SPMA 3P27 Final Exam
What are some reasons we do M&A? - ✔✔ANSWER✔✔>>Synergy with existing
business (value combined is better than alone)
Desire for growth
External factors
Geographic position
Shareholder demands
What are the three M&A Classifications? - ✔✔ANSWER✔✔>>Horizontal, Vertical,
Conglomerate
What are examples of M&A? - ✔✔ANSWER✔✔>>Google bought Fitbit, WWE
purchased UFC, Bass Pro Shops bought Cabelas
What is M&A? - ✔✔ANSWER✔✔>>The assets of two companies are brought together
for one company - one of the two original companies or a newly formed company
What is a vertical classification? - ✔✔ANSWER✔✔>>When one firm acquires another
in the supply chain
Ex. Nike acquired rubber band company for shoe product
What is a horizontal classification? - ✔✔ANSWER✔✔>>When two firms in the same
industry are combined Ex. Adidas and Reebok
What is a conglomerate classification? - ✔✔ANSWER✔✔>>When two firms in
unrelated business combine
Ex. Ontario teachers pension had majority share in MLSE
What are Porter's Five Forces? - ✔✔ANSWER✔✔>>1. Buyer Power
2. Supplier Power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
When is intensity greatest? - ✔✔ANSWER✔✔>>Competitors are similar in size
Growth is slow
Exit barriers are high
Highly committed to the business and have high aspirations for leadership in the
industry
, Firms can't read each other's signals well
Which option do you choose when dealing with multiple products in M&A -
✔✔ANSWER✔✔>>Option with highest contribution rate
What is the cost-volume-profit (CVP) analysis? - ✔✔ANSWER✔✔>>Provides insights
for effective planning, budgeting, and decision making
units sold x selling price per unit - ✔✔ANSWER✔✔>>Sales Budget Formula
(Total # of products produced in the quarter) x (hourly wage x hour per unit) -
✔✔ANSWER✔✔>>Direct Labour Cost Formula
What are the three key uses of a budget - ✔✔ANSWER✔✔>>Forecasting, planning,
controlling
Name three of the advantages of budgeting - ✔✔ANSWER✔✔>>Define goals and
objectives
Think about and formally plan the future
Means of allocating resources
Uncover potential benefits
Serves as benchmark for assessing results
Communicating plans
Cost of investment / by annual net cash inflow or savings
Divided final two digits by 52 to get weeks - ✔✔ANSWER✔✔>>Payback Method
Expenses/units produced - ✔✔ANSWER✔✔>>Minimum Cost Formula
At Ace Corporation, each headband takes 0.05 hours of direct labour
Wage Rate of $15 per hour regardless of the hours worked
No increased rate for overtime pay
The production from the quarter was: April 26,000; May 46,000; June 29,000What is the
total direct labour cost for the quarter? - ✔✔ANSWER✔✔>>75,750
What is the minimum price you'd charge as a company with $10,000 in variable costs,
$12,000 in Fixed Costs, a desire for $5,000 in contingencies (i.e. owner salary),
assuming you produce 600 units per year. - ✔✔ANSWER✔✔>>A) $45.00 B)$27.50
C)$122.50 D)$38.70
What is the MINIMUM price for a sport hat company to charge when producing 8000
units per month with $50,000 Fixed Costs and $6 per unit variable costs? -
✔✔ANSWER✔✔>>A) $1.96 B) $12.25 C) $1.16 D)$13.45
What is the premium or discount the Chicago Bears are selling their tickets at?
What are some reasons we do M&A? - ✔✔ANSWER✔✔>>Synergy with existing
business (value combined is better than alone)
Desire for growth
External factors
Geographic position
Shareholder demands
What are the three M&A Classifications? - ✔✔ANSWER✔✔>>Horizontal, Vertical,
Conglomerate
What are examples of M&A? - ✔✔ANSWER✔✔>>Google bought Fitbit, WWE
purchased UFC, Bass Pro Shops bought Cabelas
What is M&A? - ✔✔ANSWER✔✔>>The assets of two companies are brought together
for one company - one of the two original companies or a newly formed company
What is a vertical classification? - ✔✔ANSWER✔✔>>When one firm acquires another
in the supply chain
Ex. Nike acquired rubber band company for shoe product
What is a horizontal classification? - ✔✔ANSWER✔✔>>When two firms in the same
industry are combined Ex. Adidas and Reebok
What is a conglomerate classification? - ✔✔ANSWER✔✔>>When two firms in
unrelated business combine
Ex. Ontario teachers pension had majority share in MLSE
What are Porter's Five Forces? - ✔✔ANSWER✔✔>>1. Buyer Power
2. Supplier Power
3. Threat of substitute products or services
4. Threat of new entrants
5. Rivalry among existing competitors
When is intensity greatest? - ✔✔ANSWER✔✔>>Competitors are similar in size
Growth is slow
Exit barriers are high
Highly committed to the business and have high aspirations for leadership in the
industry
, Firms can't read each other's signals well
Which option do you choose when dealing with multiple products in M&A -
✔✔ANSWER✔✔>>Option with highest contribution rate
What is the cost-volume-profit (CVP) analysis? - ✔✔ANSWER✔✔>>Provides insights
for effective planning, budgeting, and decision making
units sold x selling price per unit - ✔✔ANSWER✔✔>>Sales Budget Formula
(Total # of products produced in the quarter) x (hourly wage x hour per unit) -
✔✔ANSWER✔✔>>Direct Labour Cost Formula
What are the three key uses of a budget - ✔✔ANSWER✔✔>>Forecasting, planning,
controlling
Name three of the advantages of budgeting - ✔✔ANSWER✔✔>>Define goals and
objectives
Think about and formally plan the future
Means of allocating resources
Uncover potential benefits
Serves as benchmark for assessing results
Communicating plans
Cost of investment / by annual net cash inflow or savings
Divided final two digits by 52 to get weeks - ✔✔ANSWER✔✔>>Payback Method
Expenses/units produced - ✔✔ANSWER✔✔>>Minimum Cost Formula
At Ace Corporation, each headband takes 0.05 hours of direct labour
Wage Rate of $15 per hour regardless of the hours worked
No increased rate for overtime pay
The production from the quarter was: April 26,000; May 46,000; June 29,000What is the
total direct labour cost for the quarter? - ✔✔ANSWER✔✔>>75,750
What is the minimum price you'd charge as a company with $10,000 in variable costs,
$12,000 in Fixed Costs, a desire for $5,000 in contingencies (i.e. owner salary),
assuming you produce 600 units per year. - ✔✔ANSWER✔✔>>A) $45.00 B)$27.50
C)$122.50 D)$38.70
What is the MINIMUM price for a sport hat company to charge when producing 8000
units per month with $50,000 Fixed Costs and $6 per unit variable costs? -
✔✔ANSWER✔✔>>A) $1.96 B) $12.25 C) $1.16 D)$13.45
What is the premium or discount the Chicago Bears are selling their tickets at?
