ETS MFT MBA Final Practice Questions and Answers
Graded A+
In capital budgeting, the Net Present Value (NPV) rule suggests accepting a project if:
A. NPV < 0
B. NPV = 0
C. NPV > 0
D. IRR < cost of capital
Which financial statement shows a company’s assets, liabilities, and equity at a specific
point in time?
A. Income Statement
B. Balance Sheet
C. Statement of Cash Flows
D. Retained Earnings Statement
In Porter’s Five Forces model, the threat of substitutes refers to:
A. Rivalry among existing competitors
B. Bargaining power of suppliers
C. Availability of alternative products
D. Entry of new competitors
The weighted average cost of capital (WACC) is best described as:
A. The cost of equity only
B. The cost of debt only
C. The average return required by all investors
D. The risk-free rate plus market premium
Which inventory method assumes the earliest goods purchased are the first to be sold?
A. LIFO
B. FIFO
C. Weighted Average
D. Specific Identification
A company’s break-even point increases when:
A. Fixed costs decrease
B. Variable costs decrease
C. Sales price increases
D. Fixed costs increase
In organizational behavior, Herzberg’s Two-Factor Theory distinguishes between:
A. Motivation and hygiene factors
B. Equity and expectancy
C. Maslow’s hierarchy levels
D. Intrinsic and extrinsic rewards
,The efficient market hypothesis (EMH) suggests:
A. Investors can consistently beat the market using technical analysis
B. Stock prices reflect all available information
C. Insider trading has no effect on prices
D. Markets are always irrational
Which of the following is a liquidity ratio?
A. Debt-to-equity ratio
B. Current ratio
C. Return on assets
D. Profit margin
In project management, the critical path is:
A. The shortest path through the network
B. The path with the least slack
C. The path with the most resources
D. The path with the highest cost
The DuPont analysis decomposes Return on Equity (ROE) into:
A. Profit margin × Asset turnover × Equity multiplier
B. Net income ÷ Total assets
C. Debt ratio × Interest coverage × Tax rate
D. Current ratio × Quick ratio × Cash ratio
Which of the following is a primary activity in Porter’s Value Chain?
A. Human resource management
B. Procurement
C. Operations
D. Firm infrastructure
The law of diminishing returns states that:
A. Adding more inputs always increases output proportionally
B. Beyond a certain point, additional inputs yield smaller increases in output
C. Marginal cost always decreases with more production
D. Firms can expand indefinitely without efficiency loss
Which leadership style emphasizes high concern for people and high concern for
production?
A. Country Club Management
B. Authority-Compliance Management
C. Team Management
D. Middle-of-the-Road Management
The primary purpose of diversification in portfolio management is:
A. To maximize returns
, B. To eliminate all risk
C. To reduce unsystematic risk
D. To increase systematic risk
Which of the following is NOT a component of GDP using the expenditure approach?
A. Consumption
B. Investment
C. Government spending
D. Net exports
E. Transfer payments
The payback period method of investment appraisal focuses on:
A. Time to recover initial investment
B. Net present value of cash flows
C. Internal rate of return
D. Profitability index
A company issues bonds at a discount. This means:
A. Coupon rate > Market rate
B. Coupon rate < Market rate
C. Coupon rate = Market rate
D. Bonds are risk-free
Which of the following is a qualitative forecasting method?
A. Regression analysis
B. Delphi method
C. Time-series analysis
D. Moving averages
In marketing, the “place” element of the 4Ps refers to:
A. Distribution channels
B. Pricing strategy
C. Product features
D. Promotional campaigns
The principal-agent problem arises when:
A. Managers act in shareholders’ best interests
B. Shareholders and managers have aligned incentives
C. Managers pursue personal goals over shareholder wealth
D. Agents have more information than principals
Which of the following is a liquidity measure?
A. Return on equity
B. Current ratio
C. Debt-to-equity ratio
D. Net profit margin
Graded A+
In capital budgeting, the Net Present Value (NPV) rule suggests accepting a project if:
A. NPV < 0
B. NPV = 0
C. NPV > 0
D. IRR < cost of capital
Which financial statement shows a company’s assets, liabilities, and equity at a specific
point in time?
A. Income Statement
B. Balance Sheet
C. Statement of Cash Flows
D. Retained Earnings Statement
In Porter’s Five Forces model, the threat of substitutes refers to:
A. Rivalry among existing competitors
B. Bargaining power of suppliers
C. Availability of alternative products
D. Entry of new competitors
The weighted average cost of capital (WACC) is best described as:
A. The cost of equity only
B. The cost of debt only
C. The average return required by all investors
D. The risk-free rate plus market premium
Which inventory method assumes the earliest goods purchased are the first to be sold?
A. LIFO
B. FIFO
C. Weighted Average
D. Specific Identification
A company’s break-even point increases when:
A. Fixed costs decrease
B. Variable costs decrease
C. Sales price increases
D. Fixed costs increase
In organizational behavior, Herzberg’s Two-Factor Theory distinguishes between:
A. Motivation and hygiene factors
B. Equity and expectancy
C. Maslow’s hierarchy levels
D. Intrinsic and extrinsic rewards
,The efficient market hypothesis (EMH) suggests:
A. Investors can consistently beat the market using technical analysis
B. Stock prices reflect all available information
C. Insider trading has no effect on prices
D. Markets are always irrational
Which of the following is a liquidity ratio?
A. Debt-to-equity ratio
B. Current ratio
C. Return on assets
D. Profit margin
In project management, the critical path is:
A. The shortest path through the network
B. The path with the least slack
C. The path with the most resources
D. The path with the highest cost
The DuPont analysis decomposes Return on Equity (ROE) into:
A. Profit margin × Asset turnover × Equity multiplier
B. Net income ÷ Total assets
C. Debt ratio × Interest coverage × Tax rate
D. Current ratio × Quick ratio × Cash ratio
Which of the following is a primary activity in Porter’s Value Chain?
A. Human resource management
B. Procurement
C. Operations
D. Firm infrastructure
The law of diminishing returns states that:
A. Adding more inputs always increases output proportionally
B. Beyond a certain point, additional inputs yield smaller increases in output
C. Marginal cost always decreases with more production
D. Firms can expand indefinitely without efficiency loss
Which leadership style emphasizes high concern for people and high concern for
production?
A. Country Club Management
B. Authority-Compliance Management
C. Team Management
D. Middle-of-the-Road Management
The primary purpose of diversification in portfolio management is:
A. To maximize returns
, B. To eliminate all risk
C. To reduce unsystematic risk
D. To increase systematic risk
Which of the following is NOT a component of GDP using the expenditure approach?
A. Consumption
B. Investment
C. Government spending
D. Net exports
E. Transfer payments
The payback period method of investment appraisal focuses on:
A. Time to recover initial investment
B. Net present value of cash flows
C. Internal rate of return
D. Profitability index
A company issues bonds at a discount. This means:
A. Coupon rate > Market rate
B. Coupon rate < Market rate
C. Coupon rate = Market rate
D. Bonds are risk-free
Which of the following is a qualitative forecasting method?
A. Regression analysis
B. Delphi method
C. Time-series analysis
D. Moving averages
In marketing, the “place” element of the 4Ps refers to:
A. Distribution channels
B. Pricing strategy
C. Product features
D. Promotional campaigns
The principal-agent problem arises when:
A. Managers act in shareholders’ best interests
B. Shareholders and managers have aligned incentives
C. Managers pursue personal goals over shareholder wealth
D. Agents have more information than principals
Which of the following is a liquidity measure?
A. Return on equity
B. Current ratio
C. Debt-to-equity ratio
D. Net profit margin
