A+ Grade
Which one of the following is NOT a way to improve the P/Q rating of a company's brand of multi-
featured cameras
- correct answer Increasing the number of models in the company's line of multi-featured cameras.
Assume a company's Income Statement for a given quarter is as follows: Sales Revenues (50,000),
Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses
(2,000), Operating Profit (14,400), Net Interest (750), Income Before Taxes (13,650), Taxes (4,095), Net
Income (9,555). Based on the above data, which of the following statements is false?
- correct answer Delivery costs are 2.8% of revenues and represent the company's smallest cost
component.
One of the benefits of pursuing a strategy of social responsibility and corporate citizenship is
- correct answer An enhanced image rating, provided company spending for socially responsible
activities is meaningful and is sustained over a multi-year period.
Which of the following is NOT an action company co-managers can take to boost a subpar ROE?
- correct answer Issue additional shares of stock and use the proceeds to pay down the debt outstanding
on the company's line of credit.
Which one of the following actions is usually a dependable and appealing way for managers to try to
boost their company's EPS?
- correct answer Achieve a differentiation-based competitive advantage over rivals in both the entry-
level and multi-featured camera segments that company managers are savvy enough to sustain; as the
market demand for digital cameras grows worldwide and the company exploits its competitive
advantage to win additional sales, the profit margins from a growing sales volume of entry-level and
multi-featured digital cameras typically results in increase in EPS.
The industry-low, industry-average, and industry-high benchmarks for camera costs and operating
profits on pp. 5-6 of each issue of the GLO-BUS Statistical Review.