MGMT 4810 Final
Exam
- WITH EXPECTED
QUESTIONS AND
SOLUTIONS 2024
,A fair price:
a. is based on market conditions, and cost structure has no bearing on the
determination of a fair price.
b. is the lowest price that ensures a continuous supply of the proper quality where and
when needed and at which the supplier makes a reasonable profit.
c. is based on the cost to produce an item or service without consideration for the
supplier's profit margin.
d. is an amount arrived at through negotiations where the seller's price is a starting
point..
e. is when all sellers of equal goods or services receive the same per unit price. -
CORRECT ANSWERS-b. is the lowest price that ensures a continuous supply of the
proper quality where and when needed and at which the supplier makes a reasonable
profit.
A cash discount allows:
a. the seller to secure prompt payment, but has no benefits for the buyer.
b. the buyer to pay a lower price per unit, but has no benefits for the seller.
c. the seller to secure prompt payment, and the buyer to pay a lower price per unit.
d. the seller to demand payment in cash on demand (C.O.D.) upon receipt of goods.
e. the buyer to always calculate the discount based on the delivery date. - CORRECT
ANSWERS-c. the seller to secure prompt payment, and the buyer to pay a lower price
per unit.
In the event the bidder does not make proper payment to its suppliers, the bond that
protects the buyer against liens that might be granted to these suppliers, is called a:
a. performance bond.
b. surety bond.
c. bid bond
, d. payment bond.
e. lien bond. - CORRECT ANSWERS-d. payment bond.
A cash discount of 2/10, N/30 (2 percent cash discount if payment is made in 10 days,
with the gross amount due in 30 days) is the equivalent of approximately a 36 percent
interest rate. - CORRECT ANSWERS-True
Governments play a role in establishing prices by establishing production and import
quotas and by regulating the ways that buyers and sellers are allowed to behave in
agreeing on prices. - CORRECT ANSWERS-True
To be fair, the basis and terms of cancellation should be agreed on in advance and
made part of the terms and conditions of the purchase order. - CORRECT ANSWERS-
True
Competitive bidding, in general, is the least efficient means of obtaining a fair price for
items bought. - CORRECT ANSWERS-False
Online reverse auctions are useful means of price determination for special items. -
CORRECT ANSWERS-False
For goods bought on a non-recurring basis, the contract may provide for a reduction in
price should the buyer ever again purchase the item. - CORRECT ANSWERS-False
Canceling a contract for a technicality when market prices are falling is considered a
perfectly acceptable and ethical practice. - CORRECT ANSWERS-False
An escalator clause provides for an increase, as well as a decrease, in price if costs
change. - CORRECT ANSWERS-True
Exam
- WITH EXPECTED
QUESTIONS AND
SOLUTIONS 2024
,A fair price:
a. is based on market conditions, and cost structure has no bearing on the
determination of a fair price.
b. is the lowest price that ensures a continuous supply of the proper quality where and
when needed and at which the supplier makes a reasonable profit.
c. is based on the cost to produce an item or service without consideration for the
supplier's profit margin.
d. is an amount arrived at through negotiations where the seller's price is a starting
point..
e. is when all sellers of equal goods or services receive the same per unit price. -
CORRECT ANSWERS-b. is the lowest price that ensures a continuous supply of the
proper quality where and when needed and at which the supplier makes a reasonable
profit.
A cash discount allows:
a. the seller to secure prompt payment, but has no benefits for the buyer.
b. the buyer to pay a lower price per unit, but has no benefits for the seller.
c. the seller to secure prompt payment, and the buyer to pay a lower price per unit.
d. the seller to demand payment in cash on demand (C.O.D.) upon receipt of goods.
e. the buyer to always calculate the discount based on the delivery date. - CORRECT
ANSWERS-c. the seller to secure prompt payment, and the buyer to pay a lower price
per unit.
In the event the bidder does not make proper payment to its suppliers, the bond that
protects the buyer against liens that might be granted to these suppliers, is called a:
a. performance bond.
b. surety bond.
c. bid bond
, d. payment bond.
e. lien bond. - CORRECT ANSWERS-d. payment bond.
A cash discount of 2/10, N/30 (2 percent cash discount if payment is made in 10 days,
with the gross amount due in 30 days) is the equivalent of approximately a 36 percent
interest rate. - CORRECT ANSWERS-True
Governments play a role in establishing prices by establishing production and import
quotas and by regulating the ways that buyers and sellers are allowed to behave in
agreeing on prices. - CORRECT ANSWERS-True
To be fair, the basis and terms of cancellation should be agreed on in advance and
made part of the terms and conditions of the purchase order. - CORRECT ANSWERS-
True
Competitive bidding, in general, is the least efficient means of obtaining a fair price for
items bought. - CORRECT ANSWERS-False
Online reverse auctions are useful means of price determination for special items. -
CORRECT ANSWERS-False
For goods bought on a non-recurring basis, the contract may provide for a reduction in
price should the buyer ever again purchase the item. - CORRECT ANSWERS-False
Canceling a contract for a technicality when market prices are falling is considered a
perfectly acceptable and ethical practice. - CORRECT ANSWERS-False
An escalator clause provides for an increase, as well as a decrease, in price if costs
change. - CORRECT ANSWERS-True
