MBA EXIT EXAM STUDY GUIDE
ABC analysis - Answer -inventory control system that divides the inventory into three
classes: A, B, and C, depending on the value and importance of the item
accelerated depreciation method - Answer -allows asset own to take greater amounts
of depreciation during early years of asset's life, defers some of the taxes until later
years
acceptable quality level (AQL) - Answer -quality standard that allows for a prespecified
number of defects
acceptance - Answer -an assent to an offer in accordance with its terms
accounting exposure - Answer -variability in the firm's reported values for NI and net
worth that results from changes in exchange rates
accounting rate of return - Answer -capital-budgeting criterion that relates the returns
generated by the project, as measured by average accounting profits AFTER tax, to avg
dollar size of the investment required; AKA simple ROR or unadjusted ROR
accounts receivable turnover - Answer -annual credit sales/ avg A/R
acid test ratio - Answer -(CA-inv)/CL. more stringent measure of liquidity than current
ratio. AKA quick ratio
activity-based costing (ABC) - Answer -system that accumulates costs on the basis of
production or service activities at a firm. Assigns costs by activity and links them to
specific products
Activity-based management (ABM) - Answer -system-wide, integrated approach that
focuses mgmt's attn on activities with the objectives of improving customer value and
the profit achieved by providing this value. ABC is major source of info for this
advertising - Answer -any paid form of non personal communication designed to gain
acceptance of the advertiser's message
advertising research - Answer -carried on as an aid or support function to the
advertising manager
after-tax cash flow - Answer -the net cash flow (cash rev- cash exp) after taxes have
been subtracted. CF generated from operations
agency relationship - Answer -consensual arrangement between 2 persons whereby
one agrees to act for the benefit of and under control of the other person
,aggregate production planning - Answer -establishment of aggregate production and
inventory levels over a medium range time horizon
american terms - Answer -method of exchange-rate quotation that gives the value of a
foreign currency in USD
amortized loan - Answer -loan that's paid off in periodic equal installments and includes
varying portions of principal and interest during its term
analysis of variances (variance analysis) - Answer -analysis and investigation of causes
for variances between std costs and actual costs. variance favorable if actual costs <
std costs. unfavorable if actual costs > std costs. need to investigate unfavorable
variances further to determine causes, so corrective action can be taken
annual report - Answer -audited document issued annually by all publicly listed
corporations to their SH in accordance with SEC regulations. contains info on financial
results and overall performance of the previous fiscal year and comments on future
outlook
application program - Answer -computer software written specifically to process data in
an IS. Performs tasks and solves problems applicable to a manager's work
appreciation - Answer -increase in value of one currency in terms of another currency.
when dollar appreciates, can be exchanged for greater amounts of foreign currencies
arbitrage-pricing model (APM) - Answer -theory that relates stock returns and risk.
maintains that security returns vary from their expected amounts when there are
unanticipated changes in basic economic forces (unexpected changes in industrial
production, inflation rates, terms structure of interest rates, and diff between interest
rates of high and low risk bonds)
area sampling - Answer -may be used for market research when population lists are
not available. blocks selected at random and residents are interviewed either in total or
randomly (part of market research
artificial intelligence (AI) - Answer -thinking and reasoning software based on info
inputted into it by a human expert. reasoning process involves self-correction. significant
data are evaluated and relevant relationships uncovered. computer learns which kind of
answers are reasonable and which are not. AI performs complicated strategies that
determine the best or worst way to accomplish a task or avoid and undesirable result.
Ex of applications: tax planning, capital budgeting analysis
assembly chart - Answer -graphical method for visualizing how the various parts and
subassemblies flow into the assembly process
,asset turnover - Answer -sales/assets. measure of efficiency of asset management
assignable causes - Answer -causes of poor quality that are due to problems with
materials, machines, or operators and that can be remedied
assignment problem - Answer -problem of determining how the assignments should be
made in order to minimize total costs
attribute mapping - Answer -technique for IDing new products by mapping product-line
attributes; searching for "attribute space" or possible new attribute combos for new
products
B2B (business-to-business) e-commerce - Answer -using B2B trading networks,
auction sites, spot exchanges, online product catalogs, barter sites, and other online
resources to reach new customers, serve current customers more effectively, and
obtain buying efficiencies and better prices
B2C (business-to-consumers) e-commerce - Answer -online selling of goods and
services to final customers
baby boomers - Answer -78 million ppl born during baby boom, WWII-early 1960s
bailment - Answer -exists when possession of property belonging to one person is
delivered to another person who intends to assume custody or control over the property
and who expressly or implicitly promises to return it to the owner or dispose of it as
directed by the owner
bait-and-switch advertising - Answer -technique by which a g/s is advertised at a low
price with intention of attracting customers, then switching them over to higher-priced
items. seller may have no intention of selling "bait item" cust is often told bait item is out
of stock or inferior
balance of payments - Answer -relationship between monies received from exports and
monies paid out for imports
balance of trade - Answer -unit of the balance of payments that reflects the value of all
goods imported and exported by any nation
balanced scorecard - Answer -approach using multiple measures to evaluate
managerial performance. measures may be financial or nonfinancial, internal or
external, and ST or LT. scorecard allows determination as to whether manager is
achieving certain objectives at the expense of others that may be equally or more
important
, bankruptcy - Answer -a legal procedure through which the ownership of a firm's assets
is transferred to debt holders. inability to pay debts when due. a business is insolvent in
a legal sense when its financial condition is so bad that total liabilities > FMV of assets
baud - Answer -serial info transfer speed with which a modem receives and sends data
benchmarking - Answer -searching for new and better procedures by comparing your
own procedures to that of the very best
beta (coefficient) - Answer -measure of risk based on the sensitivity of an individual
stock's returns to changes in the returns of a broad stock market index; AKA systematic,
market, undiversifiable, and relative risk. Beta < 1: co's stock is less risky than the
market
better business bureaus (BBB) - Answer -local business-supported organizations that
maintain records on local business firms and provide info to concerned customers. local
bureaus are part of a loosely tied national system
bill of materials (BOM) - Answer -structured parts list that shows the manner in which
the product is actually put together
block diagram - Answer -diagram using symbols to explain the interconnections and
info flow between hardware and software
bond rating - Answer -ratings assigned by an agency (such as S7P or Moody's
Investors Service) that provides assessment of bond's credit risk
book value - Answer -depreciated value of a co's assets (OG cost - AD) less O/S
liabilities
brainstorming - Answer -technique involving group of people who meet to voice any
idea that comes to mind concerning a particular subject in the hopes of generating new
ideas
brand - Answer -a name term, sign, symbol, or design, or combo of them intended to
distinguish products of one seller from competitors
brand loyalty - Answer -strength of buyer preference for a particular g/s, usually
resulting in repeat buying
brand name - Answer -has narrower meaning than brand. the word, letter, or group
thereof that can be spoken
break-even analysis - Answer -branch of cost-volume-profit (CVP) anal that determines
the break-even sales, which is level of sales where TC = total rev. at BE point, no profit
or loss
ABC analysis - Answer -inventory control system that divides the inventory into three
classes: A, B, and C, depending on the value and importance of the item
accelerated depreciation method - Answer -allows asset own to take greater amounts
of depreciation during early years of asset's life, defers some of the taxes until later
years
acceptable quality level (AQL) - Answer -quality standard that allows for a prespecified
number of defects
acceptance - Answer -an assent to an offer in accordance with its terms
accounting exposure - Answer -variability in the firm's reported values for NI and net
worth that results from changes in exchange rates
accounting rate of return - Answer -capital-budgeting criterion that relates the returns
generated by the project, as measured by average accounting profits AFTER tax, to avg
dollar size of the investment required; AKA simple ROR or unadjusted ROR
accounts receivable turnover - Answer -annual credit sales/ avg A/R
acid test ratio - Answer -(CA-inv)/CL. more stringent measure of liquidity than current
ratio. AKA quick ratio
activity-based costing (ABC) - Answer -system that accumulates costs on the basis of
production or service activities at a firm. Assigns costs by activity and links them to
specific products
Activity-based management (ABM) - Answer -system-wide, integrated approach that
focuses mgmt's attn on activities with the objectives of improving customer value and
the profit achieved by providing this value. ABC is major source of info for this
advertising - Answer -any paid form of non personal communication designed to gain
acceptance of the advertiser's message
advertising research - Answer -carried on as an aid or support function to the
advertising manager
after-tax cash flow - Answer -the net cash flow (cash rev- cash exp) after taxes have
been subtracted. CF generated from operations
agency relationship - Answer -consensual arrangement between 2 persons whereby
one agrees to act for the benefit of and under control of the other person
,aggregate production planning - Answer -establishment of aggregate production and
inventory levels over a medium range time horizon
american terms - Answer -method of exchange-rate quotation that gives the value of a
foreign currency in USD
amortized loan - Answer -loan that's paid off in periodic equal installments and includes
varying portions of principal and interest during its term
analysis of variances (variance analysis) - Answer -analysis and investigation of causes
for variances between std costs and actual costs. variance favorable if actual costs <
std costs. unfavorable if actual costs > std costs. need to investigate unfavorable
variances further to determine causes, so corrective action can be taken
annual report - Answer -audited document issued annually by all publicly listed
corporations to their SH in accordance with SEC regulations. contains info on financial
results and overall performance of the previous fiscal year and comments on future
outlook
application program - Answer -computer software written specifically to process data in
an IS. Performs tasks and solves problems applicable to a manager's work
appreciation - Answer -increase in value of one currency in terms of another currency.
when dollar appreciates, can be exchanged for greater amounts of foreign currencies
arbitrage-pricing model (APM) - Answer -theory that relates stock returns and risk.
maintains that security returns vary from their expected amounts when there are
unanticipated changes in basic economic forces (unexpected changes in industrial
production, inflation rates, terms structure of interest rates, and diff between interest
rates of high and low risk bonds)
area sampling - Answer -may be used for market research when population lists are
not available. blocks selected at random and residents are interviewed either in total or
randomly (part of market research
artificial intelligence (AI) - Answer -thinking and reasoning software based on info
inputted into it by a human expert. reasoning process involves self-correction. significant
data are evaluated and relevant relationships uncovered. computer learns which kind of
answers are reasonable and which are not. AI performs complicated strategies that
determine the best or worst way to accomplish a task or avoid and undesirable result.
Ex of applications: tax planning, capital budgeting analysis
assembly chart - Answer -graphical method for visualizing how the various parts and
subassemblies flow into the assembly process
,asset turnover - Answer -sales/assets. measure of efficiency of asset management
assignable causes - Answer -causes of poor quality that are due to problems with
materials, machines, or operators and that can be remedied
assignment problem - Answer -problem of determining how the assignments should be
made in order to minimize total costs
attribute mapping - Answer -technique for IDing new products by mapping product-line
attributes; searching for "attribute space" or possible new attribute combos for new
products
B2B (business-to-business) e-commerce - Answer -using B2B trading networks,
auction sites, spot exchanges, online product catalogs, barter sites, and other online
resources to reach new customers, serve current customers more effectively, and
obtain buying efficiencies and better prices
B2C (business-to-consumers) e-commerce - Answer -online selling of goods and
services to final customers
baby boomers - Answer -78 million ppl born during baby boom, WWII-early 1960s
bailment - Answer -exists when possession of property belonging to one person is
delivered to another person who intends to assume custody or control over the property
and who expressly or implicitly promises to return it to the owner or dispose of it as
directed by the owner
bait-and-switch advertising - Answer -technique by which a g/s is advertised at a low
price with intention of attracting customers, then switching them over to higher-priced
items. seller may have no intention of selling "bait item" cust is often told bait item is out
of stock or inferior
balance of payments - Answer -relationship between monies received from exports and
monies paid out for imports
balance of trade - Answer -unit of the balance of payments that reflects the value of all
goods imported and exported by any nation
balanced scorecard - Answer -approach using multiple measures to evaluate
managerial performance. measures may be financial or nonfinancial, internal or
external, and ST or LT. scorecard allows determination as to whether manager is
achieving certain objectives at the expense of others that may be equally or more
important
, bankruptcy - Answer -a legal procedure through which the ownership of a firm's assets
is transferred to debt holders. inability to pay debts when due. a business is insolvent in
a legal sense when its financial condition is so bad that total liabilities > FMV of assets
baud - Answer -serial info transfer speed with which a modem receives and sends data
benchmarking - Answer -searching for new and better procedures by comparing your
own procedures to that of the very best
beta (coefficient) - Answer -measure of risk based on the sensitivity of an individual
stock's returns to changes in the returns of a broad stock market index; AKA systematic,
market, undiversifiable, and relative risk. Beta < 1: co's stock is less risky than the
market
better business bureaus (BBB) - Answer -local business-supported organizations that
maintain records on local business firms and provide info to concerned customers. local
bureaus are part of a loosely tied national system
bill of materials (BOM) - Answer -structured parts list that shows the manner in which
the product is actually put together
block diagram - Answer -diagram using symbols to explain the interconnections and
info flow between hardware and software
bond rating - Answer -ratings assigned by an agency (such as S7P or Moody's
Investors Service) that provides assessment of bond's credit risk
book value - Answer -depreciated value of a co's assets (OG cost - AD) less O/S
liabilities
brainstorming - Answer -technique involving group of people who meet to voice any
idea that comes to mind concerning a particular subject in the hopes of generating new
ideas
brand - Answer -a name term, sign, symbol, or design, or combo of them intended to
distinguish products of one seller from competitors
brand loyalty - Answer -strength of buyer preference for a particular g/s, usually
resulting in repeat buying
brand name - Answer -has narrower meaning than brand. the word, letter, or group
thereof that can be spoken
break-even analysis - Answer -branch of cost-volume-profit (CVP) anal that determines
the break-even sales, which is level of sales where TC = total rev. at BE point, no profit
or loss
