return on assets.
13) Northwest Bank pays a quoted annual (nominal) interest rate of 4.75%. However, it
pays
interest (compounded) daily using a 365-day year. What is the effective annual rate of
return
(APY)?
14) You have $10,000 to invest. You do not want to take any risk, so you will put the
funds in a
savings account at the local bank. Of the following choices, which one will produce the
largest
sum at the end of 22 years?
15) When George Washington was president of theUnited Statesin 1797, his salary was
$25,000. If you assume an annual rate of inflation of 2.5%, how much would his salary
have
been in 1997?
16) Which of the following is NOT a basic function of a budget?
17) The primary purpose of a cash budget is to:
A. determine the estimated income tax for the year.
B. provide a detailed plan of future cash flows.
C. determine accounts payable.
D. determine the level of investment in current and fixed assets.
18) All of the following are found in the cash budget EXCEPT:
A. new financing needed.
B. cash disbursements.
C. inventory.
D. a net change in cash for the period.
19) Which of the following is a non-cash expense?
A. Administrative salaries
B. Packaging costs
C. Interest expense
D. Depreciation expenses
20) The break-even model enables the manager of a firm to:
A. determine the optimal amount of debt financing to use.
B. calculate the minimum price of common stock for certain situations.
C. determine the quantity of output that must be sold to cover all operating costs.
D. set appropriate equilibrium thresholds.
21) A plant can remain operating when sales are depressed:
A. unless variable costs are zero when production is zero.
B. if the selling price per unit exceeds the variable cost per unit.
C. in an effort to cover at least some of the variable cost.
D. to help the local economy.
22) If you have $20,000 in an account earning 8% annually, what constant amount
could you
withdraw each year and have nothing remaining at the end of five years?
23) At what rate must $400 be compounded annually for it to grow to $716.40 in 10
years?
24) The present value of a single future sum:
A. increases as the discount rate increases.
B. increases as the number of discount periods increase.
C. depends upon the number of discount periods.
D. is generally larger than the future sum.
25) Which of the following is considered to be a spontaneous source of financing?
26) A toy manufacturer following the hedging principle will generally finance seasonal
inventory
build-up prior to the Christmas season with:
27) Which of the following is NOT considered a permanent source of financing?
28) For the NPV criteria, a project is acceptable if the NPV is __________, while for the
profitability index, a project is acceptable if the profitability index is __________.
29) We compute the profitability index of a capital-budgeting proposal by:
30) Dieyard Battery Recyclers is considering a project with the following cash flows:
If the appropriate discount rate is 15%, compute the NPV of this project.
31) Which of the following statements about the MIRR is false?
32) Many firms today continue to use the payback method but employ the NPV or IRR
methods
as secondary decision methods of control for risk.
33) You have been asked to analyze a capital investment proposal. The projects cost
is
$2,775,000. Cash inflows are projected to be $925,000 in Year 1; $1,000,000 in Year 2;
$1,000,000 in Year 3; $1,000,000 in Year 4; and $1,225,000 in Year 5. Assume that
your firm
discounts capital projects at 15.5%. What is the projects MIRR?
34) The NPV assumes cash flows are reinvested at the:
A. cost of capital.
B. NPV.
C. IRR.
D. real rate of return.
35) ABC Service can purchase a new assembler for $15,052 that will provide an annual
net cash
flow of $6,000 per year for five years. Calculate the NPV of the assembler if the required
rate of
return is 12%. (Round your answer to the nearest $1.)
A. $6,577
B. $4,568
C. $1,056
D. $7,621
36) The firm should accept independent projects if:
A. the NPV is greater than the discounted payback.
B. the profitability index is greater than 1.0.
C. the payback is less than the IRR.
D. the IRR is positive.
37) The average cost associated with each additional dollar of financing for investment
projects
is:
A. beta.
B. the marginal cost of capital.
C. the incremental return.
D. risk-free rate.
38) Cost of capital is:
A. the average cost of the firms assets.
B. a hurdle rate set by the board of directors.
C. the coupon rate of debt.
D. the rate of return that must be earned on additional investment if firm value is to
remain
unchanged.
39) PepsiCo uses 30-year Treasury bonds to measure the risk-free rate because:
A. these bonds are essentially free of business risk.
B. they capture the long-term inflation expectations of investors associated with
investments in long-term assets.
C. these bonds are essentially free of interest rate risk.
D. none of the above.
40) J & B, Inc. has $5 million of debt outstanding with a coupon rate of 12%. Currently,
the
yield to maturity on these bonds is 14%. If the firms tax rate is 40%, what is the cost of
debt to J& B?
41) Shawhan Supply plans to maintain its optimal capital structure of 30% debt, 20%
preferred
stock, and 50% common stock far into the future. The required return on each
component is:
debt10%; preferred stock11%; and common stock18%. Assuming a 40% marginal
tax rate,
what after-tax rate of return must Shawhan Supply earn on its investments if the value
of the firm
is to remain unchanged?
42) The expected dividend is $2.50 for a share of stock priced at $25. What is the cost
of retained earnings if the long-term growth in dividends is projected to be 8%?
43) Lever Brothers has a debt ratio (debt to assets) of 40%. Management is wondering
if its
current capital structure is too conservative. Lever Brotherss present EBIT is $3 million,
and
profits available to common shareholders are $1,560,000, with 342,857 shares of
common stock
outstanding. If the firm were to instead have a debt ratio of 60%, additional interest
expense
would cause profits available to stockholders to decline to $1,440,000, but only 228,571
common shares would be outstanding. What is the difference in EPS at a debt ratio of
60%
versus 40%?
44) Zybeck Corp. projects operating income of $4 million next year. The firms income
tax rate
is 40%. Zybeck presently has 750,000 shares of common stock which have a market
value of $10
per share, no preferred stock, and no debt. The firm is considering two alternatives to
finance a
new product: (a) the issuance of $6 million of 10% bonds, or (b) the issuance of 60,000
new
shares of common stock. If Zybeck issues common stock this year, what will projected
EPS be
next year?
A. $1.67
B. $2.96
C. $2.10
D. $2.33
if its
current capital structure is too conservative. Lever Brotherss present EBIT is $3 million,
and
profits available to common shareholders are $1,680,000, with 457,143 shares of
common stock
outstanding. If the firm were to instead have a debt ratio of 40%, additional interest
expense
would cause profits available to stockholders to decline to $1,560,000, but only 342,857
common shares would be outstanding. What is the difference in EPS at a debt ratio of
40%
versus 20%?
A. $0.88
B. $1.16
C. $2.12
D. $1.95
46) Which of the following statements about exchange rates is true?
A. Exchange rates were fixed prior to establishing a floating-rate international currency
system, and all countries set a specific parity rate for their currency relative either to the
Canadian or to the U.S. dollar.
B. Day-to-day fluctuations in exchange rates currently are caused by changes in parity
rates.
C. A floating-rate international currency system has been operating since 1973.
D. All of the choices.
47) A bond sold simultaneously in several different foreign capital markets, but
denominated in a
currency different from the country in which the bond is issued, is called a(n):
48) Capital markets in foreign countries:
A. offer lower returns than those obtainable in the domestic capital markets.
B. provide international diversification.
C. in general are becoming less integrated due to the widespread availability of
interest rate
and currency swaps.
D. all of the choices.
49) If the quote for a forward exchange contract is greater than the computed price, the
forward
contract is:
A. at equilibrium.
B. a good buy.
C. overvalued.
D. undervalued.
50) The interplay between interest rate differentials and exchange rates such that both
adjust until
the foreign exchange market and the money market reach equilibrium is called the:
A. arbitrage markets theory.
B. interest rate parity theory.
C. purchasing power parity theory.
D. balance of payments quantum theory.
51) A spot transaction occurs when one currency is:
A. traded for another at an agreed-upon future price.
B. exchanged for another currency at a specified price.
C. deposited in a foreign bank.
D. immediately exchanged for another currency.
52) Buying and selling in more than one market to make a riskless profit is called:
A. cannot be determined from the above information.
B. international trading.
C. profit maximization.
D. arbitrage.
53) One reason for international investment is to reduce:
A. beta risk.
B. advantages in a foreign country.
C. portfolio risk.
D. price-earnings (P/E) ratios.
54) An important (additional) consideration for a direct foreign investment is:
A. political risk.
B. maximizing the firms profits.
C. attaining a high international P/E ratio.
D. all of the above.
FIN 370 FINAL EXAM Set 2

ANSWERS $24 Only

1) In terms of organizational costs, which of the following sequences is correct, moving
from lowest to highest cost?
A. Sole proprietorship, general partnership, limited partnership, and corporation
B. General partnership, sole proprietorship, limited partnership, corporation
C. Corporation, limited partnership, general partnership, sole proprietorship
D. Sole proprietorship, general partnership, corporation, limited partnership

A. General partners
B. Sole proprietors
D. Both a and b

4) Which of the following does NOT involve underwriting by an investment banker?
A. Negotiated purchases
B. Competitive bid purchases
C. Syndicated purchases
D. Commission basis purchases

5) Money market instruments include:
A. preferred stock.
B. bankers acceptances.
C. corporate bonds.
D. common stock.


A. competitive markets.
B. social responsibility.
C. ethical dilemmas.
D. opportunity costs.

A. Incremental cash flow counts
B. Risk/return tradeoff
C. Efficient capital markets
D. Profit is king

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

3.5%. The firm has a return on equity of 17.5%. Calculate Marshalls debt ratio.

12) Which of the following financial ratios is the best measure of the operating
effectiveness of a firms management?
funds
in a savings account at the local bank. Of the following choices, which one will produce
the
largest sum at the end of 22 years?

14) Edward Johnson decided to open up a Roth IRA. He will invest $1,800 per year for
the
next 35 years. Deposits to the Roth IRA will be made via a $150 payroll deduction at
the
end of each month. Assume that Edward will earn 8.75% over the life of the IRA. How
much
will he have at the end of 35 years?

pays interest (compounded) daily using a 365-day year. What is the effective annual
rate of
return (APY)?

16) Which of the following statements about the percent-of-sales method of financial
forecasting is true?

A. Budgets provide the basis for corrective action when actual figures differ from the
budgeted figures.
B. Budgets allow for performance evaluation.
C. Budgets indicate the need for future financing.
D. Budgets compare historical costs of the firm with its current cost performance.
A. inventory.
C. new financing needed.
D. a net change in cash for the period.

A. set appropriate equilibrium thresholds.
B. determine the quantity of output that must be sold to cover all operating costs.
C. determine the optimal amount of debt financing to use.
D. calculate the minimum price of common stock for certain situations.

A. Interest expense
B. Packaging costs
C. Administrative salaries

A. to help the local economy.
B. in an effort to cover at least some of the variable cost.
C. unless variable costs are zero when production is zero.
D. if the selling price per unit exceeds the variable cost per unit.

22) At what rate must $400 be compounded annually for it to grow to $716.40 in 10
years?
23) How long will it take $750 to double at 8% compounded annually?

could
you withdraw each year and have nothing remaining at the end of five years?

inventory build-up prior to the Christmas season with:


28) Compute the payback period for a project with the following cash flows, if the
companys discount rate is 12%. Initial outlay = $450 Cash flows: Year 1 = $325
Year 2 = $ 65
Year 3 = $100

29) Arties Soccer Ball Company is considering a project with the following cash flows:
Initial outlay = $750,000 Incremental after-tax cash flows from operations Years 14 =
$250,000 per year Compute the NPV of this project if the companys discount rate is
12%.

Initial
outlay = $13,000 Cash flows: Year 1 = $5,000
Year 2 = $3,000
Year 3 = $9,000

31) Most firms use the payback period as a secondary capital-budgeting technique,
which,
in a sense, allows them to control for risk.

32) Which of the following statements about the MIRR is false?
A. If a projects MIRR exceeds the firms discount rate, the project is acceptable.
B. The MIRR has the same reinvestment assumption as the IRR.
C. A projects MIRR could be lower than a projects IRR.
D. The MIRR has the same reinvestment assumption as the NPV.

33) Many firms today continue to use the payback method but employ the NPV or IRR
methods as secondary decision methods of control for risk.

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


net
cash flow of $6,000 per year for five years. Calculate the NPV of the assembler if the
required rate of return is 12%. (Round your answer to the nearest $1.)
37) The most expensive source of capital is:

38) The marginal cost of preferred stock is equal to:
projects is:
the
yield to maturity on these bonds is 14%. If the firms tax rate is 40%, what is the cost of
debt to J & B?

preferred stock, and 50% common stock far into the future. The required return on each
component is: debt10%; preferred stock11%; and common stock18%. Assuming a
40%
marginal tax rate, what after-tax rate of return must Shawhan Supply earn on its
investments if the value of the firm is to remain unchanged?

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

tax
rate is 40%. Zybeck presently has 750,000 shares of common stock which have a
market
value of $10 per share, no preferred stock, and no debt. The firm is considering two
alternatives to finance a new product:

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

if its
current capital structure is too conservative. Lever Brotherss present EBIT is $3
million,
and profits available to common shareholders are $1,680,000, with 457,143 shares of
common stock outstanding.

46) _________ risk is generally considered only a paper gain or loss.

denominated in a currency different from the country in which the bond is issued, is
called
a(n):

interest
rate and currency swaps.

adjust until the foreign exchange market and the money market reach equilibrium is
called
the:

forward contract is:



A. price-earnings (P/E) ratios.
B. advantages in a foreign country.
C. beta risk.
D. portfolio risk.
FIN 370 FINAL EXAM Set 3

ANSWERS $24 Only

Which of the following best describes the goal of the firm?
2) The true owners of the corporation are the:
A. preferred stockholders.
B. common stockholders.
C. holders of debt issues of the firm.
D. board of directors of the firm.
A. A slow-down in economic growth
B. A seasonal reduction in sales revenues
C. Inadequate investment opportunities
D. A reduction in corporate profits
5) When public corporations decide to raise cash in the capital markets, what type of
financing vehicle is most favored?
A. Preferred stock
B. Corporate bonds
C. Retained earnings
D. Common stock
A. preferred stock.
B. common stock.
C. bankers acceptances.
D. corporate bonds.
A. Incremental cash flow counts
B. Risk/return tradeoff
C. Efficient capital markets
D. Profit is king
corporation.


10) Which of the following financial ratios is the best measure of the operating
effectiveness of a firms management?

3.5%. The firm has a return on equity of 17.5%. Calculate Marshalls debt ratio.

funds in a savings account at the local bank. Of the following choices, which one will
produce the largest sum at the end of 22 years?
pays interest (compouned) daily using a 365-day year. What is the effective annual rate
of return
(APY)?
15) Suppose that you wish to save for your childs college education by opening up an
educational IRA. You plan to deposit $100 per month into the IRA for the next 18 years.
Assume that you will be able to earn 10%, compounded monthly, on your investment.
How much will you have accumulated at the end of 18 years?
A. inventory.
C. a net change in cash for the period.
D. new financing needed.
A. determine accounts payable.
B. provide a detailed plan of future cash flows.
C. determine the level of investment in current and fixed assets.
D. determine the estimated income tax for the year.
A. It is a much more precise method of financial forecasting than a cash budget would
be.
B. It involves estimating the level of an expense, asset, or liability for a future period
as
a percent of the forecast for sales revenues.
C. It is the least commonly used method of financial forecasting.
D. It projects all liabilities as a fixed percentage of sales.
A. set appropriate equilibrium thresholds.
B. determine the quantity of output that must be sold to cover all operating costs.
C. calculate the minimum price of common stock for certain situations.
D. determine the optimal amount of debt financing to use.
A. Packaging costs
B. Administrative salaries
C. Interest expense
A. in an effort to cover at least some of the variable cost.
B. unless variable costs are zero when production is zero.
C. to help the local economy.
D. if the selling price per unit exceeds the variable cost per unit.
could you withdraw each year and have nothing remaining at the end of five years?
A. $3,408.88
B. $2,465.78
C. $5,008.76
D. $3,525.62
A. depends upon the number of discount periods.
B. increases as the discount rate increases.
C. is generally larger than the future sum.
D. increases as the number of discount periods increase.
24) How long will it take $750 to double at 8% compounded annually?
A. 9 years
B. 12 years
C. 48 months
D. 6.5 years
inventory build-up prior to the Christmas season with:
12%.
30) Compute the payback period for a project with the following cash flows, if the
companys discount rate is 12%. Initial outlay = $450
Cash flows: Year 1 = $325
Year 2 = $ 65
Year 3 = $100
31) Which of the following is considered to be a deficiency of the IRR?
A. It fails to utilize the time value of money.
B. It fails to properly rank capital projects.
C. It is not useful in accounting for risk in capital budgeting.
D. It could produce more than one rate of return.
which, in a sense, allows them to control for risk.
33) You have been asked to analyze a capital investment proposal. The projects cost
is
your
firm discounts capital projects at 15.5%. What is the projects MIRR?
net cash flow of $6,000 per year for five years. Calculate the NPV of the assembler if
the
required rate of return is 12%. (Round your answer to the nearest $1.)
A. real rate of return.
B. NPV.
C. cost of capital.
D. IRR.
A. debt.
B. new common stock.
C. retained earnings.
D. preferred stock.
38) The marginal cost of preferred stock is equal to:
A. (1 tax rate) times the preferred stock dividend divided by net price.
B. the preferred stock dividend divided by its par value.
C. the preferred stock dividend divided by the net market price.
D. the preferred stock dividend divided by market price.
projects is:
financed by selling $20 million in new debt and $30 million in new common stock. The
before-tax required rate of return on debt is 9%, and the required rate of return on equity
is 14%. If the company is in the 40% tax bracket, what is the marginal cost of capital?
40% marginal tax rate, what after-tax rate of return must Shawhan Supply earn on its
42) Given the following information, determine the risk-free rate.
Cost of equity = 12%
Beta = 1.50
Market risk premium = 3%
if
its current capital structure is too conservative. Lever Brotherss present EBIT is $3
million, and profits available to common shareholders are $1,560,000, with 342,857
shares of common stock outstanding. If the firm were to instead have a debt ratio of
60%,
additional interest expense would cause profits available to stockholders to decline to
$1,440,000, but only 228,571 common shares would be outstanding. What is the
difference in EPS at a debt ratio of 60% versus 40%?
tax rate is 40%. Zybeck presently has 750,000 shares of common stock which have a
market value of $10 per share, no preferred stock, and no debt. The firm is considering
two alternatives to finance a new product: (a) the issuance of $6 million of 10% bonds,
or
(b) the issuance of 60,000 new shares of common stock. If Zybeck issues common
stock
this year, what will projected EPS be next year?
if
its current capital structure is too conservative. Lever Brotherss present EBIT is $3
shares
of common stock outstanding. If the firm were to instead have a debt ratio of 40%,
additional interest expense would cause profits available to stockholders to decline to
$1,560,000, but only 342,857 common shares would be outstanding. What is the
difference in EPS at a debt ratio of 40% versus 20%?
denominated in a currency different from the country in which the bond is issued, is
called a(n):
interest rate and currency swaps.
adjust until the foreign exchange market and the money market reach equilibrium is
called the:

A. exchanged for another currency at a specified price.
B. traded for another at an agreed-upon future price.
C. immediately exchanged for another currency.
D. deposited in a foreign bank.
forward contract is:
A. a good buy.
B. overvalued.
C. undervalued.
D. at equilibrium.

A. advantages in a foreign country.
B. portfolio risk.
C. price-earnings (P/E) ratios.
D. beta risk.


A. General partners
B. Sole proprietors
D. Both a and b
A. Sole proprietorship, general partnership, corporation, limited partnership
B. General partnership, sole proprietorship, limited partnership, corporation
C. Corporation, limited partnership, general partnership, sole proprietorship
D. Sole proprietorship, general partnership, limited partnership, corporation
5) __________ is a method of offering securities to a limited number of investors.
6) When public corporations decide to raise cash in the capital markets, what type of
financing vehicle is most favored?
corporation.
3.5%. The
firm has a return on equity of 17.5%. Calculate Marshalls debt ratio.

12) Another name for the acid test ratio is the:
13) If you are an investor, which of the following would you prefer?

14) Edward Johnson decided to open up a Roth IRA. He will invest $1,800 per year for
the next 35
years. Deposits to the Roth IRA will be made via a $150 payroll deduction at the end of
each month. Assume that Edward will earn 8.75% over the life of the IRA. How much
will he have at the end of 35 years?
pays interest (compouned) daily using a 365-day year. What is the effective annual rate
of return (APY)?
A. 4.86%
B. 5.02%
C. 3.61%
D. 4.75%
A. determine the estimated income tax for the year.
B. determine accounts payable.
C. provide a detailed plan of future cash flows.
D. determine the level of investment in current and fixed assets.
A. Budgets allow for performance evaluation.
B. Budgets provide the basis for corrective action when actual figures differ from the
budgeted
figures.
C. Budgets compare historical costs of the firm with its current cost performance.
D. Budgets indicate the need for future financing.


B. Interest expense
C. Packaging costs
could you
withdraw each year and have nothing remaining at the end of five years?
B. is generally larger than the future sum.
C. depends upon the number of discount periods.
D. increases as the number of discount periods increas.
24) Which of the following is the formula for compound value?
inventory
build-up prior to the Christmas season with:

28) For the NPV criteria, a project is acceptable if the NPV is __________, while for the
profitability index, a project is acceptable if the profitability index is __________.
D. greater than zero, greater than one
29) Your company is considering a project with the following cash flows: Initial outlay =
$1,748.80
Cash flows Years 16 = $500 Compute the IRR on the project.
12%.
which, in a sense, allows them to control for risk.
32) You have been asked to analyze a capital investment proposal. The projects cost is
your firm discounts capital projects at 15.5%. What is the projects MIRR?

33) Which of the following is considered to be a deficiency of the IRR?
net cash flow of $6,000 per year for five years. Calculate the NPV of the assembler if
the required rate of return is 12%. (Round your answer to the nearest $1.)
38) Cost of capital is:
A. the average cost of the firms assets.
B. the rate of return that must be earned on additional investment if firm value is to
remain
unchanged.
C. the coupon rate of debt.
D. a hurdle rate set by the board of directors.
projects is:
the yield to
maturity on these bonds is 14%. If the firms tax rate is 40%, what is the cost of debt to J
& B?
financed by selling $20 million in new debt and $30 million in new common stock. The
before-tax required rate of return on debt is 9%, and the required rate of return on equity
is 14%. If the company is in the 40% tax bracket, what is the marginal cost of capital?
40% marginal tax rate, what after-tax rate of return must Shawhan Supply earn on its
tax rate is 40%. Zybeck presently has 750,000 shares of common stock which have a
market value of $10 per share, no preferred stock, and no debt. The firm is considering
two alternatives to finance a new product: (a) the issuance of $6 million of 10% bonds,
or (b) the issuance of 60,000 new shares of common stock. If Zybeck issues common
stock this year, what will projected EPS be next year?

if its current capital structure is too conservative. Lever Brotherss present EBIT is $3
60%, additional interest expense would cause profits available to stockholders to
decline to $1,440,000, but only 228,571 common shares would be outstanding. What is
the difference in EPS at a debt ratio of 60% versus 40%?
if its current capital structure is too conservative. Lever Brotherss present EBIT is $3
40%, additional interest expense would cause profits available to stockholders to
decline to $1,560,000, but only 342,857 common shares would be outstanding. What is
the difference in EPS at a debt ratio of 40% versus 20%?
denominated in a
currency different from the country in which the bond is issued, is called a(n):
48) _________ risk is generally considered only a paper gain or loss.
adjust until
the foreign exchange market and the money market reach equilibrium is called the:
forward
contract is:
FIN 403 FINAL EXAM

ANSWERS $22 Only

1.The current currency in Italy is called:
A)Yen
B)Yuan
C)Lira
D)Euro
2.A Forward contract:
A) Will guarantee the lowest exchange rate
B) Will guarantee a specific exchange rate
C) Will guarantee the best possible exchange rate
D)None of the above
3.If the US Dollar appreciates compared to the Euro:
A)US exports to Europe will probably increase
B)US held assets in Europe will increase in value
C)US imports from Europe will probably increase
D)US imports from Europe will probably decrease
4.All else equal, if the Fed increases interest rates:
A)The US Dollar will probably increase in value
B)The US Dollar will probably decrease in value
C)The US Dollar will probably not be affected
5.In general, when speculating on exchange rate movements, the speculator will borrow
the currency that is expected to appreciate and invest in the country whose currency is
expected to depreciate.
A)true.
B)false.
6. To force the value of the pound to appreciate against the dollar, the Federal
Reserve should:
A) sell dollars for pounds in the foreign exchange market and the European Central
Bank (ECB) should sell dollars for pounds in the foreign exchange market.
B) sell pounds for dollars in the foreign exchange market and the European Central
Bank (ECB) should sell dollars for pounds in the foreign exchange market.
C) sell pounds for dollars in the foreign exchange market and the European Central
Bank (ECB) should not intervene.
D) sell dollars for pounds in the foreign exchange market and the European Central
Bank (ECB) should sell pounds for dollars in the foreign exchange market.
7. A strong dollar is normally expected to cause:
A) high unemployment and high inflation in the U.S.
B) high unemployment and low inflation in the U.S.
C) low unemployment and low inflation in the U.S.
D) low unemployment and high inflation in the U.S.
8. The value of the Canadian dollar, Japanese yen, and Australian dollar with respect to
the U.S. dollar are part of a:
A)pegged system.
B)fixed system.
C)managed float system.
D)crawling peg system.
9. Graylon, Inc., based in Washington, exports products to a German firm and will
receive payment of 200,000 in three months. On June1, the spot rate of the euro was
$1.12, and the 3-month forward rate was $1.10. On June 1, Graylon negotiated a
forward contract with a bank to sell 200,000 forward in three months.The spot rate of
the euroon September 1 is $1.15. Graylon will receive $_________ for the euros.
A) 224,000
B) 220,000
C) 200,000
D) 230,000
10. The demand for U.S. exports tends to increase when:
A)economic growth in foreign countries decreases.
B)the currencies of foreign countries strengthen against the dollar.
C)U.S. inflation rises.
D)none of the above
11. Which of the following theories identifies specialization as a reason for international
business?
A)theory of comparative advantage.
B)imperfect markets theory.
C)product cycle theory.
D)none of the above
12. As a result of the European Union, restrictions on exports between _______ were
reduced or eliminated.
A)member countries and the U.S.
B) member countries
C) member countries and European non-members
D) none of the above
13. Which of the following is an example of direct foreign investment?
A)exporting to a country.
B)establishing licensing arrangements in a country.
C)purchasing existing companies in a country.
D)investing directly (without brokers) in foreign stocks.
14. Which of the following industries would most likely take advantage of lower costs in
some less developed foreign countries?
A)assembly line production.
B)specialized professional services.
C)nuclear missile planning.
D)planning for more sophisticated computer technology.
15.Direct foreign investment into the U.S. represents a ________.
A)capital inflow
B)trade inflow
C)capital outflow
D)trade outflow
16.Suppose the United States and Great Britain are on the gold standard and the price
of gold in the U.S. is fixed at $100 per ounce and the price of gold in Britain is fixed at
50. What exchange rate must prevail between the dollar and the pound?
A)1 = $2
B)2 = $1
C) 1 = $0.50
17.The Euro is
A)the common currency for some European countries
B)an imaginary currency basket made up of 12 different currencies
C)pegged to the US Dollar at a fixed exchange rate
D)A and C are both correct
18. Assume the Canadian dollar is equal to $.88 and the Peruvian Sol is equal to $.35.
The value of the Peruvian Sol in Canadian dollars is:
A)about .3621 Canadian dollars.
B)about .3977 Canadian dollars.
C)about 2.36 Canadian dollars.
D)about 2.51 Canadian dollars
19. Which of the following is not true with respect to spot market liquidity?
A) The more willing buyers and sellers there are, the more liquid a market is.
B) The spot markets for heavily traded currencies such as the Japanese yen are very
liquid.
C) A currencys liquidity affects the ease with which an MNC can obtain or sell that
currency.
D) If a currency is illiquid, an MNC is typically able to quickly purchase that currency at a
reasonable exchange rate.
20. _________ is not a factor that causes currency supply and demand schedules to
change.
A) Relative inflation rates
B) Relative interest rates
C) Relative income levels
D) Expectations
E) All of the above are factors that cause currency supply and demand schedules to
change.
21. One advantage of monetary union
A) Loss of national monetary and exchange-rate political independence.
B) Transition of asymmetric macro-economic shocks.
C) Reduced transactions costs and the elimination of exchange-rate uncertainty.
D) Enhanced control of interest rates in the member countries
22. A large increase in the income level in Mexico along with no growth in the U.S.
income level is normally expected to cause (assuming no change in interest rates or
other factors) a(n) ______ in Mexican demand for U.S. goods, and the Mexican peso
should _______.
A)increase; appreciate
B)increase; depreciate
C)decrease; depreciate
D)decrease; appreciate
23. A forward contract can be used to lock in the __________ of a specified currency for
a future point in time.
A)purchase price
B)sale price
C)A or B
D)none of the above
24. When the real interest rate is relatively low in a given country, then the currency of
that country is typically expected to be:
A)weak, since the countrys quoted interest rate would be high relative to the inflation
rate.
B)strong, since the countrys quoted interest rate would be low relative to the inflation
rate.
C)strong, since the countrys quoted interest rate would be high relative to the inflation
rate.
D)weak, since the countrys quoted interest rate would be low relative to the inflation
rate.
25. Currency futures contracts sold on an exchange:
A)contain a commitment to the owner, and are standardized.
B)contain a commitment to the owner, and can be tailored to the desire of the owner.
C)contain a right but not a commitment to the owner, and can be tailored to the desire of
the owner.
D)contain a right but not a commitment to the owner, and are standardized.
26. Which of the following is the most likely strategy for a U.S. firm that will be receiving
Swiss francs in the future and desires to avoid exchange rate risk (assume the firm has
no offsetting position in francs)?
A)purchase a call option on francs.
B)sell a futures contract on francs.
C)obtain a forward contract to purchase francs forward.
D)all of the above are appropriate strategies for the scenario described.
27. If you expect the euro to depreciate, it would be appropriate to _______ for
speculative purposes.
A)buy a euro call and buy a euro put
B)buy a euro call and sell a euro put
C)sell a euro call and sell a euro put
D)sell a euro call and buy a euro put
28. If U.S. inflation suddenly increased while European inflation stayed the same, there
would be:
A) an increased U.S. demand for euros and an increased supply of euros for sale.
B) a decreased U.S. demand for euros and an increased supply of euros for sale.
C) a decreased U.S. demand for euros and a decreased supply of euros for sale.
D) an increased U.S. demand for euros and a decreased supply of euros for sale.
29.Countries that have adopted the euro must agree on a single ________ policy.
A)monetary
B)fiscal
C)worker compensation
D)foreign relations
30.It has been argued that the exchange rate can be used as a policy tool. Assume that
the U.S. government would like to reduce unemployment. Which of the following is an
appropriate action given this scenario?
A)weaken the dollar.
B)strengthen the dollar.
C)buy dollars with foreign currency in the foreign exchange market.
D)implement a tight monetary policy.
31. Assume a two country world: Country A and Country B. Which of the following is
correct about purchasing power parity (PPP) as related to these two countries?
A)If Country As inflation rate exceeds Country Bs inflation rate, Country As currency
will weaken.
B)If Country As interest rate exceeds Country Bs inflation rate, Country As currency
will weaken.
C)If Country As interest rate exceeds Country Bs inflation rate, Country As currency
will strengthen.
D)If Country Bs inflation rate exceeds Country As inflation rate, Country As currency
will weaken.
32. Based on interest rate parity, the larger the degree by which the foreign interest rate
exceeds the U.S. interest rate, the:
A)larger will be the forward discount of the foreign currency.
B)larger will be the forward premium of the foreign currency.
C)smaller will be the forward premium of the foreign currency.
D)smaller will be the forward discount of the foreign currency.
33. If interest rates on the euro are consistently below U.S. interest rates, then for the
international Fisher effect (IFE) to hold:
A)the value of the euro would often appreciate against the dollar.
B)the value of the euro would often depreciate against the dollar.
C)the value of the euro would remain constant most of the time.
D)the value of the euro would appreciate in some periods and depreciate in other
periods, but on average have a zero rate of appreciation.
34. Translation exposure reflects:
A)the exposure of a firms ongoing international transactions to exchange rate
fluctuations.
B)the exposure of a firms local currency value to transactions between foreign
exchange traders.
C)the exposure of a firms financial statements to exchange rate fluctuations.
D)the exposure of a firms cash flows to exchange rate fluctuations.
35. Depreciation of the euro relative to the U.S. dollar will cause a U.S.-based
multinational firms reported earnings (from the consolidated income statement) to
_______. If a firm desired to protect against this possibility, it could stabilize its
reported earnings by _______ euros forward in the foreign exchange market.
A)be reduced; purchasing
B)be reduced; selling
C)increase; selling
D)increase; purchasing
36.If revenues and costs are equally sensitive to exchange rate movements, MNCs may
reduce their economic exposure by restructuring their operations to shift the sources of
costs or revenues to other locations so that:
A)cash inflows exceed cash outflows in each foreign currency.
B)cash outflows exceed cash inflows in each foreign currency.
C)cash inflows match cash outflows in each foreign currency.
D)none of the above
37.When a foreign currency is perceived by a firm to be undervalued, the firm may
consider direct foreign investment in that country, as the initial outlay should be
relatively low.
A)true.
B)false.
38.Long-term forward contracts are a possible way to hedge the distant sale of fixed
assets in foreign countries, but they may not be available for many emerging market
currencies.
39. If a U.S. parent is setting up a French subsidiary, and funds from the subsidiary will
be periodically sent to the parent, the ideal situation from the parents perspective is a
____ after the subsidiary is established.
40.Like income tax treaties, ____________ help to avoid double taxation and stimulate
direct foreign investment.
41.When a foreign subsidiary is not wholly owned by the parent and a foreign project is
partially financed with retained earnings of the parent and of the subsidiary, then:
42.The dominant world currency since the end of World War II has been the
43. Consider a country that presently has a high level of unemployment because of
weak economic conditions. Its income levels are very low. This country may be an
attractive target as a result of ______ motives by U.S. firms that engage in direct
foreign investment.
44. Which of the following is a reason to consider international business?
45. Direct foreign investment would typically be welcomed if:
46. A macro assessment of country risk:
47. An MNC has a foreign manufacturing plant to capitalize on cheap production costs;
the MNC exports all the goods produced. It should be most concerned about the
countrys:
48.Country risk can affect an MNCs cash flows but cannot affect its cost of capital.
49.When entering into a forward contract, the forward rate usually contains a premium
(or discount) that reflects the difference between:
50. Transaction exposure reflects:
A)the exposure of a firms ongoing international transactions to exchange rate
fluctuations.
B)the exposure of a firms local currency value to transactions between foreign
exchange traders.
C)the exposure of a firms financial statements to exchange rate fluctuations.
D)the exposure of a firms cash flo
FIN 415 FINAL EXAM

ANSWERS $14 Only

The art of risk management is to identify risks specific to an organization and to respond
to them in an appropriate way.
All levels of an organization do not need to be included in the management of risk in
order for it to be effective.
Qualitative Risk Analysis Techniques seek to compare the relative significance of risk
facing a project in terms of the effect of their occurrence on the project outcome.
Quantitative techniques are used when the likehood of the investment or project
achieving its objectives with time and budget is required.
A forward exchange contract requires delivery at a specified future date of one currency
for a specific amount of another currency.
Risk tolerance is the degree that one is willing to risk losing some of his original
investment in exchange for a chance to earn a higher return.
Which of the following best describes risk management?
a. A formal process to identify risks.
b. A formal process to assess, identify and manage risk.
c. A formal process to cover up mis-management.
d. A formal process by the Board to direct operating activities.
e. None of the above.
Which of the following are soft benefits of risk management?
a. Enhancement of team spirit.
b. Proper risk allocation.
c. Improved Communications.
d. Improved Profits.
e. a and c.
What is the Delphi technique?
a. Consulting with a subject matter expert on the topic.
b. Consulting with senior management on a topic.
c. Used when assessing risk.
d. Consulting with the Board of Directors on a topic.
Which of the following are tools to manage risk?
a. Time value of money.
b. Qualitative.
c. Quantitative.
d. b & c.
Risk management is an essential part of the project and business planning cycle which
requires which of the
following:
a. Requires less strategy and more imagination and ingenuity.
b. Generates an unstructured response to risk in terms of alternative plans, solutions,
and contingencies.
c. is a thinking process requiring poor imagination and a lack of ingenuity.
d. requires acceptance that uncertainty exists.
e. generates an unrealistic attitude in an investment for staff by preparing them for risk
events rather than being taken by surprise when they arrive.
Market risk refers to:
a. The chance that a business may not find underwriters.
b. The chance that a firms product/service will not be successful in the market.
c. The chance that the issuer of a financial instrument will make some bad decisions
that are adversely affects it operations.
d. Gains or losses from secondary market sales due to general movements in financial
markets.
e. All of the above.
The proposed risk management assessment system will do all of the following, except:
a. Identify possible future markets.
b. Identify and manage risk.
c. Adjust strategy to respond to risk.
d. Increase changes of project and business success.
e. Ensure stock price increases.
Key components of program management include which of the following:
a. Organizational management.
b. Capital budgeting technique application.
c. Resource maximization.
d. Time-series analysis.
e. Monte Carlo Simulation.
Which of the following are outputs of risk identification
a. Historical Information.
b. Risk Symptoms.
c. Product or service descriptions.
d. Eliminated from the process.
Country risk analysis involves assessing which of the following?
a. Economic risk.
b. Political risk.
c. Government risk.
d. Cultural risk.
e. All of the above
Monte Carlo simulation does which of the following?
a. Gives you a practical, virtual simulation.
b. Does not produce a mathematical model.
c. Produces a mathematical model.
d. a & b.
e. b & c.
Which of the below is the best definition of business risk?
a. The variability in a firms earnings per share that derives from its sales variability in
conjunction with fixed interest costs and debt service.
b. The chance that a business firm will not be able to repay a loan.
c. The chance that paying the interest due to a firms creditors will result in losses to its
bond holders.
d. The variability in a firms earnings per share that derives from its sales variability in
conjunction with fixed operating costs.
FIN 419 FINAL EXAM

ANSWERS $9.99 Only

True/False
1. The sole proprietor has unlimited liability; his or her total investment in the business,
but not his or her personal assets, can be taken to satisfy creditors.
2. Time-value of money is based on the belief that a dollar that will be received at
some
future date is worth more than a dollar today.
3. Holders of equity have claims on both income and assets that are secondary to the
claims of creditors.
4. The possibility that the issuer of a bond will not pay the contractual interest or
principal payments as scheduled is called maturity risk.
5. The breakeven point in dollars can be computed by dividing the contribution margin
into the fixed operating costs.
Multiple-choice
6. The ________ is the extent of an assets risk. It is found by subtracting the
pessimistic
outcome from the optimistic outcome
a) Return
b) Standard deviation
c) Probability distribution
d) range
7. ________ measure(s) the risk of a capital budgeting project by estimating the NPVs
associated with the optimistic, most likely, and pessimistic cash flow estimates
a) simulations
b) risk-adjusted discount rates
c) sensitivity analysis
d) multiple regression analysis
8. If a firm uses an aggressive financing strategy,
a) it increases return and increases risk.
b) it increases return and decreases risk.
c) it decreases return and increases risk.
d) it decreases return and decreases risk.
9. The two major sources of short-term financing are
a) a line of credit and accounts payable.
b) accounts payable and accruals.
c) a line of credit and accruals.
d) accounts receivable and notes payable.
10. At the operating breakeven point, ________ equals zero.
a) sales revenue
b) fixed operating costs
c) variable operating costs
d) earnings before interest and taxes
Problems (show your work)
11. Xiao Li wishes to accumulate $50,000 by the end of 10 years by making equal
annual
end-of-year deposits over the next 10 years. If Xiao Li can earn 5 percent on her
investments, how much must she deposit at the end of each year?
a) $3,975
b) $6,475
c) $5,000
d) $4,513
12. Hayley makes annual end-of-year payments of $6,260.96 on a five-year loan with
an 8
percent interest rate. The original principal amount was
a) $31,000.
b) $30,000.
c) $25,000.
d) $20,000.
13. Hewitt Packing Company has an issue of $1,000 par value bonds with a 14 percent
annual coupon interest rate. The issue has ten years remaining to the maturity date.
Bonds of similar risk are currently selling to yield a 12 percent rate of return. The
current value of each Hewitt bond is ________.
a) $791.00
b) $1,000
c) $1,052.24
d) $1,113.00
14. Yong Importers, an Asian import company, is evaluating two mutually exclusive
projects, A and B. The relevant cash flows for each project are given in the table below.
The cost of capital for use in evaluating each of these equally risky projects is 10
percent.

The NPVs of projects A and B are ________.
A) $95,066 and $56,386, respectively.
B) $56,386 and $95,066, respectively.
C) -$56,386 and -$95,066, respectively.
D) none of the above.
FIN 571 FINAL EXAM

ANSWERS $14.99 Only

1) Which of the following statements is true?
a) The Principle of Diversification states that investors are better off by investing in
two or three good assets even within the same industry.
b) The Principle of Diversification states that investors are better off by investing in
different types of assets.
c) The Principle of Diversification states that investors are better off by investing in
risk-free assets.
d) The Principle of Diversification states that investors are better off by investing in
an industry of their choice.

2) Which of the following investments is more likely to give you a diversified
common stock portfolio?
a) An index fund investing in stocks in the S&P 500 and in a money market fund.
b) Any stock mutual fund investing in a variety of industries in the United States.
c) A mutual fund investing in European and Asian stocks.
d) An international mutual fund investing in a wide variety of stocks within and
outside ones country.

3) Which of the following assets would pay a dividend?
a) U.S. Treasury security
b) Municipal bond
c) Share of preferred stock
d) Corporate bond

4) The market price of a bond in todays dollars is the future value of its
promised future coupon and principal payments. True or False
5) The dot-com bubble reminds us about what?
a) Capital markets are probably never efficient.
b) Capital markets are always inefficient.
c) Capital markets are not always efficient.
d) All of these

6) A stock with a beta less than 1.0 will rise or fall more than the market. True
or False (it would be less risky and volatile than the rest of the market)
7) Which of the following statements is false?
a) Treasury bills (T-bills) have an original maturity of one year or less when they
are issued.
b) Treasury notes and bonds have an original maturity of one year or more.
c) Negotiable CDs are time deposits issued by domestic or foreign commercial
banks that can be sold to a third party.
d) Munis are long-term securities, issued by state and local governments, and are
exempt from federal taxation.

8) The weighted average cost of capital (WACC) can be computed using the
formula: WACC = (1 L)re + L(1 T)rd. Which (if any) of the f ollowing
statements is true?
a) L is equity divided by firm value.
b) T is the personal tax rate.
c) re is the required return on debt.
d) None of these

9) Net present value (NPV) is the difference between:
a) What a capital budgeting project produces and what it is worth (its market
value)
b) What a capital budgeting project costs and what it is worth (its market value)
c) What a capital budgeting project produces and what it is pays
d) Cash flows before taxes and cash flows after taxes

10) The NPV f or a project equals the present value of the future cash flows
divided by the initial investment. True or False
11) Firms that use debt financing .
a) Can always claim the interest deductions.
b) Must generate sufficient income from operations to claim the deduction.
c) Must have high operating leverage.
d) All of these

12) The use of debt in the firms capital structure is called:
a) Homemade leverage.
b) Operating leverage.
c) Financial leverage.
d) Decreasing leverage.

13) A firms capital structure policy is an established guide for the firm to
determine the amount of money it will pay out as dividends. True or False
(dividends policy)
14) Because zero-coupon bonds make only a single payment at maturity, they
are the deepest-discount bonds possible. True or False
15) Which of the below is an example of one acting on the Principle of Market
Efficiency.
a) You are going through Wal-Mart and the sacker tells you about a hot Brazilian
fund. You call up your broker and order 100 shares.
b) Your sister-in-law is visiting. She tells you that her boss told her to invest in IBM.
You go out and buy 100 shares of IBM.
c) You are at a barbeque and an acquaintance tells you they just read in The Wall
Street Journal that Acme, Inc. has increased its dividend. Two days later you buy
100 shares of Acme.
d) Whenever you hear a hot tip, you assume it is too late for you to expect to
make a profit.

16) A yield curve or term structure of interest rates is: _________
a) Upward sloping if yields increase with maturity.
b) Downward sloping if yields decrease with maturity
c) Upward sloping if yields decrease with maturity
d) Both a & b are correct

17) If the yield to maturity f or a bond is less than the bonds coupon rate, then
the market value of the bond is: _______
a) Greater than the par value.
b) Less than the par value.
c) Equal to the par value.
d) Cannot tell

18) Your f ather gave you a gift of $20,000 f or good behavior and you wanted to
invest in the stock market. How much will your investment grow in five years,
assuming that you earned 8% each and every year?

19) How much is eight $2000 payments worth to us today discounted at 7%?
20) What is the present value of $50,000 discounted at 15% f or 10 years?

21) If I made seven, $1000 payments into a 401(k) account, how much would
my account be worth after 20 years if I made 13% a year during that
investment?
22) What is the value of a $100 investment that earned 6% per year f or five
years?
23) What is $1 million discounted at 10% f or f our years worth to us today?

24) You won the lottery and paid you $100,000 per year f or the next 10 years.
Assuming that you placed your winnings in an investment account, how much
would that amount grow if you earned 6% during that time period?

25) What is the present value of $500 discounted at 5% f or five years?
FP 101 FINAL EXAM

ANSWERS $24 Only

1) When does repayment of a PLUS loan begin?
A. 6 months after disbursement
B. 6 months after graduation
C. 9 months after graduation
D. 2 months after disbursement
2) Which of the following is true about credit reports?
A. A credit report does not list requests for your credit report.
B. You always have to pay for a credit report
C. There is only one credit bureau that provides credit reports
D. You can get a free credit report by contacting a credit bureau.
3) Which of the following is true about student loans?
A. All student loans are subsidized.
B. All student loans are issued by the federal government.
C. Rates on student loans tend to be more favorable than other types of consumer
credit.
D. You do not need to be a US citizen to obtain a loan from a federal program.
4) Which of the following is not a good reason to refinance a home mortgage?
A. A reduction in the term of the mortgage
B. Access to the equity in the home
C. A reduction in the interest rate of at least 1 perccent
D. A significant increase in the monthly payment.
5) Which of the following is not true about student loans?
A. There are two types of student loans: subsidized or unsubsidized.
B. You may qualify for a loan even if you are in default on another student loan.
C. It is possible to defer payment on some student loans until after you graduate.
D. They often carry lower interest rates than other types of loans or credit cards.
6) Which of the following is considered a sign of credit card debt trouble?
A. You are at or over the limit on all of your credit card accounts
B. Dont use your credit cards to pay for regular expenditures
C. You avoid credit cards with high interest rates
D. You pay your credit card balances in full every month
7) Which of the following is not a good option if you recognize signs of credit trouble in
yourself?
A. You should think about ways to cut expenses
B. You should use your savings to pay your bills.
C. You should get advice from a legitimate consumer counseling organization
D. You should think about steps to reduce your debt
8) Which type of mortgage loan features rates that change periodically with market
conditions?
A. Growing equity mortgage
B. Reverse equity mortgage
C. ARM
D. Conventional mortgage
9) Which of the following statements is true of adjustable-rate mortgages?
A. The interest rate changes on ARMs are limited per year and per lifetime.
B. There is no limit as the amount of payment change on an ARM.
C. They cannot be converted to fixed-rate loans.
D. They generally carry higher initial interest rates than conventional mortgages.
10) Which of the following is considered an advantage of home ownership?
A. Profits on real estate are guaranteed.
B. Mortgage payments are always lower than rent payments.
C. You are responsible for all repairs and maintenance.
D. Interest paid on the mortgage of your home is tax deductible.
11) Who is the person designated to carry out the provisions of a will?
A. the trustee
B. the beneficiary
C. the executor or executrix
D. the guardian
12) Which of the following best describes the role of a real estate broker?
A. dealer, who purchases goods for resale to consumers
B. lessor, who owns the asset and offers it for lease
C. principal, who has given responsibility to another
D. agent, who is acting on behalf of another person
13) Which of the following health plans limits your choice of doctors to those under
contract with the plan?
A. Indemnity plan
B. HMO plan
C. Consumer Choice plan
D. Medicare Part D
14) Which of the following is not a step in the housing decision process?
A. Negotiate terms of the lease.
B. Identify the costs of home ownership.
C. Consider whether to rent or buy.
D. Determine your housing needs.
15) What type of auto insurance provides coverage from a tree falling on your car as it
sits in your driveway?
A. collision coverage.
B. comprehensive physical damage coverage.
C. property damage liability coverage.
D. bodily injury liability.
16) What is the basis for the concept of risk pooling?
A. the law of large numbers.
B. statistical variation.
C. the laws of probability.
D. the law of averages.
17) If a single parent of a minor child dies intestate without having written a valid will
what will happen to the child?
A. The state will appoint a guardian for the child who may or may not be a relative.
B. The child will be sent to live in a state-run orphanage
C. The grandparents automatically become the legal guardians of the child.
D. The childs other parent automatically becomes the legal guardian of the child.
18) What is the major advantage of term life insurance over whole life insurance?
A. term life tends to have lower premiums than whole life.
B. term life has a choice of investments; whole life does not.
C. term life is available without proof of insurability; whole life is not.
D. term life always has a constant premium; whole life does not.
19) How does life insurance differ from other types of insurance?
A. The risk of a policy payout is 100 percent.
B. Life insurance policies are very short-term.
C. Insurers almost never need to pay a claim.
D. Life insurance is not based on risk pooling.
20) Which of the following is not one of the main sources of auto dealer profits?
A. licensing fees
B. service contracts
C. manufacturer allowances
D. profit to be on traded vehicle
21) When do medical expenses qualify as a deduction?
A. When the total is less than your adjusted gross income.
B. When the total is greater than half of your adjusted gross income.
C. When the total is less that the designated percentage of your gross income.
D. When the total is greater than the designated percentage of your adjusted gross
income.
22) Which of the following is considered a tax credit, which will directly reduce the taxes
you owe?
A. Gifts to charity
B. Medical expenses
C. Mortgage interest
D. Earned Income Credit
23) Which of the following statements is not true regarding spousal benefits under
Social Security?
A. There are no protections in the program for women who do not work outside the
home.
B. If a woman remarries, she will not be eligible for a divorcee benefit.
C. A divorced woman may receive 50 percent of her ex-husbands benefits if she
qualifies.
D. You can qualify for benefits if your spouse is fully insured in the program.
24) What type of retirement benefit plan is based on a formula that considers your years
of service and highest salary?
A. fixed salary plan.
B. variable salary plan.
C. defined benefit plan.
D. defined contribution plan.
25) What is the name for reimbursement accounts for qualified medical and child care
expenses?
A. deferred compensation plans.
B. option plans.
C. flexible spending accounts.
D. cafeteria plans.
26) Which of the following is a result of a dollar cost averaging investment strategy?
A. lower average purchase price than the average price over the long term
B. greater return than a buy-and-hold strategy if prices are rising
C. higher average purchase price than the average price over the long term
D. smaller return than a buy-and-hold strategy if prices are rising
27) Which retirement saving program has a benefit that will depend on your yearly
contribution and the rate of return on inves
A. fixed salary plan.
B. variable salary plan.
C. defined benefits plan.
D. defined contribution plan.
28) How do many employer based retirement plans minimize taxes?
A. By maximizing tax credits
B. By increasing the number of exemptions
C. By increasing itemized deductions
D. By reducing taxable income
29) Which of the following is not a good option to consider if you dont have enough
money to retire?
A. rely on family
B. continue to work
C. increase savings
D. increase expenses
30) What is one reason many people are not financially very well prepared for
retirement?
A. They are too short-sighted.
B. They focus too much on long-term goals.
C. They overestimate inflation.
D. They fail to focus on the averages.
HCP 220 FINAL EXAM

ANSWERS $35 Only

Pharmacy Calculations
I. Fractions

Select the correct answer for each test question.

1. 1/4 X 4/7
A. 5/28
B. 4/11
C. 3/10
D. 7/28
E. None of these

2. 3/5 X 1/8
A. 5/12
B. 3/40
C. 3/13
D. 5/8
E. 4/13

3. 1/75 + 1/150
A. 2/1
B. 1/75
C. 2/75
D. 2/150
E. 1/50

4. 1/8 divided by 1/4
A. 1/2
B. 1/4
C. 1/6
D. 1/32
E. 2/1
HCP220 Pharmacy Calculations
II. Ratios, Proportions, and Percents


5. Convert 6% to a decimal.
A. 0.06
B. 0.60
C. .006
D. 0.00006
E. 0.660

6. Convert 20% to a fraction.
A. 1/2
B. 1/5
C. 1/4
D. 1/3
E. 1/10

7. Express 5% as a ratio.
A. 1:10
B. 1:5
C. 1:100
D. 1:20
E. 1:2

8. Solve for X in the proportion 1/5 = X/20 the answer is 4

Match the letter in the right column with the question on the left. Refer to Table 5-1 on p.
38 for
equivalents of U.S. to metric measures and to Table 5-2 on p. 39 for units of
measurement in the
household system.
9. 3 t = ___ mL

15
10. 15 mL = ___ t

3
11. 1/2 gr = ___ mg

0.4
12. 120 mL = ___ oz

4
13. 1/150 gr = ___ mg

10
14. 1/3 oz = ___ mL

30
15. 2 cups = ___ oz

16
16. 8 oz = ___ mL

240
17. 1.5 kg = ___ g

1,500
18. 0.5 L = ___ mL

500
19. 91
o
F = ___
o
C

32.8
20. 1800 = ___ PM

6

A 4
B 1,500
C 30
D 240
E 15
F 0.4
G 500
H 16
I 10
J 3
K 32.8
L 6
IV. Calculations Using Prescriptions and Medications

Refer to the following prescription to answer questions 21 through 26. Refer to Table 7-
1 on p.
50 for common prescription abbreviations.

21. How many times a day should John take the Zantac

22. How many times can the prescription be refilled?

23. How much Zyrtec should you dispense?

24. If the patient takes the medication as prescribed, for how many days will the
prescription
last?

25. What strength tablets should the pharmacist dispense?

26. How many times a day should Mary take the Zantac

V. Abbreviations

Refer to the following prescriptions when answering questions 27 through 38.

27. How many times can the prescription for Tylenol #3 be refilled?

28. How many times a day should the patient take Zantac

29. If the patient can get only 3 refills of Zantac, how many tablets will the patient
receive after
the prescription is initially filled?
30. How many times a day should the patient take Tylenol tablets?

31. What is the strength of the Zantac tablets?

32. How much Tylenol #3 should the patient take at one time?
33. What is the route of administration for Zantac medications?
34. How much Tylenol #3 should you dispense?
35. What does the term prn mean?
36. What does the symbol Rx mean?
37. What necessary component is missing from Dr. Smiths prescription for Tylenol
#3?
38. For what reason is Tylenol ordered?
VI. Drug Dosage Calculations
39. Ordered: Valium

5 mg IV stat
On hand: Valium

10 mg/2 mL
Amount to administer:

40.
Ordered: Lanoxin

0.25 mg p.o. daily
On hand: Lanoxin

0.125 mg

41. Ordered: Nitroglycerin 0.4 mg po stat
On hand: Nitroglycerin 1/150 gr per tablet
A. 10 tabs
B. 4 tabs
C. 1 tab
D. 15 tabs
E. 2 tabs
42. Ordered: Amoxicillin 0.5 g p.o. every 6 hours
On hand: Amoxicillin suspension 250 mg/5 ml
Amount to administer for one dose:

43. Ordered: Halcion

0.25 mg p.o. h.s.
On hand: Halcion

0.125 mg tablets
Amount to send to the nursing floor for a one-day supply:

44. Ordered: Lasix

40 mg b.i.d.
On hand: Lasix

20 mg
Amount to administer per day:

45. Ordered: Nalfon 300 mg p.o. daily
On hand: Nalfon 600 mg
Amount to administer per dose

46.
Ordered: Xanax

1.5 mg p.o. t.i.d.
On hand: Xanax

2 mg tablets scored into fourths
Amount to administer for one dose:

47.
Ordered: Zofran

8 mg p.o. b.i.d.
On hand: Zofran

liquid 4 mg/5 mL
Amount to administer for one dose: ___b and c______
VII. Injectable Drug Dosages and Intravenous Fluid Drug Therapy

Part A: Match the letter in the right column with the question on the left.

A Electronic flow clamps
the needle
Cannula electronic flow clamp
Parenteral other than using the
gastrointestinal tract

Gauge scale of measurement for needles

Infusion pump long portion of the needle

Controllers device keeps constant flow rate
IV bolus iv fluid over a period of time
B IV fluid over a period of time
C Device keeps constant flow
rate
D Scale of measurement for
needles
E Other than using the
gastrointestinal tract
F Sealed glass
G Long portion of the needle
H Pointed end of the needle
Part B: Select the correct answer for the following questions.
56. What is the name of the device attached to the hub of the IV catheter that allows
access to
the vein for IV push medications?
57. All the following are examples of intravenous route of drug administration EXCEPT:
A. IVP
B. Continuous IV
C. IV bolus
D. Controller
58. A drop factor of 10 gtt/mL in a tubing set means 10
59. Suppose an order includes D5
W. This notation means there are ___g of dextrose per 1000 mL
of solution.
60. Drugs are administered intravenously for which purpose(s)?
61. The following are commonly added to intravenous solutions.
62. _____ is a kind of electronic infusion pump.
63. Administration of medications to children requires special attention because of:
64. All the following must be considered when giving drugs to children EXCEPT:
65. Pharmacy technicians can calculate the BSA by using a chart called:
Part C: Select the correct answer for the following questions.
66. How many mL do you read in the syringe below?
71. What is a narrow syringe calibrated in tenths and hundredths of a milliliter on one
scale and
in sixteenths of a minim on the other scale?
72. To what are medication errors most often attributed?
73. Pharmacy technicians can reduce medication errors by:
74. All the following are components of a prescription label EXCEPT:
75. To reduce medication errors, a pharmacy technician must always remember the
seven
HRM 531 FINAL EXAM
ANSWERS $24 Only

1) ____________ are internal states that focus on particular aspects of or objects
in the environment.
2) Inventory shrinkages and accidents pertain to which component of direct
costs associated with mismanaged organizational stress?
3) Which of the following is an example of an indirect cost associated with
mismanaged organizational stress?
4) Distrust, disrespect, and animosity pertain to which component of indirect
costs associated with mismanaged organizational stress?
5) Title VII is most relevant to the employment context because it __________on
the basis of race, color, religion, sex, or national origin in all aspects of
employment.
A. prevents layoffs
B. eliminates nepotism
C. prohibits discrimination
D. encourages advancement
6) Which of the following is NOT a major sub theory of discrimination within
the disparate treatment theory?
A. Cases that rely on direct evidence
B. Cases that rely on circumstantial evidence
C. Mixed-motive cases
D. Cases that rely on a jury trial
7) Thousands of equal-pay suits have been filed, predominantly by ___________
since the Equal Pay Act of 1963 was passed.
A. Americans with disabilities
B. the elderly
C. African Americans
D. women
8) The Thirteenth Amendment
A. prohibits each government in the U.S. to stop a citizen from voting based on race
B. prohibits the denial, termination, or suspension of government contracts
C. prohibits slavery and involuntary servitude
D. guarantees equal protection of the law for all citizens
9) ____________ refers to actions taken to overcome the effects of past or present
practices, policies, or other barriers to equal employment opportunity.
A. ROWE
B. Voluntarism
C. Affirmative action
D. Managing diversity
10) Which of the following would you associate with managing diversity?
A. Quantitative
B. Internally focused
C. Government initiated
D. Assumes integration
11) _____________ is an inevitable byproduct of teamwork, especially when teams
are drawn from a diverse base of employees.
12) When companies discover they can communicate better with their customers
through employees who are similar to their customers, those companies then realize
they have increased their _____ diversity.
13) Which of the following observations is correct?
A. Diversity is quantitative and affirmative action is qualitative.
B. Diversity is proactive and affirmative action is reactive.
C. Diversity is problem focused and affirmative action is opportunity focused.
D. Diversity is government initiated and affirmative action is voluntary
14) How firms compete with each other and how they attain and sustain
competitive advantage is the essence of
A. operations management
B. financial management
C. data management
D. strategic management
15) Which of the following defines the crucial elements for a strategys
success?
A. Strategy analysis
B. Strategy formulation
C. Strategy facilitation
D. Strategy implementation
16) How does a mission statement differ from a vision statement?
A. The mission statement includes the result of an analysis of the future availability
of labor and also future labor requirements.
B. The mission statement is an effort to anticipate future business and
environmental demands on an organization, and to provide qualified people to
fulfill that business and satisfy those demands.
C. The mission statement typically includes a fairly substantial effort to establish
some direct line-of-sight between individual competency requirements and the
broader goals of an organization.
D. The mission statement includes the purpose of the company as well as the
basis of competition and competitive advantage
17) To be the worlds best quick-service restaurant is an example of a(n)
A. vision statement
B. code of ethics
C. organizational charter
D. mission statement
18) Which of the following statements about a company using a
passive nondiscrimination posture is true?
19) The step following recruitment is _____, which is basically a rapid, rough
selection process.
A. workforce planning
B. orientation
C. performance management
D. initial screening
20) Typically, the first step in an employees introduction to company
policies, practices, and benefits is a(n) _____ program.
A. initial screening
B. orientation
C. team building
D. intensive training program
21) Instances where employees are selected specifically to fill certain
positions are called _____ selection or placement programs.
A. focused
B. one-shot
C. rapid
D. one-chance
22) Organizations in the high-growth stage focus on
A. the maintenance of market share
B. extreme cost control
C. cost reductions through economies of scale
D. refining and extending product lines
23) Organizations that are in the embryonic stage are characterized by all of the
following EXCEPT
24) During the _____ stage, it is important to select the kinds of managers who can
develop stable management systems to preserve the gains achieved during the
embryonic stage.
25) Individuals who fit best into mature organizations have a(n) _____ style of
management.
A. laissez-faire
B. autocratic
C. bureaucratic
D. democratic
26) Increasing an individuals employability outside the company
simultaneously increases his or her job security and desire to stay with the
current employer is known as the
A. massed practice
B. training paradox
C. distributed practice
D. Pygmalion effect
27) At the structural level, which of the following training issues can be
examined?
A. Who gets training?
B. How can the outcomes of training efforts be evaluated?
C. How can the delivery of training programs be structured?
D. What types of training seem to yield positive outcomes for organizations?
28) __________ analysis is helpful in determining the special needs of a
particular group, such as older workers, women, or managers at different
levels.
A. Individual
B. Organization
C. Demographic
D. Operations
29) According to the text, the Intel example illustrates how major layoffs can
be avoided through a strong in-house
A. sexual harassment policy
B. wage and benefits package
C. worker redeployment policy
D. performance management program
30) An exercise that is typically done once a year to identify and discuss job-relevant
strengths and weaknesses of individuals or work teams is
A. performance standard
B. performance facilitation
C. performance encouragement
D. performance appraisal
31) Providing adequate resources to get a job done right and on time, and
paying careful attention to selecting employees are parts of
A. performance facilitation
B. performance encouragement
C. performance appraisal
D. performance monitoring
32) When there is a clear link between organizational goals and performance
standards for a particular job, the appraisal system is said to exhibit
A. sensitivity
B. reliability
C. relevance
D. acceptability
33) This can be thought of as a kind of compass that indicates a persons
actual direction as well as a persons desired direction.
A. Management by objectives
B. Central tendency
C. Performance management
D. Forced distribution
34) In managing careers, organizations should
A. focus mainly on the needs of minorities and women
B. focus primarily on employee needs and aspirations
C. allow employees to structure work assignments
D. plan for shorter employment relationships
35) The ultimate goal in the new world of career management is
A. rising aspirations
B. time off when you need it
C. psychological success
D. executive ranking
36) The process of moving inside or becoming more involved in a particular
organization is
A. organizational learning
B. integration
C. socialization
D. organizational entry
37) Traditionally, career success has been defined as
A. making higher than expected income
B. a satisfying job
C. a good relationship with the boss
D. occupational advancement
38) At a broad level, a (n) _____ includes anything an employee values and
desires that an employer is able and willing to offer in exchange for employee
contributions.
A. merit-pay method
B. employee stock ownership plan
C. organizational reward system
D. competency-based pay system
39) If pay systems are to accomplish the objectives set for them, ultimately
they must be perceived as
A. relevant and competitive
B. immediate and fair
C. adequate and equitable
D. generous and timely
40) You should plan to exit an organization only when
A. it is convenient for the organization
B. you have landed another job
C. you think you are not being paid what you are worth
D. you have a disagreement with your supervisor
41) Financial rewards include direct payments plus indirect payments in the
form of
A. employee benefits
B. spot awards
C. individual equity
D. corporate compensation
42) The benefits of this act are based on a percentage of average weekly
earnings and are available for up to 26 weeks.
A. Federal Unemployment Tax Act
B. Balanced Budget Act
C. Administrative Procedure Act
D. Social Security Act
43) Plans are known as _____ when the employees share in the cost of the
premiums.
A. peer participating
B. distributive
C. share-based
D. contributory
44) The doctrine of _____ holds that an individual must pay taxes on benefits
with monetary value when he or she receives them.
45) Which law offers full coverage for retirees, dependent survivors, and
disabled persons insured by 40 quarters of payroll taxes on their past
earnings or earnings of heads of households?
46) _____ business plans outline the basic directions in which an organization
wishes to move in the next 3 to 5 years.
47) _____ justice refers to the quality of interpersonal treatment that
employees receive in their everyday work.
48) Procedural justice affects citizenship behaviors by influencing employees
perceptions of _____, the extent to which the organization values employees
general contributions and cares for their well-being.
49) A _____ is a body of employee and management representatives who meet
50) Distributive justice focuses on the fairness of the _____ of decisions.
51) A (n) _____ is a neutral facilitator between employees and managers who
assists them in resolving workplace disputes.
LDR 531 FINAL EXAM Set 3

ANSWERS $22 Only

1) Over the past 2 decades, business schools have added required courses on people
skills to many of their curricula. Why have they done this?
A. There is an increased emphasis in controlling employee behavior in the workplace.
B. Managers need to understand human behavior if they are to be effective.
C. These skills enable managers to effectively lead human resources departments.
D. Managers no longer need technical skills in subjects such as economics and
accounting to succeed.
E. A manager with good people skills can help create a pleasant workplace.
2) Which of the following is best defined as a consciously coordinated social unit,
composed of two or more people, which functions on a relatively continuous basis
to achieve a common goal or set of goals?
A. Unit
B. Team
C. Community
D. Party
E. Organization
3) What do the fundamental consistencies underlying the behavior of all
individuals enable researchers to do?
A. Systematize human behavior.
B. Observe human behavior.
C. Research human behavior.
D. Predict human behavior.
E. Detect human behavior.
4) Which of the following is a generic term that covers a broad range of feelings
people experience?
A. Emotions
B. Affect
C. Moods
D. Emotional labor
E. Cognition
5) Zach is devout and very active in his church. He is also a very dedicated
employee. His manager offers him a promotion, but the new role will require him
to work Sundays. Zach would like the promotion, but realizes that it would force
him to miss some church activities. It is likely that Zach is experiencing which of
the following:
A. Role expectation
B. Psychological conflict
C. Role perception
D. Cognitive reactance
E. Role conflict
6) Using covert influence to overcome resistance to change is called __________.
A. cooptation
B. negotiation
C. education
D. manipulation
E. coercion
7) If individuals resisting change are included in making change decisions in an
attempt to gain their support, this approach is called __________.
15
A. exploitation
B. cooptation
C. manipulation
D. education
E. coercion
8) Leaders achieve goals, and power is __________.
A. usually used by poor leaders
B. a strong influence on leaders goals
C. a goal in and of itself
D. defined by leaders hopes and aspirations
E. a means of achieving goals
9) Robert Katz identified three essential skills that managers need to have in order to
reach their goals. What are these skills?
A) technical, decisional and interpersonal
B) technical, human, and conceptual
C) interpersonal, informational and decisional
D) conceptual, communication and networking
E) human, informational and communication
10) __________ is a field of study that investigates the effect that individuals, groups,
and structures have on behavior within organizations for the purpose of applying such
knowledge toward improving an organizations effectiveness.

A. Corporate tactics
B. Human resources management
C. Organizational behavior
D. Corporate strategy

11) What do the fundamental consistencies underlying the behavior of all individuals
enable researchers to do?

A. Observe human behavior.
B. Research human behavior.
C. Predict human behavior.
D. Detect human behavior.

12) Which of the following is a generic term that covers a broad range of feelings that
people experience?

A. Affect
B. Emotions
C. Moods
D. Emotional labor

13) What term is used for intense feelings that are directed at someone or something?
A. Affect
B. Cognition
C. Thoughts
D. Emotions

14) If personality characteristics were completely dictated by __________, they would
be fixed at birth and no amount of experience could alter them.
A. job satisfaction
B. heredity
C. environment
D. situational factors

15) Which of the following are classifications on the Myers-Briggs Type Indicator?
A. Extroverted, intuitive, judging, independent
B. Extroverted, sensing, judging, thinking
C. Extroverted, judging, independent, feeling
D. Sensing, perceiving, dependent, feeling

16) Maria is dissatisfied with the way that her manager treats her. She has quit her job
and found a new position with another firm. How has she expressed her dissatisfaction?
A. Exit
B. Voice
C. Neglect
D. Loyalty

17) You quietly continue to do your work when you know things will not improve. This is
what type of response to dissatisfaction?
A. Exit
B. Voice
C. Loyalty
D. Neglect

18) A group
A. generates positive synergy through coordinated effort
B. generates greater outputs with no increase in inputs
C. is two or more individuals interacting and interdependent
D. engages in collective work that requires joint effort

19) __________ results in a level of performance that is greater than the sum of the
individual input.
A. Synergy
B. Enthusiasm
C. Energy
D. Initiative

20) What happens in the second stage of Tuckmans five stage model of group
development?
A. Close relationships are developed.
B. The group demonstrates cohesiveness.
C. Intragroup conflict often occurs.
D. Groups disband.

21) Zach is devout and very active in his church. He is also a very dedicated employee.
His manager offers him a promotion, but the new role will require him to work Sundays.
Zach would like the promotion, but realizes that it would force him to miss some church
activities. It is likely that Zach is experiencing which of the following:
A. Role conflict
B. Role expectation
C. Role perception
D. Role identity

22) Which role focuses on bringing about order and consistency by drawing up formal
plans?
A. Leadership
B. Management
C. Task structure
D. Initiating structure

23) Which statement regarding leadership is true?
A. Formal rights enable managers to lead effectively.
B. All managers are leaders.
C. All leaders are hierarchically superior to followers.
D. Nonsanctioned leadership is as important as or more important than formal
influence.

24) What are three situational criteria identified in the Fiedler model?
A. Charisma, influence, and leader-member relations
B. Leader-member relations, task structure, and position power
C. Task structure, leadership ability, and group conflict
D. Emotional intelligence, group orientation, and employee status

25) The reconceptualization of the contingency model by Garcia and Fiedler is called
__________ theory.
A. situational
B. cognitive resource
C. evaluative
D. cognitive dissonance

26) Which path-goal leadership style leads to greater satisfaction when tasks are
ambiguous or stressful?
A. Directive
B. Supportive
C. Participative
D. Reactive
27) According the Path-Goal Theory, what leader is friendly and shows concern for the
needs of followers?
a. the achievement-oriented leader
b. the directive leader
c. the laissez-faire leader
d. the participative leader
e. the supportive leader

28) Phrases such as more cultural diversity, many new entrants with inadequate
skills,
and increase in aging workers are all examples of what force for change?
a. technology
b. world politics
c. nature of the work force
d. social trends
e. competition

29) What is a goal of planned change?
a. to change the forces of change
b. to alter the agents of change
c. to change employees responsibilities
d. to improve the ability to adapt to the environment
e. to alter the employees environment

30) Which of the following is a characteristic of organizational control?
a. Formality orientation
b. Decision orientation
c. Team orientation
d. Managerial orientation

31) What term describes the key characteristic of organizational control that addresses
the degree to which employees are expected to exhibit precision?
a. accuracy orientation
b. accountability
c. attention to detail
d. stability
e. reactivity
32) Power is
a. a means for leaders to achieve goals
b. defined by leaders hopes and aspirations
c. a goal in and of itself
d. not an influence on leaders goals

33) The most important aspect of power is probably that it _____.
a. is needed to get things done in an organization
b. is a function of dependency
c. tends to corrupt people
d. is counterproductive
e. involves control
MGT 216 FINAL EXAM Set 2

ANSWERS $15 Only

1) Which of the following describes normative ethics?
A) It consists of studying and describe the morality of a people, culture, or society
B) It compares and contrast different ethical systems, codes, practices, and beliefs
C) It analyzees hiddn presuppositions and brings them to light for critical scrutiny
D) It attempts to justify the basic principle of morality
2) Which of the following is the art of solving difficult problems, cases, or
deliberations through the careful application of moral prinicples?
A) Casuistry
B) Normative ethics
C) Metaethics
D) Special effects
3) Ethical behavior is defined as
A) Principles, norms, and standards agreed upon by society
B) Rules of behavior set by the fedral govt
C) Metaethics
D) A set of moral prinicples or values that guide an individual
4) Which of the following are the correct steps and order of steps in the ethical
decision-making process?
A) moral judgment, moral awareness, and moral behavior
B) moral awareness, moral judgment, and moral behavior
C) moral awareness, moral cognition, moral behavior
D) moral awareness, moral behavior, and moral cognition
5) Students in which area of study may need more ethics training because research
has found that they rank lower in moral reasoning than other students?
A) philosophy
B) business
C) political science
D) medicine
6) Business ethics is typically which of the following
A) special effects
B) casuistry
C) normative ethics
D) metaethics
7) Weak organizational cultures are
A) desirable if an organization has many subcultures
B) desirable if an organization wants behavioral consistency.
C) desirable if an organization wants diversity of thought and action.
D) undesirable because they lead to weak organizations.
8) According to th Executive Ethical Leadership Reputation Matrix, which type of leader
is an executive characterized as a strong moral person and a strong moral manager?
A) unethical leader
B) Ethically neutral leader
C) Ethical leader
D) Hypocritical leader.
9) All of the following statements are true except what
A) any attempt to change an organizations ethics must consider the entire culture
system.
B) an effective culture change may take at most 1 to 2 years
C) a culture system includes both formal and imformal systems.
D) new rules and values must be reinforced via training programs and reward systems.
10) Whistle-blowing is often though to indicate the falsity of which common myth?
A) the myth of Stakeholder Interest
B) The myth of moral business
C) the myth of amooral business
D) the myth of shareholder Interest.
11) Which of the following conditions is necessary for whistle-blowing to be morally
obilgator?
A) the firm will do serious and considerable harm to employees or to the public.
B) the employee has reported the serious threat to his or her immediate supervisor.
C) the employee has exhausted the intrnal procedures and possibilities within the firms,
maybe even to the board of directors.
D) the whistle-blower has documented evidence that would convince a reasonable,
impartical observer that ones view of the situation is correct, and that the
companys product poses a serious danger to the public.
12)Which of the following conditions is necessary for whistle-blowing to be morally
permissible, but not morally obligatory?
A) the employee has good reason to believe that by going public, the necessary
changes will
be brought about.
B) the whistle-blower has reason to believe that he or she will be seen as failing to be
loyal
to the company.
C) the employee has reported the serious threat to his or her immediate supervisor.
D) the whistle-blower has documented evidence that would convince a reasonable,
impartial observer that ones view of the situation is correct, and that the companys
product poses a serious danger to the public.
13) Sound judgment involves all execpt which of the following?
A) morality
B) careful deliberation
C) a well-developed moral sense
D) experience
14) Which of the following is a good definition of the virtues from the perspective of
a virtue ethicist?
A) the viture are characterized by emphasizing the ends over the means.
B) the virtues are skills of excellence in the art of living in society with others.
C) the virtues are characterized by the habit of going along with the majority.
D) the virtues are skills of discerning the rules and obeying them.
15) Which of the following is the highest virtue, for Aristotle?
A) justice
B) generosity
C) wisdom
D) courage
16) Which of the following is not true about the moral responsibilities of management?
A) management is responsible to mazimize profits
B) management is responsible to the shareholders
C) Management is responsible to the workers.
17) Which of the following is the general obligation derived from the system of
free enterprise that covers the wide range of issues from just compensation to truth
in advertising to providing the equality of goods or services that one represents
oneself as providing?
A) the obligation to do no harm
B) the obligation to live up to the contracts into which one enters freely
C) the obligation to be fair in the transactions in which it engages
D) the obligation not to undermine the freedom and values of the system.
18) Which of the following is one of the moral responsibilities of management?
A) management is responsible to the board
B) management is responsible to the sharholders
C) management is responsible to mazimize profits
D) management is responsible to the workers.
19) despite a terrible disaster, which company demonstrated its ability to act swiftly
and compassionally for multiple shareholder groups affected by the chemical leak?
A) Merck
B) Manville
C) Union carbid
D) exxon
20) In an example of lack of product safety, which company waited 9 years to alert its
customers that its birth control product causes severe pelvic inflammatory disease
that may lead to miscarriages or severe childbirth defects?
A) Johnson & Johnson
B) Adelphia
C) A.H. Robbins
D) Merck
21) In a 2002 poll, which profession ranked last on the who do you trust scale?
A) Lawyers
B) Accountants
C) Chief executive officers
D) Polilicians
22) According to the annual Corruption Perception Index (CPI), which country would
be the least corrupt?
A) United States
B) Denmark
C) Bangladesh
D) Haiti
23) When dealing with an individual from a different culture, which of the following
is true?
A) negotiators generally adapt their negotiation behavior to that of the negotiatiin
partner.
B) negotiators generally do not adapt their negotiation behavior to that of the
negotiation
partner.
C) Canadian and Japanese negotiators are the least flexible to their negotiation
partners
behavior.
D) American negotiators are the most flexible to their negotiation partners behavior.
24) Which of the following is legal according to the Foreign Corrupt Practices Act
(FCPA) passed in 1977?
A) payments to high-ranking govt officials.
B) kickbacks to win overseas contracts
C) bribes to political parties
D) grease payments to lower-level govt officials
ISCOM 305 FINAL EXAM

ANSWERS $22 Only

1. Operations management is concerned only with the day-to-day operations of the
firms
productive system.

2. An advantage of mass production is its ability to adapt quickly to changes in
demand.
3. Japanese firms used the concept of ___________ to convert from mass production
to lean
production.
a. division of labor
b. scientific management
c. just-in-time
d. interchangeable parts
4. All of the following are responsibilities of operations managers except
a. acquiring financial resources
b. managing inventories
c. planning production
d. scheduling production
5. Before Six Sigma quality levels in the United States were generally measured in
terms of
percentages or parts per hundred. True / False
6. The probability that a product will operate properly within an expected time frame is
known as
performance. True / False
7. Achieving quality of conformance depends on all of the following factors except
a. the design of the production process
b. the performance level of equipment, machinery and materials
c. the training and supervision of employees
d. the price charged for the product
8. Length, temperature, and weight are examples of attribute characteristics. True /
False
9. It is possible for samples to have very narrow ranges while at the same time having
a sample
average beyond the control limits. True / False
10. A process is generally considered to be in control when
a. there are no sample points outside the control limits
b. most points are near the center line, without many being close to the control limits
c. sample points are randomly distributed equally above and below the center line
d. all of the above are true
11. A control chart that reflects the amount of dispersion, or spread, present in each
sample is
known as a(n)
a. p-chart
b. c-chart
c. R-chart
12. A project team is typically cross-functional in its make up. True / False
13. A Gantt chart provides a visual display of the project schedule, including scheduled
start times,
finish times, and slack times. True / False

14. The critical path for a project is the shortest path through the projects network.
True / False

15. Increased uncertainty and variability in a supply chain typically results in
a. faster deliveries
b. more accurate order fulfillment
c. larger inventories
d. lower costs
16. One of a companys main objectives in managing its supply chain is to make the
flow of
incoming materials and parts independent of production and downstream distribution.
True /
False
17. Qualitative forecasting methods rely on judgment, opinion, past experiences, or
best guesses to make forecasts. True / False
18. Continuous replenishment systems rely heavily on accurate long-term forecasts.
True / False
19. Quantitative forecasting methods are the most common type of forecasting method
for long-term strategic planning. True / False

20. A forecast is never completely accurate. True / False
21. A seasonal pattern is
a. an up-and-down repetitive movement in demand occurring periodically
b. an up-and-down repetitive movement in demand occurring over a long time span
c. a movement in demand that is not predicable
d. a gradual, long-term up-or-down movement of demand
22. The sum of the weights in a weighted moving average forecast
a. must equal the number of periods being averaged
b. must equal 1.00
c. must be less than 1.00
d. must be greater than 1.00
23. Large amounts of inventory may be purchased to take advantage of price
discounts, but not as a
hedge against future price increases. True / False
24. The three basic costs associated with inventory are holding costs, ordering costs,
and shortage costs. True / False
25. As order size increases both carrying costs and ordering costs increase. True /
False
26. In the ABC inventory system Class A items would require less monitoring and
control than Class
C items. True / False
27. The function of the economic order quantity (EOQ) model is to determine the
optimal order size that minimizes total inventory costs. True / False
28. A stockout occurs when supply exceeds demand during the lead time. True /
False
29. The three types of inventory costs identified by our authors include all of the
following except,
30. The service level is the probability that the amount of inventory on hand during the
lead time is
sufficient to meet expected demand. True / False
31. A restaurant currently uses 62,500 boxes of napkins each year at a constant daily
rate. If the
cost to order napkins is $200.00 per order and the annual carrying cost for one box of
napkins is
$1.00, then the optimal order quantity (EOQ) for napkins would be
32. A company that produces specialized video equipment had cost of goods sold last
year of
$127,000,000. The average value of inventory for raw materials, work-in-process, and
finished
goods are shown in the table below:
Raw Materials $6,189,000
Work-In-Process $2,541,000
Finished Goods $3,710,000
If the company operates 50 weeks per year then the weeks of supply in inventory would
be
a. 4.898
b. 0.098
c. 10.209
d. 35.75
33. A forecasting model has produced the following forecasts:

Period Demand Forecast Error
January 120 110
February 110 115
March 115 120
April 125 115
May 130 125
The mean absolute deviation (MAD) for the end of May is
a. 7.0
b. 7.5
c. 10.0
d. 3.0
34. The weighted moving average forecast for the fifth period with weights of 0.15 for
period 1,
0.20 for period 2, 0.25 for period 3, and 0.40 for period 4, using the demand data shown
below
would be
Period Demand
1 3500
2 3800
3 3500
4 4000
a. 3760
b. 3700
c. 3650
d. 3325
35. Given the following demand data for the past five months, the four period moving
average
forecast for June would be
Period Demand
January 120
February 90
March 100
April 75
May 110
a. 96.25
b. 99.00
c. 110.00
d. 93.75
ISCOM 471 FINAL EXAM
ANSWERS $5.99 Only

1 A resource that limits the capacity for maximum output of a process is a

a) Block
b) Starve
c) Bottleneck
d) Process improvement
e) None of the above

2 The aggregate operations plan is concerned with setting production rates by product
group or other broad categories for the intermediate team.
a. True
b. False

3 Quality function deployment is a tool used to identify
a. customer requirements
b. process improvements
c. quality
d. cost factors

4 _____________ is the philosophy of continually seeking improvements in a process
through the use of team efforts.
a. Quality control
b. Performance quality
c. Continuous improvement
d. Conformance quality

5 ___________ is a type of forecast in which data related to past demand are used to
predict the future.
a. Linear regression forecasting
b. Focus forecasting
c. Time series analysis
d. Past causal relationships

6 Which of the following factors account for the interest in organizational management?
a. Current problems/opportunities
b. Inventory costs
c. Customer satisfaction
d. All of the above

7 Fundamental MRP II questions include all of the following EXCEPT
a. What does it take to make it?
b. What do we have?
c. What do we have to get?
d. Who needs it?

8 What is one reason for failure in project scheduling?
a. Lack of management support
b. Inadequate training
c. Incomplete project
d. Lack of diversity in team members

9 A bottleneck is defined as any resource whose capacity limits throughput in the
production line.
a. True
b. False

10 A simple inventory system includes:
a. Optional replenishment, Two-bin, One-bin
b. MRP, Two-bin, One-bin
c. Optional replenishment, order point, One-bin
d. Order point, Two-bin, One-bin

11 The bill of material contains all of the following EXCEPT
a) Complete product description
b) Listing of materials
c) Listing of components
d) Sequence in which the product is created
e) Transaction files

12 What is the inherent value of a product in the marketplace?
a. Conformance quality
b. Design quality
c. Six Sigma
d. Cost

13 Operations management is defined as the design, operation, and improvement of the
systems that create and deliver the firms primary products and services.
a. True
b. False

14 If there is no bottleneck, then excess capacity exists and the system should be
changed to create a bottleneck.
a. True
b. False

15 Disadvantages of capacity simulation include all of the following EXCEPT
a. A significant amount of computer time may be needed to run complex models.
b. A great deal of time and effort typically is spent to develop a model for the simulation.
c. Simulation can be used as a game for training experience.
d. None of the above.

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