MQM 385 CHAPTER 5 Questions and Answers 100% Solved
When assessing competitive advantage by measuring accounting profitability, we use financial
data and ratios derived from publicly available ______ data such as income statements an
balance sheets. —Answer: accounting
Managers must be able to accurately assess the ______ of a firm and compare and _____ their
performance to competitors in the same industry. —Answer: performance; benchmark
One of the most commonly used metrics in assessing firm financial performance is _______. —
Answer: return on invested capital (ROIC)
ROIC= —Answer: net profits/invested capital
ROIC is a popular metric because it is a good proxy for _______. —Answer: firm profitability
If a firm's ROIC is great than it's ______, it generates value. —Answer: cost of capital
The _______ represents a firm's cost of financing operations from both equity through issuing
stock and debt through issuing bonds. —Answer: cost of capital
_____ is the performance of two or more firms at the same level. —Answer: competitive parity
Quick Connect is an instant messaging mobile application. Users have access to a basic version
with limited message recipients for free, but they have to pay a fee to have unlimited message
recipients or to use advanced features. Which of the following business models does this best
illustrate?
- subscription-based
- freemium
© 2025 All rights reserved
, - pay-as-you-go
- razor-razor blade —Answer: freemium
Which of the following is an advantage of accounting data?
- accounting data consider off-balance sheet items, which makes comparing companies with
different capital structure easy.
- accounting data can be easily transformed into financial ratios to help assess and evaluate the
competitive performance of firms
- accounting data focus mainly on intangible assets, which are more important than tangible
assets in firms' stock market valuations —Answer: accounting data can be easily transformed
into financial ratios to help assess and evaluate the competitive performance of firms
_______ is best described as the difference between the value a consumer attaches to a good or
service and what he or she paid for it.
- consumer equity
- consumer lifetime value
- consumer price index
© 2025 All rights reserved
When assessing competitive advantage by measuring accounting profitability, we use financial
data and ratios derived from publicly available ______ data such as income statements an
balance sheets. —Answer: accounting
Managers must be able to accurately assess the ______ of a firm and compare and _____ their
performance to competitors in the same industry. —Answer: performance; benchmark
One of the most commonly used metrics in assessing firm financial performance is _______. —
Answer: return on invested capital (ROIC)
ROIC= —Answer: net profits/invested capital
ROIC is a popular metric because it is a good proxy for _______. —Answer: firm profitability
If a firm's ROIC is great than it's ______, it generates value. —Answer: cost of capital
The _______ represents a firm's cost of financing operations from both equity through issuing
stock and debt through issuing bonds. —Answer: cost of capital
_____ is the performance of two or more firms at the same level. —Answer: competitive parity
Quick Connect is an instant messaging mobile application. Users have access to a basic version
with limited message recipients for free, but they have to pay a fee to have unlimited message
recipients or to use advanced features. Which of the following business models does this best
illustrate?
- subscription-based
- freemium
© 2025 All rights reserved
, - pay-as-you-go
- razor-razor blade —Answer: freemium
Which of the following is an advantage of accounting data?
- accounting data consider off-balance sheet items, which makes comparing companies with
different capital structure easy.
- accounting data can be easily transformed into financial ratios to help assess and evaluate the
competitive performance of firms
- accounting data focus mainly on intangible assets, which are more important than tangible
assets in firms' stock market valuations —Answer: accounting data can be easily transformed
into financial ratios to help assess and evaluate the competitive performance of firms
_______ is best described as the difference between the value a consumer attaches to a good or
service and what he or she paid for it.
- consumer equity
- consumer lifetime value
- consumer price index
© 2025 All rights reserved
