SPMT 260 Exam 2 (Hudson) with complete
solutions 2025
Sales .vs. .Added .Value .- .CORRECT .ANSWERS-- .There .is .a .difference .between
.an .industry's .sales .and .its .value-added
- .Value-added .is .a .more .accurate .statistic
-Cost .of .raw .materials .and .manufacturing .are .considered .when .calculating
.value-added
What .is .Finance .- .CORRECT .ANSWERS-- .No .single, .universally .agreed-upon
.definition
- .Generally .refers .to .two .primary .activities .and .organizations
1. .How .an .organization .generates .the .funds .that .flow .into .that .organization
2. .How .these .funds .are .allocated .and .spent .once .they .are .in .the .organization
.- .CORRECT .ANSWERS-Funds .raised .by .an .organization .through .a .variety .of
.sources .including .tickets, .merchandise, .services, .and .sponsorships
Expenses .- .CORRECT .ANSWERS-Funds .spent .to .operate .and .organization
.such .as .salaries, .equipment, .utilities, .food, .travel .and .insurance
Profit .- .CORRECT .ANSWERS-- .more .revenues .than .expenses
- .Can .be .enhanced .by .increasing .revenues, .decreasing .costs, .or .both
Income .statement .- .CORRECT .ANSWERS-Summarizes .an .organizations
.revenues, .expenses, .and .profits .over .a .given .period .of .time
Assets .- .CORRECT .ANSWERS-Anything .an .organization .owns .that .can .be .used
.to .generate .future .revenues .(facility, .equipment)
, Teams .can .fund .or .finance .assets .in .many .ways .- .CORRECT .ANSWERS--
.Owners .Equity
- .Debt
- .Franchise .ownership .groups
- .Coporate .conglamarents
- .Publicly .traded .sport .companies
Owners .Equity .- .CORRECT .ANSWERS-The .amount .of .their .own .money .owners
.have .invested .in .the .firm
Debt .- .CORRECT .ANSWERS-- .The .amount .of .money .an .organization .borrows
.from .banks .or .other .lenders .in .the .market
- .Organization .is .legally .obligated .to .pay .back .the .original .amount .borrowed
.(principal) .plus .interest
Bonds .- .CORRECT .ANSWERS-- .Financial .instruments .that .allow .the .borrower
.to .both .borrow .large .dollar .amounts .over .an .extended .period .of .time .(20 .or
.more .years)
- .Issued .by .the .government .and/ .or .corporate .entities
- .Often .used .to .fund .stadium .construction
Credit .- .CORRECT .ANSWERS-- .Some .professional .leagues .maintain ."Credit
.facilities" .(loan .pools) .backed .by .league .revenues
- .Individual .teams .can .borrow .from .the .loan .pools .at .better .interest .rates
- .NFL .debt .has .highest .credit .rating .= .lowest .credit .risk .= .can .borrow .at .the
.lowest .interest .rate
Balance .sheet .- .CORRECT .ANSWERS-A .financial .statement .that .summarizes .an
.organizations .assets, .liabilities, .and .owners .equity .at .any .given .time
Define .return .on .investment .- .CORRECT .ANSWERS-- .The .expected .dollar .value
.return .on .each .alternative .investment, .stated .as .a .percentage .of .the .original
.cost .of .each .investment
- .Example: .ROI .of .9% .= .the .organization .would .recover .all .of .the .initial
.investment .plus .an .additional .9%
Risk .- .CORRECT .ANSWERS-- .Because .the .future .is .uncertain, .the .future
.benefits .of .any .investment .cannot .be .known .with .certainty .at .the .time
.investment .is .made
solutions 2025
Sales .vs. .Added .Value .- .CORRECT .ANSWERS-- .There .is .a .difference .between
.an .industry's .sales .and .its .value-added
- .Value-added .is .a .more .accurate .statistic
-Cost .of .raw .materials .and .manufacturing .are .considered .when .calculating
.value-added
What .is .Finance .- .CORRECT .ANSWERS-- .No .single, .universally .agreed-upon
.definition
- .Generally .refers .to .two .primary .activities .and .organizations
1. .How .an .organization .generates .the .funds .that .flow .into .that .organization
2. .How .these .funds .are .allocated .and .spent .once .they .are .in .the .organization
.- .CORRECT .ANSWERS-Funds .raised .by .an .organization .through .a .variety .of
.sources .including .tickets, .merchandise, .services, .and .sponsorships
Expenses .- .CORRECT .ANSWERS-Funds .spent .to .operate .and .organization
.such .as .salaries, .equipment, .utilities, .food, .travel .and .insurance
Profit .- .CORRECT .ANSWERS-- .more .revenues .than .expenses
- .Can .be .enhanced .by .increasing .revenues, .decreasing .costs, .or .both
Income .statement .- .CORRECT .ANSWERS-Summarizes .an .organizations
.revenues, .expenses, .and .profits .over .a .given .period .of .time
Assets .- .CORRECT .ANSWERS-Anything .an .organization .owns .that .can .be .used
.to .generate .future .revenues .(facility, .equipment)
, Teams .can .fund .or .finance .assets .in .many .ways .- .CORRECT .ANSWERS--
.Owners .Equity
- .Debt
- .Franchise .ownership .groups
- .Coporate .conglamarents
- .Publicly .traded .sport .companies
Owners .Equity .- .CORRECT .ANSWERS-The .amount .of .their .own .money .owners
.have .invested .in .the .firm
Debt .- .CORRECT .ANSWERS-- .The .amount .of .money .an .organization .borrows
.from .banks .or .other .lenders .in .the .market
- .Organization .is .legally .obligated .to .pay .back .the .original .amount .borrowed
.(principal) .plus .interest
Bonds .- .CORRECT .ANSWERS-- .Financial .instruments .that .allow .the .borrower
.to .both .borrow .large .dollar .amounts .over .an .extended .period .of .time .(20 .or
.more .years)
- .Issued .by .the .government .and/ .or .corporate .entities
- .Often .used .to .fund .stadium .construction
Credit .- .CORRECT .ANSWERS-- .Some .professional .leagues .maintain ."Credit
.facilities" .(loan .pools) .backed .by .league .revenues
- .Individual .teams .can .borrow .from .the .loan .pools .at .better .interest .rates
- .NFL .debt .has .highest .credit .rating .= .lowest .credit .risk .= .can .borrow .at .the
.lowest .interest .rate
Balance .sheet .- .CORRECT .ANSWERS-A .financial .statement .that .summarizes .an
.organizations .assets, .liabilities, .and .owners .equity .at .any .given .time
Define .return .on .investment .- .CORRECT .ANSWERS-- .The .expected .dollar .value
.return .on .each .alternative .investment, .stated .as .a .percentage .of .the .original
.cost .of .each .investment
- .Example: .ROI .of .9% .= .the .organization .would .recover .all .of .the .initial
.investment .plus .an .additional .9%
Risk .- .CORRECT .ANSWERS-- .Because .the .future .is .uncertain, .the .future
.benefits .of .any .investment .cannot .be .known .with .certainty .at .the .time
.investment .is .made
