GLO BUS EXAM PREP QUESTIONS AND
ANSWERS FULL TEST PAPER ACCURACY
CHECKED
◉ 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?
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
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 sub-par ROE?
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?
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.
Answer: Are worth careful scrutiny by the managers of all
companies because when the bench-marking data signals that a
company's costs/operating profits for one or more of the
benchmarks are clearly out-of-line (or unappealing), managers
are well advised to take corrective action in the next decision
round.
◉ According to the depreciation rates used by the company and
described in the Production Cost Report, if a company adds 50
new workstations at a cost of $75,000 each and also spends $10
million for an addition to its assembly plant to accommodate the
new workstations, than its annual depreciation costs will rise by
Answer: $550,000.
ANSWERS FULL TEST PAPER ACCURACY
CHECKED
◉ 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?
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
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 sub-par ROE?
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?
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.
Answer: Are worth careful scrutiny by the managers of all
companies because when the bench-marking data signals that a
company's costs/operating profits for one or more of the
benchmarks are clearly out-of-line (or unappealing), managers
are well advised to take corrective action in the next decision
round.
◉ According to the depreciation rates used by the company and
described in the Production Cost Report, if a company adds 50
new workstations at a cost of $75,000 each and also spends $10
million for an addition to its assembly plant to accommodate the
new workstations, than its annual depreciation costs will rise by
Answer: $550,000.
