MAN 4752 COMPXM UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

MAN 4752 COMPXM UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS

Question:
1. How do you increase your stock price? (3)
Answer:
1. Increase EPS
2. Retire stock
3. Issue a dividend

Question:
2. How do you find EPS?
Answer:
Net Profit / # shares outstanding

Question:
3. What is the prime rate?
Answer:
The interest rate commercial banks charge their most credit worthy customers.

Question:
4. How do you find the number of months of inventory you have left? (3)
What should be your ideal inventory supply?
Answer:
1. Inventory (balance sheet) / Avg. monthly sales
2. (Inventory / Sales) * 12
3. (Unit Inventory / Unit Sales) * 12
[Average monthly sales = sales / 12 ]
Around 3 months

Question:
5. What is included in SG&A expenses? (4)
Answer:
1. R & D
2. Promotion budget
3. Sales budget
4. Administrative expenses

Question:
6. Under which strategy do firm's spend more on SG&A expenses as a percentage of sales?
Answer:
Differentiators

Question:
7. How do you find the amount of units a firm missed selling for a particular product? (2 steps)

,Answer:
1. Potential market share for specific product - total actual market share from
2. Multiply the result by the total potential market share for all segments

Question:
8. How do you find the amount a firm's EBIT would have increased if they would not have stocked out of a
specific product? (3 steps)
Answer:
1. Find the amount of units the product missed selling
2. Multiply the result by the product's price
3. Multiply the result of #2 by the product's CM

Question:
9. An assembly line with higher automation usually has what? (4)
Answer:
1. Fewer workers
2. Lower labor costs
3. Higher profits
4. Longer R&D revisions

Question:
10. What does is mean to have an automation of 1? What about 7?
What does each level represent? (2)
Answer:
level of 1:
- 1 machine and 10 workers
level of 7:
- 7 machines and 4 workers
Each additional unit = 10% decrease in labor costs Each additional unit = ($4 * capacity) COST OF AU-
TOMATION

Question:
11. What are the aspects considered under a product's "product" factor? (3)
Answer:
1. Reliability
2. Position (performance and size)
3. Age

Question:
12. What are the aspects considered under a product's "place" factor?
Answer:
Promotion budget

Question:
13. What are the aspects considered under a product's "promotion" factor?
Answer:
Sales budget

, Question:
14. Customer awareness deals with what? What about customer accessibility?
Answer:
Awareness: Promotion budget
Accessibility: Sales budget

Question:
15. For a product to be a worthy competitor it must have a survey score over what?
Answer:
5

Question:
16. How can you tell how many different products are emerging next year?
Answer:
No sales but have both capacity and automation

Question:
17. How do you find ROS?
Answer:
Profit / Sales

Question:
18. What does ROS represent? (5)
What kind of strategy usually has a high ROS?
Answer:
1. Profit margin
2. % of every sales dollar that is profit
3. Indicator of competition within an industry
4. How hard we are working each dollar of sales
5. A pure income statement relationship
Strategy: differentiation with premium pricing

Question:
19. What makes up the DuPont Chain? (5)
What should they typically be?
Answer:
1. ROS
2. Asset turnover (above 1)
3. ROA
4. Leverage (1.8 - 2.8)
5. ROE

Question:
20. What can cause a low ROS? (6)