STRAYER BUS475 Midterm Exam (ANSWER 100%) 50/50 - 88985

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Q1. To decrease the nation's money supply, the Fed can increase reserve requirement. decrease reserve requirements. decrease the discount rate. buy government securities in the open market. Q2. In the long-run framework, budget surpluses should be run whenever output dips below potential output. should never be run since they crowd out investment in the short run. are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment. should be run on a permanent basis since they boost saving and investment and stimulate economic growth. Q3. Which of the following will decrease the nominal deficit? An increase in taxes An increase in government expenditures An increase in interest rates An increase in the debt Q4. If a country's trade deficit increases, then its consumption must be falling relative to its production. its consumption must be rising relative to its production. it must be buying more assets from foreigners. it must be selling fewer assets to foreigners. Q5. Which of the following statements best describes the modern view of marketing? Marketing is only necessary for profit-oriented firms. Marketing consists mainly of advertising and personal selling. Marketing anticipates customer needs. Marketing begins as soon as products are produced. Q6. Ethnic markets are becoming more important to marketers because the buying power of ethnic submarkets is decreasing. the median age of Asian, African, and Hispanic Americans is much higher than that of White Americans. the number of ethnic consumers is growing at a much faster rate than the overall society they make a clear segment with similar backgrounds and common language, religion, and culture. Q7. Segmenting, in contrast to combining, tends to focus more on customer similarities than on differences. tries to identify homogeneous submarkets and develop different marketing mixes for each submarket. usually means settling for a smaller sales potential. relies more on promotion appeals and minor product differences to create general customer appeal among several submarkets. Q8. Cargill, Inc. is finally earning a profit on the unique product it introduced 6 months ago. Cargill's advertising is both informative and persuasive. Much money is being spent on place development. There is little price competition, although several competitors have come out with reasonable imitations. Total industry sales and profits are both rising. In which stage of the product life cycle is Cargill operating? Market growth Market introduction Sales decline Market maturity Q9. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product, the Gutenberg NP201, with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. In regard to freight charges for its equipment, NPE's invoice reads, "Seller pays the cost of loading equipment onto a common carrier. At the point of loading, title to such products passes to the buyer, who assumes responsibility for damage in transit, except as covered by the transportation agency." ? National Printing Equipment's new Gutenberg NP201 should probably use ________________. price fixing skimming pricing introductory pricing penetration pricing Q10. The main reason that vertical marketing systems are becoming more common is that firms realize that working independently has advantages for channel members. firms increasingly understand that competition among channel members is profitable. it is easy for multiple firms to coordinate a single marketing mix for a common target market. firms recognize that coordination among channel members can increase sales for each channel member Q11. __________ is the intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message. Integrated marketing communications Online marketing Digital marketing Product positioning Q12. Which of the following statements about ethical behavior in business is true? The legal environment sets the highest standards of ethical behavior. The legal environment sets the maximum standards of ethical behavior. The legal environment sets the minimum standards of ethical behavior. The legal environment sets the normative standards of ethical behavior. Q13. Which of the following financial instruments entails the most risk and potentially the highest returns for investors? Debt with a maturity of less than 1 year Bonds Common stock Preferred stock Q14. The Oviedo Thespians are planning to present performances of their Florida Revue on two consecutive nights in January. It will cost them $5,000 per night for theater rental, event insurance, and professional musicians. The theater will also take 10% of gross ticket sales. How many tickets must they sell at $10.00 per ticket to break even? 1000 tickets 1,112 tickets 1,223 tickets There is not enough information. Q15. What is the present value of $12,500 to be received 10 years from today? Assume a discount rate of 8% compounded annually and round to the nearest $10. $5,790 $11,574 $9,210 $17,010 Q16. P. Noel's Inc.'s current ratio is 2. Current liabilities are $500,000. P. Noel's current assets equal __________ and net working capital is __________. $500,000 and $1,000,000 $500,000 and $250,000 $1,000,000 and $500,000 $500,000 and $500,000 Q17. Woodstock Inc. expects to own a building for 5 years, and then sell it for $1,500,000 net of taxes, sales commissions, and other selling costs. Woodstock's cost of capital is 11%. How much will the sale of the building contribute to the NPV of the project? $890,177 $1,351,351 $1,500,000 $2,527,587 Q18. Metals Corp. has $2,575,000 of debt, $550,000 of preferred stock, and $18,125,000 of common equity. Metals Corp.'s after-tax cost of debt is 5.25%, preferred stock has a cost of 6.35%, and newly issued common stock has a cost of 14.05%. What is Metals Corp.'s weighted average cost of capital? 12.78% 10.84% 8.32% 6.56% Q19. Which of the following is the most important factor that affects a firm's financing mix? The amount of EPS The amount of operating income The number of shares that are outstanding The predictability of cash flows Q20. One reason for international investment is that the economies of many countries are growing faster than that of the U.S. price-earnings (P/E) ratios are higher in foreign countries doing business in foreign countries is simpler than in the U.S. raw materials are typically cheaper in other countries than in the U.S. Q21. H&R Block wants to analyze its clients' tax returns over the past 10 years for each of the client's tax filings. The type of data generated will be ______________. time series data cross-sectional data observation data meta data Q22. Suppose Stock A has had a mean price of $6.58 per share with a standard deviation of $1.88, while Stock B has had a mean price of $10.57 per share with a standard deviation of $3.02. Which stock shows a higher coefficient of variation or volatility? Stock A Stock B Both stocks have the same coefficient of variation. The coefficients are incomparable. Q23. A random sample of 81 team leaders and supervisors from Fortune 500 companies revealed that on average a person spent 6.5 years on the job before being promoted. The standard deviation of the sample was 1.7 years. Assuming that the population standard deviation is unknown, the 99% confidence interval within which the population mean lies is approximately between ___________ and _________years. 6 and 7 5.5 and 6.5 5.5 and 7.5 5.5 and 6.5 Q24. The appropriate alternative hypothesis for a two-tail test to determine if mean body weight of all the men who have joined a health club is the same as 185 pounds would be Ho: ? = 185 lbs. Ho: ? > 185 lbs. Ho: ? ? 185 lbs. Ho: ? ? 185 lbs. Q25. A survey of 134 cell phone users yielded the data found in the table below. The table compares gender and type of phone. iPhone Non-iPhone Total Male 57 23 80 Female 36 18 54 Total 93 41 134 If a customer is randomly selected based on this survey data, what is the probability that the customer is a female with an iPhone? (Round your answer to 3 decimal places). 0.481 0.333 0.387 0.269 Q26. A correlation value of r = 0.5 between the x-variable and y-variable means there is no relationship between x and y. there is a strong positive linear relationship between x and y. there is a moderate positive linear relationship between x and y. there is no linear relationship between x and y. Q27. When predicting grade point average from the number of hours spent studying per week, the equation for the best fit line was found to beyˆ = 0.0855x + 0.944. What is the predicted grade point average of a student that studies 26 hours per week? 24.63 3.17 2.99 25 Q28. A distribution center for a chain of electronics supply stores fills and ships orders to retail outlets. A random sample of orders is selected as they are received and the dollar amount of the order (in thousands of dollars) is recorded, and then the time (in hours) required to fill the order and have it ready for shipping is determined. A scatterplot showing the times as the response variable and the dollar amounts (in thousands of dollars) as the predictor shows a linear trend. The least squares regression line is determined to be: yˆ= 0.76 +1.8x. A plot of the residuals versus the dollar amounts showed no pattern, and the following values were reported: Correlation r + 0.90; R2 = 0.81; standard deviation of the residuals is 0.48. What percentage of the variation in the times required to prepare an order for shipping is accounted for by the fitted line? 76% 48% 81% 90% Q29. Which of the four basic financial statements adds net income and subtracts dividends to arrive at its key data element at the end of each period? Statement of Cash Flows Balance Statement Retained Earnings Statement Income Statement Q30. What principle dictates that efforts (expenses) be recorded with results (revenues)? Expense recognition principle Cost principle Periodicity principle Revenue recognition principle Q31. When an accountant makes an adjusting entry for accrued expenses, which statement best reflects what the accounts look like before the adjustment? Assets overstated; expenses understated Liabilities overstated; revenues understated Assets understated; revenues understated Expenses understated; liabilities understated Q32. Which account will have a zero balance after a company has journalized and posted closing entries? Service Revenue Supplies Prepaid Insurance Accumulated Depreciation Q33. If XYZ Co. had 100 units of beginning inventory valued at $15 per unit in January, purchased an additional 100 units of inventory in February at $16 per unit, and additional 100 units of inventory in May at $19 per unit, what would the unit cost of ending inventory be under each of the three inventory methods (assuming that XYZ only sold 79 units during this time frame)? $19 under FIFO, $15 under LIFO, $17 under average cost $15 under FIFO, $19 under LIFO, $17 under average cost $19 under FIFO, $15 under LIFO, $16.6 under average cost $15 under FIFO, $19 under LIFO, $16.6 under average cost Q34. Mitch Company's ending inventory is understated by $4,000. The effects of this error on the current year's cost of goods sold and net income, respectively, are understated and overstated. overstated and understated. overstated and overstated. understated and understated. Q35. Internal control is used in a business to enhance the accuracy and reliability of its accounting records and to safeguard its assets. create a system of audit review. analyze financial statements. protect investments by the public. Q36. Under the percentage of receivables method, the allowance for a doubtful accounts balance will occasionally have a debit balance due to write-offs that occur during the year, which exceed the previous provisions for bad debts. In such cases, what must a company do to this account? Allow the debit balance to carry over to future periods. Make an adjusting entry by subtracting the debit balance from the required balance. Make an adjusting entry by adding the debit balance to the required balance. Create a second allowance for doubtful accounts balance with a credit balance. Q37. Penn Corp. acquired a truck to haul widgets between its manufacturing facility and its sales offices. Penn acquired the truck for $55,000. Penn sold the truck years later for $15,000. Before the year of the sale, Penn had depreciated the asset by $32,000. Penn depreciated the truck by another $2,000 during the year it was sold. Does Penn record gain or loss on the sale and how much? Loss of $17,000 Loss of $19,000 Gain of $8,000 Gain of $6,000 Q38. In what situations are notes payable used in lieu of accounts payable? To give the lender formal proof of the obligation, for collection of debt purposes, and to require the borrower to pay interest To provide short-term financing, for collection of debt purposes, and to pay off the debt quicker To create better credit, incur liability over a shorter time frame, and acquire additional financing for different lines of business Because other financing is not available, to facilitate business relationship with other companies, and to improve goodwill Q39. In the stockholders equity section of the balance sheet, the cost of treasure stock is deducted from the following: Total paid-in capital and retained earnings Retained earnings Total stockholders' equity Common stock in paid-in capital Q40. To arrive at net cash provided by operating activities, the statement of cash flows prepared by the indirect method starts with net income and then adds or deducts various items. In making this calculation, the following items are added to net income under the indirect method: Depreciation expense, gain on the sale of plant assets, and increase in current liability account Patent amortization expense, increase in current asset account, and decease in current asset account Depletion expense, loss on the sale of plant assets, and patent amortization expense Gain on the sale of plant asset, increate in current asset account, and decrease in current liability account Q41. In horizontal analysis, each item is expressed as a percentage of the following: Stockholders' equity amount Total assets amount Base year amount Net income amount Q42. The following is an example of an unethical action committed by ABC, Inc.'s accountant, Fred Anderson. Anderson's supervisor asks him to inflate income for the current period to make the company appear more profitable. Anderson's recording of amortization is audited by an independent auditor. Anderson records income using the cash basis of accounting, contrary to GAAP. Anderson causes $200 in ABC, Inc. merchandise to be shipped to him for free. Q43. Strategic management involves the _________, directing, _________ and controlling of a company's strategy-related decisions and actions. financing; marketing planning; financing marketing; planning planning; organizing Q44. The DMAIC (define, measure, analyze, improve, control) process is relevant to CCC21. balanced scorecard. strategic matrix analysis. Six Sigma. Q45. Identifying and assessing a company's resource strengths and weaknesses and its external opportunities and threats is called a __________________. SWOT analysis competitive asset/liability analysis competitive positioning analysis strategic resource assessment Q46. The market opportunities most relevant to a particular company are those that offer the best growth and profitability. provide a strong defense against threats to the company's profitability.. hold the most potential for product innovation. provide avenues for taking market share away from close rivals. Q47. Organizational requirements to support and sustain cost leadership are subjective measurements and incentives. tradition of closeness to key customers. frequent, detained control reports. some personnel skilled in sales and operations. Q48. Organizational requirements to support and sustain differentiation activities include which of the following: frequent, detailed control reports structured organization and responsibilities tradition of closeness to key customers incentives based on meeting strict, quantitative targets Q49. A __________ is an articulation of a simple criterion or characterization of what the leader sees the company must become to establish and sustain global leadership. leader's principle mission leader's vision strategic intent Q50. The overriding goal of a control system is to enable the __________ and __________ of the business. improvement, diversification process, development survival, long-term success invention, entrepreneurship
Solution Description

Q1. To decrease the nation's money supply, the Fed can

increase reserve requirement.

decrease reserve requirements.

decrease the discount rate.

buy government securities in the open market.

Q2. In the long-run framework, budget surpluses

should be run whenever output dips below potential output.

should never be run since they crowd out investment in the short run.

are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment.

should be run on a permanent basis since they boost saving and investment and stimulate economic growth.

Q3. Which of the following will decrease the nominal deficit?

An increase in taxes

An increase in government expenditures

An increase in interest rates

An increase in the debt

Q4. If a country's trade deficit increases, then

its consumption must be falling relative to its production.

its consumption must be rising relative to its production.

it must be buying more assets from foreigners.

it must be selling fewer assets to foreigners.

Q5. Which of the following statements best describes the modern view of marketing?

Marketing is only necessary for profit-oriented firms.

Marketing consists mainly of advertising and personal selling.

Marketing anticipates customer needs.

Marketing begins as soon as products are produced.

Q6. Ethnic markets are becoming more important to marketers because

the buying power of ethnic submarkets is decreasing.

the median age of Asian, African, and Hispanic Americans is much higher than that of White Americans.

the number of ethnic consumers is growing at a much faster rate than the overall society

they make a clear segment with similar backgrounds and common language, religion, and culture.

Q7. Segmenting, in contrast to combining,

tends to focus more on customer similarities than on differences.

tries to identify homogeneous submarkets and develop different marketing mixes for each submarket.

usually means settling for a smaller sales potential.

relies more on promotion appeals and minor product differences to create general customer appeal among several submarkets.

Q8. Cargill, Inc. is finally earning a profit on the unique product it introduced 6 months ago. Cargill's advertising is both informative and persuasive. Much money is being spent on place development. There is little price competition, although several competitors have come out with reasonable imitations. Total industry sales and profits are both rising. In which stage of the product life cycle is Cargill operating?

Market growth

Market introduction

Sales decline

Market maturity

Q9. National Printing Equipment (NPE) produces equipment that helps to print newspapers and magazines. The company sells directly to printers and through wholesalers. Its salespeople negotiate prices with individual customers and often have to match competitors' prices. NPE has a new product, the Gutenberg NP201, with some competitive advantages now, but competitors are expected to follow quickly with similar products. The new product is being introduced into a market with elastic demand. In regard to freight charges for its equipment, NPE's invoice reads, "Seller pays the cost of loading equipment onto a common carrier. At the point of loading, title to such products passes to the buyer, who assumes responsibility for damage in transit, except as covered by the transportation agency."

?

National Printing Equipment's new Gutenberg NP201 should probably use ________________.

price fixing

skimming pricing

introductory pricing

penetration pricing

Q10. The main reason that vertical marketing system

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