ETS MFT BUSINESS EXAM | Answered Correctly! Summer 2022-23.

ETS MFT BUSINESS EXAM The principal difference between variable costing and absorption costing centers on: a) whether variable manufacturing costs should be included as product costs b) whether fixed manufacturing costs should be included as product costs c) whether fixed manufacturing costs and fixed selling and administrative costs should be included as product costs d) none of these. General Bikes is debating which marketing research options to employ. The traditional person-to-person methods have been effective; however, the new director of market research is campaigning for online-based research. What argument for this method might he/she use? a) Consumers are more relaxed at home in front of their computers, therefore it is more likely the responses will be truthful b) Online research has been standardized for each industry, making it easier to understand them c) A well-designed, Internet-based marketing research project can cost less and yield information faster than offline research d) Person-to-person methods most often incorporate researcher bias into the surveys and observations Which of the following is an appropriate Federal Reserve action to stimulate the United States economy? a) Selling government bonds on the open market b) Increasing the discount rate c) Reducing the reserve requirement d) Cutting taxes A small number of people with complementary skills who are committed to a common purpose, a set of performance goals, and an approach for which they hold themselves mutually accountable is referred to as a a) committee b) task force c) group d) team A company is considering producing a product for a new market. The fixed costs required for manufacturing and delivering the product is $50,000. Labor and material costs are estimated to be approximately $25.00 per product. If the product is sold for $35.00 each, the firm's break-even volume would be: a) 50,000 units b) 5,000 units c) 2500 units d) 500 units A problem associated with equity theory is that: a) it focuses on providing incentives for the long run when most workers are mainly concerned with incentives that apply to their current situation b) managers have a hard time applying it to real-world situations because of its abstract nature c) worker motivation is based on perceptions of fairness, and the perceptions workers have about their contributions are not always accurate d) it is concerned with the nature of the job itself rather than with what motivates the workers who perform the job All of the financial statements are for a period of time except the a) Income statement b) Owner's equity statement c) Balance sheet d) Statement of cash flows By assembling computers only after customers have paid them for, resulting in a lower finished goods inventory, Dell Computer Co. achieved: a) Increased quality b) A competitive advantage c) Increased responsiveness d) Increased innovation e) None of the above The Bill of Rights refers to: a) the inalienable rights found at the beginning of the Constitution b) the first ten amendments to the Constitution c) a specific listing of individual rights found in the original text of the Constitution. d) a grouping of individual rights set forth by the United States Supreme Court shortly after the Constitution was ratified by the states Fiedler proposes that all of the following determine whether a task- or relationship-oriented style is more effective except: a) Situational favorableness b) Leader-member relations c) Task structure d) Position power Which one of the following statements is correct given the following exchange rates? US $ per 1 foreign unit Country FRI THU South Africa 0.1028 0.1023 Thailand 0.0284 0.0286 a) On Thursday, one U.S. dollar was equal to 0.1023 South African rand. b) On Friday, one Thai baht was equal to $35.21. c) Both the South African rand and the Thai baht appreciated against the U.S. dollar from Thursday to Friday. d) The South African rand appreciated from Thursday to Friday against the U.S. dollar. e) The U.S. dollar depreciated from Thursday to Friday against the Thai baht. Family branding refers to a group of a) similar brands of products from different makers b) different brands of products from different makers within the same industry c) different products marketed under a single brand name d) similar products sold by small, family-owned firms A project has a net present value of zero. Which one of the following best describes this project? a) The project has a zero percent rate of return. b) The project requires no initial cash investment. c) The project has no cash flows. d) The summation of all of the project's cash flows is zero. e) The project's cash inflows equal its cash outflows in current dollar terms A firm that would like to know whether it has enough cash to meet its bills would be most likely to use which category of financial ratio? a) Liquidity b) Leverage c) Efficiency d) Profitability A major competitor of XYZ, Inc. suddenly creates a new type of product that makes XYZ's products obsolete. This is an example of which type of force in the environment? a) General environment b) Task environment c) Economic environment d) Legal environment e) Political environment Which of the following is not one of the four primary functional areas of a firm? a) human resources b) legal c) marketing d) operations When employees use email, word processors, electronic scheduling / calendars, they are using which of the following? a) Transaction processing systems b) Process control systems c) Office automation systems d) Decision support systems Which of the following statements about a systems flowchart is true? a) It is used in systems design to define and describe each piece of data. b) It is a method of writing programs using only three basic constructs: sequence, selection, and repetition. c) It documents the sequence of processing steps that take place in an information system. d) It documents the logical design of an information system. The primary purpose of the statement of cash flows is to report a) A company's investing transactions b) A company's financing transactions c) Information about cash receipts and cash payments of a company d) The net increase or decrease in cash In service blueprinting, which line separates front office activities from back office activities? a) Line of visibility b) Line of intervention c) Line of influence d) Line of support The common characteristic possessed by all assets is a) Long life b) Great monetary value c) Tangible nature d) Future economic benefit The longest path through the network, in terms of time, is referred to as the a) activity-on-node path b) path of greatest slack c) critical path d) scheduling path A legal institution associated with an independent judiciary relying on case precedents is called a) common law system b) civil law system c) theocratic law system d) None of the above Which of the following is not part of the accounting process? a) Recording b) Identifying c) Financial decision making d) Communicating What is the median of 26, 30, 24, 32, 32, 31, 27 and 29? a) 32 b) 29 c) 30 d) 29.5 e) 30.5 Under the common law, the ____ must be the mirror image of the ____ a) contract, consideration. b) contract, offer c) offer, acceptance d) acceptance, offer Sue and Neal are twins. Sue invests $5,000 at 7 percent when she is 25 years old. Neal invests $5,000 at 7 percent when he is 30 years old. Both investments compound interest annually. Both Sue and Neal retire at age 60. Which one of the following statements is correct assuming that neither Sue nor Neal has withdrawn any money from their accounts? a) Sue will have less money when she retires than Neal. b) Neal will earn more interest on interest than Sue. c) Neal will earn more compound interest than Sue. d) If both Sue and Neal wait to age 70 to retire, then they will have equal amounts of savings. e) Sue will have more money than Neal as long as they retire at the same time In general, the __________ difficult it is for an organization to enter an industry as a new competitor, the __________ are the barriers to entry to this industry a) Less; lower b) More; lower c) More; higher d) Less; higher An open access good (or common property good), such as a fishery: a) Is rival but not excludable b) Is both rival and excludable c) Is neither rival nor excludable d) Is not rival but is excludable A differentiation strategy enables a business to address the five competitive forces by a) lessening competitive rivalry by distinguishing itself b) having brand-loyal customers become more sensitive to prices c) increasing economies of scale d) serving a broader market segment Only one of the following statements is false at the long-run equilibrium for a firm in a monopolistically competitive industry. Which one is false? a) Price equals Average Total Cost, like a competitive firm b) Price exceeds marginal cost, like a monopolist c) Firms make zero economic profit, like a competitive firm d) Firms produce at the bottom of the ATC curve, like a competitive firm Dreamland Pillow Company sells the "Old Softy" model for $20 each. One pillow requires two pounds of raw material and one hour of direct labor to manufacture. Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents its factory on a five-year lease for $4,000 per month. All costs are considered costs of production. Another firm has offered to produce "Old Softy" and sell them to Dreamland for $12 each. Dreamland cannot avoid the factory lease payments, but can avoid all labor costs if it does not produce these pillows. Under these conditions, how many "Old Softy" pillows must Dreamland sell to earn monthly gross profits of $1,000? a) 417 b) 500 c) 625 d) 875. The correct answer is 625 Pillows Gross Profit = Net Sales - Cost of Goods Sold Since you are buying pillows and not manufacturing pillows your variables costs are the cost of purchasing each pillow which is $12. Although the problem doesn't specifically state it, you should assume that $12 buys the whole pillow (labor and materials). You still have to cover the cost of the lease of $4,000 but since you don't have employees to supervise you can avoid the fixed cost of supervision. Break Even Analysis Selling Price = 20 Variable Costs = 12 Contribution Margin per unit = 8 Contribution Margin Ratio = 8/20 = .4 or 40% Fixed Costs = 4000 (unavoidable cost of the factory lease) Break-Even Units = 4000/8 = 500 Units ($0.00 Gross Profit) Break-Even Sales = 4000/.4 = $10,000 (also 500 x 20) Desired Profit of $1,000 Fixed Costs ($1000) + Desired Profit ($4000) = $5,000 5000/8=625 Units or 5000/.4 = $12,500 in Sales When a trial is conducted with a jury, the judge determines issues of ____ and the jury determines questions of ____ a) evidence, law. b) law, evidence c) law, fact d) fact, law The central processing unit (CPU) in a personal computer contains the a) control unit and primary memory b) control unit and arithmetic/logic unit c) arithmetic/logic unit and bus d) arithmetic/logic unit only Marketers must constantly monitor their competitors' products, prices, distribution, and promotional efforts because the: a) competitors may be violating the truth-in-advertising laws b) actions of competitors may threaten the firm's monopoly position c) actions of competitors may create an oligopoly within an industry d) new product offerings by a competitor may require adjustments to one or more components of the firm's marketing mix What is the major distinction between executive and independent agencies? a) Executive agencies govern business issues while independent agencies regulate individual matters. b) The president has greater control over executive agencies. c) The Administrative Procedure Act regulates independent agencies but not executive agencies. d) Subpoenas may be issued by independent agencies; executive agencies do not have subpoena power. Primary value chain activities that involve the effective layout of receiving dock operations (inbound logistics) and support value chain activities that include expertise in process engineering (technology development) characterize what generic strategy? a) differentiation b) overall cost leadership c) differentiation focus d) stuck-in-the-middle Managers at ABC, Inc. analyze the current situation of their organization and then develop plans to help their organization to accomplish its mission and achieve its goals. This is known as: a) Synergy planning b) Strategy formulation c) Functional planning d) SWOT analysis Which of the following terms refers to the phenomenon in which group members are pressured to conform in decision making? a) Group consensus b) Brainstorming c) Group norms d) Groupthink If the Federal Reserve decides to decrease the money supply, which of the following most likely will occur? a) An increase in private investment and consumer expenditure b) A decrease in private investment and consumer expenditure c) An increase in private investment and a decrease in consumer expenditure d) A decrease in private investment and an increase in consumer expenditure Business torts consist of: a) interference with contractual relations. b) disparagement. c) fraudulent misrepresentation d) All of the above Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 12 percent rate of return, how much are you willing to pay to purchase one share of this stock today? a) $12.23 b) $12.55 c) $12.67 d) $12.72 The incomes of a group of 50 loan applicants are obtained. Which level of measurement is income? a) Nominal b) Ordinal c) Interval d) Ratio e) None of the above Which of the following is an assumption of Theory Y as developed by Douglas McGregor? a) Workers seek responsibility. b) Workers dislike work. c) Workers prefer direction. d) Workers are interested in monetary gains. Steel, paper, paints, and chemicals are examples of industries that most likely use a) batch production systems b) repetitive production systems c) continuous production systems d) mass production systems Dreamland Pillow Company sells the "Old Softy" model for $20 each. One pillow requires two pounds of raw material and one hour of direct labor to manufacture. Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents its factory on a five-year lease for $4,000 per month. All costs are considered costs of production. How many pillows must Dreamland produce and sell each month to earn a monthly gross profit of $1,000? a) 300 b) 350 c) 600 d) 700 What is the measure that indicates how precise a prediction of Y is based on X or, conversely, how inaccurate the prediction might be? a) Regression equation b) Slope of the line c) Standard error of estimate d) Least squares principle An example of an unfair trade practice is: a) EU Government policy prohibiting imports of U.S. Beef b) EU prohibitions of Latin American bananas c) US tariffs on European steel d) All of the above The channels of distribution create all of the following utilities EXCEPT a) time b) place c) form d) possession Routine physical examinations are conducted annually as part of a health service program for the employees. It was discovered that 8% of the employees needed corrective shoes, 15% needed major dental work and 3% needed both corrective shoes and major dental work. What is the probability that an employee selected at random will need either corrective shoes or major dental work? a) 0.20 b) 0.25 c) 0.50 d) 1.00 e) None of the above Sessler Manufacturers made two announcements concerning its common stock today. First, the company announced that the next annual dividend will be $1.75 a share. Secondly, all dividends after that will decrease by 1.5 percent annually. What is the maximum amount you should pay to purchase a share of this stock today if you require a 14 percent rate of return? a) $11.29 b) $12.64 c) $13.27 d) $14.00 e) $14.21 In ___________, provincial governments play a substantial role in trade and investment regulation a) China b) Norway c) Indonesia d) Canada Douglass Interiors is considering two mutually exclusive projects and have determined that the crossover rate for these projects is 11.7 percent. Project A has an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5 percent. Given this information, which one of the following statements is correct? a) Project A should be accepted as its IRR is closer to the crossover point than is Project B's IRR. b) Project B should be accepted as it has the higher IRR. c) Both projects should be accepted as both of the project's IRRs exceed the crossover rate. d) Neither project should be accepted since both of the project's IRRs exceed the crossover rate. e) You cannot determine which project should be accepted given the information provided. There are 10 rolls of film in a box and 3 are defective. Two rolls are to be selected without replacement. What is the probability of selecting a defective roll followed by another defective roll? a) 1/2, or 0.50 b) 1/4, or 0.25 c) 1/120, or about 0.0083 d) 1/15, or about 0.07 The process of collecting information about the external marketing environment is called: a) environmental management b) marketing research c) marketing management d) environmental scanning Which Foreign Direct Investment (FDI) attempts to acquire particular resources at a lower real cost than could be obtained in the home country? a) Market-seeking FDI b) Efficiency-seeking FDI c) Resource-seeking FDI d) Strategic asset-seeking FDI ____ planning normally is performed by middle managers and typically has a one-year time frame a) Strategic planning b) Tactical planning c) Operational planning d) Contingency planning The two international treaties that govern patent protection are a) Paris Convention and Patent Cooperation Treaty b) International Patent Patrol and Patent Treaty c) Patent Protection Treaty and International Patent Patrol d) Patent Protection Treaty and Patent Cooperation Treaty In a large firm, the pool of applicants for the positions of sales manager and sales associate consists of three men and three women. If each candidate has an equal chance of being selected, what is the probability that both positions will be filled by men? a) 0.20 b) 0.25 c) 0.33 d) 0.50 Maxwell has been named to an upper-level management position at QVC. He will be working with transportation media, order processing, and development of marketing channels. Maxwell is involved in developing _____ strategies. a) product b) distribution c) promotional d) marketing The principle of diversification tells us that: a) concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk. b) concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk. c) spreading an investment across five diverse companies will not lower the total risk. d) spreading an investment across many diverse assets will eliminate all of the systematic risk. e) spreading an investment across many diverse assets will eliminate some of the total risk The effect whereby slight demand variability is magnified as it moves back upstream in the supply chain is known as a) the bullwhip effect b) postponement c) collaborative replenishment d) direct-response delivery A nuclear power plant uses electronic sensors linked to computers to continually monitor processes and make instant (real-time) adjustments that control the power generation process. This is an example of a(n): a) Transaction processing system b) Decision support system c) Enterprise collaboration system d) Process control system Within the context of the capital asset pricing model (CAPM), the risk measure known as beta is often computed by regressing the return of the company's stock against the a) return on the company's bonds b) return on the market portfolio c) change in the gross domestic product d) change in the consumer price index A department manager telephoned two managers in other departments to discuss a cost savings idea that would benefit their departments as well as her own. Which of the following most accurately defines the communication channel that the manager was using? a) Upward b) Lateral c) Downward d) Hierarchical. Information systems are either operations or management systems. Which one of the following would NOT be classified as an operations system? a) Transaction processing systems b) Process control systems c) Functional information systems d) Executive support systems Which terms would make the following sentence true? Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce. a) low, little b) low, considerable c) high, little d) high, considerable When a domestic firm permits a foreign company to manufacture and sell its product in exchange for a fee or royalty, the process is termed a) importing b) exporting c) licensing d) countertrading Which of the following statements is NOT correct concerning the Cash Budget? a) It is not necessary to prepare any other budgets before preparing the Cash Budget b) The Cash Budget should be prepared before the Budgeted Income Statement c) The Cash Budget should be prepared before the Budgeted Balance Sheet d) The Cash Budget builds on earlier budgets and schedules as well as additional data A manager who chooses the wrong goals for the organization and makes poor use of the organization's resources in pursuing these goals is said to have: a) Low effectiveness/low efficiency b) Low effectiveness/high efficiency c) High effectiveness/low efficiency d) High effectiveness/high efficiency e) None of the above In the late 1970's and 1980's, the U.S. car manufactures sought to limit ________ import to the U.S.? a) Cuban b) Asian c) Japanese d) Chinese A standard marketing strategy that is modified only minimally for use in each of the firm's foreign markets is a _____ marketing strategy. a) lateral entry b) unipolar c) global d) multidomestic Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner, Sally Thornton, wishes to replace the printed catalog with an online catalog. Ms. Thornton decides to conduct a market research project to explore how Priceless Treasures' target customers would respond to the online catalog approach. Ms. Thornton plans to conduct an online survey of her customers. What is the most significant problem with using this survey method rather than a traditional mail approach? a) Respondents may not answer the survey truthfully. b) Customers who do not use the Internet will not be in the sample. c) Respondents will not be able to see the entire survey and thus may answer only part of it. d) Online surveys cannot prevent multiple or inappropriate responses to complex questions. A project consists of 150 jobs. The expected completion time for each job is given in days. The project has three critical paths with two jobs in common, J and K. In order to finish the project one day early, the completion time should be reduced one day for a) each of the 150 jobs b) each of the jobs on the three critical paths c) either Job J or Job K d) both Job J and Job K The term "net working capital" refers to a) inventories, receivables, and current notes and investments b) assets divided by liabilities c) current assets less short-term liabilities d) net assets left over after subtracting cost of goods sold U.S. dollars deposited in a bank in Switzerland are called: a) foreign depository receipts. b) international exchange certificates. c) francs. d) Eurocurrency. e) Eurodollars Carefully dismantling and inspecting a competitor's product to look for design features that can be incorporated into your own product is known as a) concurrent design b) design for manufacturability c) benchmarking d) reverse engineering A SWOT analysis examines a company's a) strategies, weaknesses, opportunities, and threats b) strengths, weaknesses, opportunities, and threats c) strategies, weaknesses, opportunities, and tactical plans d) strengths, weaknesses, operational plans, and threats Saint Martin Hospital boasts one of the world's leading medical imaging programs. Its radiology department specializes in the early detection of particularly serious forms of stomach, intestinal, and colon cancer. The hospital plans to invest in a new system of digital medical imaging and image transmission technologies that will enable its radiologists to view and evaluate intestinal scan results from anywhere in the world. With this investment, the hospital is attempting to overcome which of the constraints of services marketing? a) Inventory b) Intangibility c) Inconsistency d) Inseparability Under the Uniform Commercial Code (UCC) statute of frauds, which of the following terms must be included in writing in order to satisfy the writing requirement? a) The price of the goods. b) The quantity of the goods. c) The signatures and names of the buyer and the seller d) The time and place for delivery A company's buying center encompasses: a) a representative from each department within an organization b) only a gatekeeper and a buyer c) everyone who is involved in any aspect of the buying process d) an exclusive top-notch buying department The degree to which a product meets pre-established standards is known as a) conformance b) performance c) reliability d) none of the above The control of the money supply by the Federal Reserve System is known as a) fiscal policy b) supply-side policy c) congressional policy d) monetary policy The economic entity assumption requires that the activities a) Of different entities can be combined if all the entities are corporations b) Must be reported to the Securities and Exchange Commission c) Of a sole proprietorship cannot be distinguished from the personal economic events of its owners d) Of an entity be kept separate from the activities of its owner In general, as the order size increases, a) ordering costs decrease and carrying costs increase b) ordering costs increase and carrying costs decrease c) both ordering and carrying costs increase d) both ordering and carrying costs decrease The essence of common law is: a) its prospective nature. b) the concept of stare decisis c) its flexibility. d) the plain meaning doctrine. Natural Monopolies are characterized by... a) Economies of Scale (Increasing returns to scale) b) Constant Returns to Scale c) Diseconomies of Scale (Decreasing returns to scale) d) Non-existent returns to Scale A company had sales of $920,000 and fixed costs were $160,000. What was the income from operations if the contribution margin ratio was 30 percent? a) $116,000 b) $276,000 c) $484,000 d) $644,000 The organizational buying process has more steps than the consumer buying process, which can be attributed to: a) the limited number of suppliers in the B2B marketplace b) the importance of integrating the responsibilities of the wholesalers or retailers c) interpersonal and environmental influences not seen in consumer buying decisions d) business purchasing that introduces new complexities that do not affect consumers In marketing research, a firm might consider using secondary data over primary data because a) secondary data usually cost less b) secondary data are usually more accurate c) primary data are usually non specific d) primary data are likely to be outdated. The probability that a product will operate properly within an expected time frame is the dimension of quality known as a) durability b) reliability c) performance d) serviceability The Organization of the Petroleum Exporting Countries (OPEC) reduces production by 10 percent, and the growth rate of the world economy begins to escalate. How will the simultaneous occurrence of these events affect the equilibrium price and quantity in the world petroleum market? a) Price will increase, but quantity will remain unchanged. b) Price will increase, but quantity is indeterminate. c) Quantity will increase, but price is indeterminate. d) Both price and quantity will increase. What can we conclude if the coefficient of determination is 0.94? a) Strength of relationship is 0.94 b) Direction of relationship is positive c) 94% of total variation of one variable is explained by variation in the other variable d) All of the above are correct Money is the key motivator in a) Herzberg's motivation-hygiene theory b) Maslow's hierarchy of needs c) McGregor's Theory X and Theory Y d) Taylor's scientific management In the calculation of the arithmetic mean for grouped data, which value is used to represent all the values in a particular class? a) The upper limit of the class b) The lower limit of the class c) The frequency of the class d) The cumulative frequency preceding the class e) The class midpoint. On May 31, Company O's general ledger shows a cash balance of $5,123. The May 31 bank statement shows a balance of $4,905. Other information is available as follows: 1. A May 31 deposit of $300 does not appear on the bank statement; but a $3 service charge does. 2. A customer's $40 insufficient funds check has been returned with the bank statement. 3. Outstanding checks of $10, $15, and $100 are identified on May What is the correct cash balance on May 31? a) $4,905 b) $5,080 c) $5,166 d) $5,204 What is the correct reconciled cash balance for May 31? $5,080 There are two parts of a reconciliation: Bank and General Ledger. The Bank has information that has not recorded in the general ledger and the general ledger has information that has not been recorded by the bank. Some things to keep in mind about the bank statement. Bank Credits are positive and recorded as Debits (additions) in your general ledger cash account. Bank Debits are negative and are recorded as credits (negatives) in your general ledger cash account. Start with the Bank Balance $4,905 and add any deposits that were made but did not clear the bank in time to appear on the statement: $300. Then subtract the outstanding checks that were written but have not yet cleared through the bank: $125. Your adjusted bank balance is $5,905+300-125 = $5,080 The ending balance in the General Ledger for cash is $5,123. Until you saw the bank statement you were not aware of the $3 bank service charge or the returned (NSF) check you deposited for $40. You need to subtract both of these items from the general ledger. $5,123-3-40 = $5,080. Based on his scientific management theory, Frederick Taylor developed what pay principle? a) Hourly pay b) Incentive pay c) Profit sharing d) Monthly salary with bonus When using a flexible budget, a decrease in activity within the relevant range: a) decreases variable cost per unit b) decreases total costs c) increases total fixed costs d) increases variable cost per unit Which of the following is true with regard to an exculpatory clause? a) An exculpatory clause excuses one party from liability for his/her own tortious conduct. b) Where one party has a superior bargaining position that has enabled him/her to impose an exculpatory clause upon the other, the courts are inclined to nullify the provision. c) An exculpatory clause may be unenforceable for unconscionability. d) All of the above are true If the spread between the spot and forward exchange rates of two currencies equals the interest rate difference between the two countries, this phenomenon is referred to as a) purchasing-power equality b) commodity arbitrage c) currency hedging d) interest-rate parity As the size of the sample increases, what happens to the shape of the sampling means? a) Cannot be predicted in advance b) Approaches a normal distribution c) Positively skewed d) Negatively skewed An information system that enables all business departments in the same firm to share relevant information and data is called a) an enterprise resource planning (ERP) system b) a material requirements planning (MRP) system c) a decision support system (DSS) d) a point-of-sale (POS) system Green desires to form a new company to manufacture lawn mowers. Green is concerned about having his personal assets exposed to liability for the new company's contracts and torts. Furthermore, he wants to retain control over the company's operations and growth for the next few years. He will need an infusion of equity capital to begin operations. He hopes to take the company public in about five years if it is advantageous to do so at the time. Which of the following types of associations would be best for Green's new company? a) Corporation b) General partnership c) Limited partnership d) Member-managed limited-liability company A valid contract may be unenforceable for which reason(s)? a) Failure to satisfy the Statute of Frauds. b) Running of the Statute of Limitations c) Both (A) and (B) d) A valid contract is always enforceable. Keith is working on a computerized search through one of his company's massive data files. The purpose of the search is to try to detect patterns in product sales. Keith is engaged in: a) data forecasting b) marketing decision support systems c) data mining d) sales forecasting. A system whereby products are delivered to warehouses on a continual basis, where they are sorted, repackaged and distributed to stores without sitting in inventory is known as a) postponement b) cross-docking c) continuous replenishment d) direct-response delivery In the statement of cash flows, the section for cash flows from operating activities will include which of the following? a) Dividends paid b) Issuance of common stock c) A decrease in accounts payable d) Purchase of a building financed entirely by a mortgage Which of the following consists of factors that influence consumer buying power and marketing strategies? a) competitive environment b) cultural environment c) economic environment d) regulatory environment Standard deviation measures which type of risk? a) total b) nondiversifiable c) unsystematic d) systematic e) economic Based on the central limit theorem, the size of the sampling error is a) Directly related to the sample size, i.e., the larger the sample size the larger the sampling error b) Directly related to the population mean, i.e., the larger the mean, the larger the sampling error c) Inversely related to the sample size, i.e., the larger the sample size the smaller the sampling error d) Inversely related to the population standard deviation, i.e., the smaller the standard deviation, the larger the sampling error In monopolistic competition, there are: a) Many firms selling identical products b) Many firms selling similar, but not identical products c) A few firms selling similar, but not identical products d) A few firms selling unique products with no close substitutes Kershaw Bookstore had 500 units on hand at January 1, costing $18 each. Purchases and sales during the month of January were as follows: Date Purchases Sales Jan 14 375 @ $28 Jan 17 250 @ $20 Jan 25 250 @ $22 Jan 29 250 @ $32 Kershaw does not maintain perpetual inventory records. According to a physical count, 375 units were on hand at January 31. The cost of the inventory at January 31, under the LIFO method is: a) $1,000 b) $6,750 c) $7,750 d) $8,000 In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory value and the lowest net income figure? a) First in, first out (FIFO) b) Last in, first out (LIFO) c) Weighted average d) Standard cost Which of the following statements about the tort of negligence is true? a) It cannot be used as a basis for liability for defective products. b) It is a strict liability tort with no defenses. c) It requires proof of some intentional conduct. d) It requires proof of breach of a statutory or common-law duty. M-commerce: a) Involves buying, selling, marketing and servicing of products, services and information over variety of networks b) Uses commercial processes like multimedia advertising, product information and customer support on the Web c) Involves Internet security and payment mechanisms that ensure completion of delivery and payment processes d) All of the choices are correct A company issued a $600,000, 12 percent, 90-day note payable to acquire an office building. What is the maturity value of the note? a) $72,000 b) $600,000 c) $618,000 d) $672,000 In an economy the unemployment rate is 10 percent and the inflation rate is 1 percent. An appropriate fiscal policy in this phase of the business cycle would be to a) increase government spending b) increase income taxes c) decrease transfer payments d) decrease the money supply Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner, Sally Thornton, wishes to replace the printed catalog with an online catalog. Ms. Thornton decides to conduct a market research project to explore how Priceless Treasures' target customers would respond to the online catalog approach. From data collected by the retail jewelers' trade association, Ms. Thornton learns that sales of antique jewelry are rising and that the most common purchasers are older, upper-income couples. Though initially reluctant to purchase online, these customers are beginning to overcome their concerns. From United States Census Bureau data, she learns that this population segment is growing in number and will continue to do so throughout the next two decades. At this point what should Ms. Thornton do? a) Summarize the research findings and recommend implementing the online catalog as the firm's market is clearly growing. b) Collect primary data to determine whether these trends and preferences are reflected in Priceless Treasures' customer base. c) Collect primary data on competitors to determine whether the online market for antique jewelry is saturated. d) End the study and retain the current system as the major customer segment is clearly skeptical of online retailers. You want to have $1 million in your savings account when you retire. You plan on investing a single lump sum today to fund this goal. You are planning on investing in an account which will pay 7.5 percent annual interest. Which of the following will reduce the amount that you must deposit today if you are to have your desired $1 million on the day you retire? I. Invest in a different account paying a higher rate of interest. II. Invest in a different account paying a lower rate of interest. III. Retire later. IV. Retire sooner. a) I only b) II only c) I and III only d) I and IV only e) II and III only The most appropriate level of market coverage for shopping goods is a) intensive distribution b) selective distribution c) uniform distribution d) exclusive distribution requires proof of breach of a statutory or common-law duty - {correct Answer}:- the tort of negligence documents the sequence of processing steps that take place in an information system - {correct Answer}:- systems flowchart The Organization of the Petroleum Exporting Countries (OPEC) reduces production by 10 percent, and the growth rate of the world economy begins to escalate. How will the simultaneous occurrence of these events affect the equilibrium price and quantity in the world petroleum market? - {correct Answer}:- Price will increase, but quantity is indeterminate what would most likely occur as a result of the United States government's imposing tariffs on foreign steel imports? mployment in the United States steel industry would increase In an economy the unemployment rate is 10 percent and the inflation rate is 1 percent. An appropriate fiscal policy in this phase of the business cycle would be to - {correct Answer}:- increase government spending what is an appropriate Federal Reserve action to stimulate the United States economy? - {correct Answer}:- Reducing the reserve requirement If the spread between the spot and forward exchange rates of two currencies equals the interest rate difference between the two countries, this phenomenon is referred to as - {correct Answer}:- interest-rate parity Based on his scientific management theory, Frederick Taylor developed what pay principle? - {correct Answer}:- incentive pay When a domestic firm permits a foreign company to manufacture and sell its product in exchange for a fee or royalty, the process is termed - {correct Answer}:- licensing An information system that enables all business departments in the same firm to share relevant information and data is called n enterprise resource planning (ERP) system The central processing unit (CPU) in a personal computer contains the ontrol unit and arithmetic/logic unit refers to the difference between a company's cash inflows and outflows in a given period. In the strictest sense, net cash flow refers to the change in a company's cash balance as detailed on its cash flow statement. - {correct Answer}:- Net Cash Flow A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk. APM (Capital Asset Pricing Model) Required When combined they tell you all about the company Each provide unique financial information and no one statement will tell you everything about a company's finances - {correct Answer}:- Income Statement Statement of Change in Equity Balance Sheet Statement of Cash Flows Required When combined they tell you all about the company Each provide unique financial information and no one statement will tell you everything about a company's finances Assets= Liabilities + Equity alance Sheet Revenue - Expenses * Short run measurement for a fixed time period, all it tells you is whether or not the company was profitable - {correct Answer}:- Income Statement Measures the change in owners' investment in the company from the beginning of the accounting period to the end of the accounting period - {correct Answer}:- Statement of Change in Equity Describes an unincorporated business, the owners investment apital Describes a corporation, or the owners investment quity In the statement of cash flows, the section for cash flows from operating activities will include which of the following? (A) Dividends paid (B) Issuance of common stock (C) A decrease in accounts payable (D) Purchase of a building financed entirely by a mortgage All of the following are true regarding a seller's rights to reduce legal liability in the sale of non-consumer goods EXCEPT: (A) The seller can disclaim consequential damages if it is done clearly and conspicuously. (B) The seller can limit the remedy available to the buyer if he or she does so clearly and fairly. (C) The seller can place reasonable conditions on the warranty coverage and a shorter time limit of warranty coverage. (D) The seller can disclaim all implied warranties by simply stating that there are no implied warranties. Which of the following should be shown net of tax on a corporation's income statement? (A) Discontinued operations (B) Operating income (C) Gross profit (D) Gain on sale of delivery truck Net income $100,000;Depreciation expense $10,000;Net increase in accounts: receivable $5,000;Net increase in accounts: payable $3,000;On the basis of the information provided in the table above for a corporation, the corporation's net cash flow from operating activities for the current year is: (A) $98,000 (B) $102,000 (C) $108,000 (D) $118,0008 Littleton, Inc., has fixed costs of $75,000 per month, variable costs of $5 per unit, and a sales price per unit of $30. What is the break-even quantity per month? (A) 2,143 (B) 2,500 (C) 3,000 (D) 15,000 Web 2.0 is best represented by which of the following phenomena? (A) Social networking sites (B) Word processing (C) Internet browsers (D) Text messaging are the business documents that companies use to report the results of activities to various external user groups. - {correct Answer}:- Financial Statements is an information system. It measures business activities, processes date into reports (including financial statements) and communicates results to decision makers. Accounting is the "language of business" ccounting Provides information for decision makers outside the entity. Investors Creditors Government agencies And the public - {correct Answer}:- Financial Accounting Provides information for internal users, management - {correct Answer}:- Managerial Accounting is a single owner. - {correct Answer}:- proprietorship Two or more parties are co-owners and each owner is a partner. - {correct Answer}:- Partnership One in which the business (not the owner) is liable for the company's debt. - {correct Answer}:- Limited Liability Company (LLC) Is a business owner by stockholder or shareholders who own stock (common or preferred) representing shares of ownership in that corporation. orporation GAAP - {correct Answer}:- Generally Accepted Accounting Principles FASB - {correct Answer}:- Financial Accounting Standards Board IASB - {correct Answer}:- International accounting Standards Board The Accounting Equation ssets = Liabilities + Owners Equity Economic resources that are expected to produce a benefit in the future ssets expected to be converted to cash, sold or consumed during the next 12 months or business operations cycle. Whichever is longer. urrent assets Outside claims. Debts payable to creditors - {correct Answer}:- Liabilities Insider claims. - {correct Answer}:- Owners' Equity or Shareholders Equity Revenues minus expenses to equal Net Income. - Shows What a company did with it's Net Income. Retained Earnings is the portion of net income that has been kept by t he company - Assets, Liabilities And Stockholders Equity Or the accounting equation - reports three types of activities: Operating, investing, and financing. - Cash flows from selling goods and providing services to customers Cash flows from the purchase and sale of long-term assets - Borrowing and repayment of borrowed funds Equity transactions, such as issuing stock, paying dividends, and repurchase of company stock - are the company's debts that are due within one year or the company's operating cycle, whichever is longer. urrent Liabilities a group of accounts. All the accounts of a business grouped together form a book called the ledger (or general ledger). - is a listing, in general ledger order (assets, liabilities, then stockholders' equity), of the debit or credit balance in each account. -