BUS1750 Final Exam Test Questions
and All Correct Answers 2025-2026
Updated.
Gross Margin - Answer = (Op. Rev - Cost of Rev) / Op. Rev
Operating Margin - Answer = (Op. Rev - Cost of Rev - Expenses) / Op. Rev
Net Profit Margin - Answer = (Op. Income - Interest Expense - Income Tax) / Net Sales
Revenue
Gross Margin (given price and cost) - Answer = (Price - Cost) / Price
Gross Margin (given price and gross margin) - Answer = Price * (2- Gross Margin)
Gross Margin (given cost and gross margin) - Answer = Price * (2 - Gross Margin)
Annual Depreciation (straight-line method) - Answer = (Purchase Cost - Salvage Value) /
Useful Life
Owner's Equity - Answer = (Total Current Assets + Total Long Term Assets) - (Total Current
Liabilities + Total Long Term Liabilities)
Return on Equity - Answer = (Earning Before Income Tax + Tax Expense) / (Total Assets - Total
Liabilities)
Debt/Equity Ratio - Answer = (Total Current Liabilities + Total Long-Term Liabilities) / Owner's
Equity
Cash Operating Activities - Answer STEP ONE: Add Depreciation to Net Income.
STEP TWO: Subtract (positive/increase) change in A/R.
STEP THREE: Subtract (positive/increase) change in Inventory.
, STEP TWO: Subtract dividends paid.
STEP THREE: Subtract purchases of shares (buy backs).
Elasticity of Demand - Answer = (Change in Quantity / Actual Quantity) / (Change in Price /
Actual Price)
Lifetime Customer Value (LCV) - Answer = (Avg. Purchase Amount $) * (Avg. Purchase Rate #)
* (Gross Margin %) * ((Retention Rate %) / (1 + Discount Rate %) - Retention Rate))
Economic Order Quantity - Answer = ((Demand for Units per Year / Optimal Order Quantity)
* Total Cost of Processing the Order) + ((Optimal Order Quantity / 2) * Inventory Cost per Year)
Economic Order Quantity (STEP ONE: Find Q) - Answer = SQUARE ROOT OF (2 * Demand for
Part per Year * Total Cost of Ordering) / Inventory Cost of Holding)
CH 1
The first major application of the concept of Interchangeable Parts was in the manufacture of
rifles during the industrial revolution. - Answer True
CH 1
Henry Ford implemented a moving assembly line that greatly reduced the cost of manufacturing
cars, making them affordable to more and more customers. - Answer True
CH 1
Which of the following statements are challenges that resulted from the development of mass
production of goods? Select all that apply. - Answer Environmental pollution
Poor working conditions
Lack of customization of products
CH 1
In the Wealth of Nations, Adam Smith claims which of the following principles are necessary for
presents economic progress in a free market economy: - Answer Pursuit of self interest
Division of labor
Freedom of trade
and All Correct Answers 2025-2026
Updated.
Gross Margin - Answer = (Op. Rev - Cost of Rev) / Op. Rev
Operating Margin - Answer = (Op. Rev - Cost of Rev - Expenses) / Op. Rev
Net Profit Margin - Answer = (Op. Income - Interest Expense - Income Tax) / Net Sales
Revenue
Gross Margin (given price and cost) - Answer = (Price - Cost) / Price
Gross Margin (given price and gross margin) - Answer = Price * (2- Gross Margin)
Gross Margin (given cost and gross margin) - Answer = Price * (2 - Gross Margin)
Annual Depreciation (straight-line method) - Answer = (Purchase Cost - Salvage Value) /
Useful Life
Owner's Equity - Answer = (Total Current Assets + Total Long Term Assets) - (Total Current
Liabilities + Total Long Term Liabilities)
Return on Equity - Answer = (Earning Before Income Tax + Tax Expense) / (Total Assets - Total
Liabilities)
Debt/Equity Ratio - Answer = (Total Current Liabilities + Total Long-Term Liabilities) / Owner's
Equity
Cash Operating Activities - Answer STEP ONE: Add Depreciation to Net Income.
STEP TWO: Subtract (positive/increase) change in A/R.
STEP THREE: Subtract (positive/increase) change in Inventory.
, STEP TWO: Subtract dividends paid.
STEP THREE: Subtract purchases of shares (buy backs).
Elasticity of Demand - Answer = (Change in Quantity / Actual Quantity) / (Change in Price /
Actual Price)
Lifetime Customer Value (LCV) - Answer = (Avg. Purchase Amount $) * (Avg. Purchase Rate #)
* (Gross Margin %) * ((Retention Rate %) / (1 + Discount Rate %) - Retention Rate))
Economic Order Quantity - Answer = ((Demand for Units per Year / Optimal Order Quantity)
* Total Cost of Processing the Order) + ((Optimal Order Quantity / 2) * Inventory Cost per Year)
Economic Order Quantity (STEP ONE: Find Q) - Answer = SQUARE ROOT OF (2 * Demand for
Part per Year * Total Cost of Ordering) / Inventory Cost of Holding)
CH 1
The first major application of the concept of Interchangeable Parts was in the manufacture of
rifles during the industrial revolution. - Answer True
CH 1
Henry Ford implemented a moving assembly line that greatly reduced the cost of manufacturing
cars, making them affordable to more and more customers. - Answer True
CH 1
Which of the following statements are challenges that resulted from the development of mass
production of goods? Select all that apply. - Answer Environmental pollution
Poor working conditions
Lack of customization of products
CH 1
In the Wealth of Nations, Adam Smith claims which of the following principles are necessary for
presents economic progress in a free market economy: - Answer Pursuit of self interest
Division of labor
Freedom of trade
