Major Field Test (Business) SAMPLE TEST

In marketing research, a firm might consider using secondary data over primary data because - ANSWER secondary data usually cost less The term "net working capital" refers to - ANSWER current assets less short-term liabilities In organizational decision making, managers are able to exercise the greatest degree of discretion in the - ANSWER enforcement of internal policies 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/hr. Fixed supervisory costs are $2,000/month and Dreamland rents its factory on a five-year lease for $4,000/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? - ANSWER 700 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/hr. Fixed supervisory costs are $2,000/month and Dreamland rents its factory on a five-year lease for $4,000/month. All costs are considered costs of production. Another firm has offered to produce "Old Softy" pillows 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? - ANSWER 625 Which of the following statements about the tort of negligence is true? - ANSWER it requires proof of breach of a statutory or common-law duty Which of the following statements about a systems flowchart is true? - ANSWER it documents the sequence of processing steps that take place in an information system 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 customers $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? - ANSWER $5,080 Within the context of the CAPM, the risk measure known as beta is often computed by regressing the return of the company's stock against the - ANSWER return on the market portfolio 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 - ANSWER either Job J or Job K The Organization of the Petroleum Exporting Countries (OPEC) reduces production by 10% 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? - ANSWER price will increase, but quantity is indeterminate Which of the following would most likely occur as a result of the US govt imposing tariffs on foreign steel imports? - ANSWER employment in the US steel industry would increase In an economy the unemployment rate is 10% and the inflation rate is 1%. An appropriate fiscal policy in this phase of the business cycle would be to - ANSWER increase govt spending Which of the following is an appropriate Fed Reserve action to stimulate the US economy? - 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 - ANSWER interest-rate parity 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/ - ANSWER liquidity In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory and the lowest net income figure? - ANSWER last in, first out (LIFO) In the statement of cash flows, the section for CF from operating activities will include which of the following? - ANSWER a decrease in accounts payable Net Income = $100,000 Depreciation Expense = $10,000 Net increase in A/R = $5,000 Net increase in A/P = $3,000 T