Professional Documents
Culture Documents
12) The cost principle requires that when assets are acquired, they be
recorded at __________.
A. selling price
B. appraisal value
C. list price
D. exchange price paid
13) Which one of the following items is not generally used in preparing a
statement of cash flows?
A. Current income statement
B. Adjusted trial balance
C. Additional information
D. Comparative balance sheets
14) Managerial accounting __________.
A. pertains to the entity as a whole and is highly aggregated
B. is concerned with costing products
C. places emphasis on special-purpose information
D. is governed by generally accepted accounting principles
15) A logical starting point from which the study of international trade
begins is __________.
A. the principle of absolute advantage
B. the recognition that not all markets are competitive
C. the principle of comparative advantage
D. the recognition that government intervention in markets sometimes enhances
the economic welfare of the society
16) Without trade, __________.
A. a country can still benefit from international specialization
B. a country is better off because it will have to learn to be self-sufficient without
trade
C. interdependence is more extensive than it would be with trade
D. a country's production possibilities frontier is also its consumption
possibilities frontier
17) Assume oligopoly firms are profit maximizers, they do not form a
cartel, and they take other firms' production levels as given. Then in
equilibrium the output effect __________.
A. must balance with the price effect
B. must dominate the price effect
C. must be smaller than the price effect
D. can be larger or smaller than the price effect
18) To move the allocation of resources closer to the social optimum,
policymakers should typically try to induce firms in an oligopoly to
__________.
A. compete rather than cooperate with each other
B. collude with each other
C. form various degrees of cartels
B. Wisdom
C. Management control
D. Expertise
E. Operational control
62) _____ is the efficient and effective execution of specific tasks.
A. Strategic planning
B. Wisdom
C. Management control
D. Expertise
E. Operational control
63) Disadvantages of using current liabilities as opposed to long-term
debt include:
A. higher cash flow exposure
B. certainty of interest costs
C. uncertainty of future liabilities
D. decreased risk of liquidity
E. greater risk of illiquidity, and uncertainty of interest costs
64) Bondholders have a priority claim on assets ahead of:
A. investors
B. common and preferred stockholders.
C. creditors.
D. shareholders.
65) Which of the following best represents operating income?
A. Income from capital gains
B. Income after financing activities
C. Income from discontinued operations
D. Earnings before interest and taxes
66) Which of the following is most consistent with the hedging principle
in working capital management?
A. Fixed assets should be financed with short-term notes payable.
B. Inventory should be financed with preferred stock.
C. Accounts receivable should be financed with short-term lines of
credit.
D. Borrow on a floating rate basis to finance investments in permanent assets.
67) PepsiCo calculates unlevered betas for each peer group in order to:
A. eliminate judgment factors.
B. eliminate different business risks.
C. eliminate different financial risks.
D. eliminate competitive factors.
68) A stock with a beta greater than 1.0 has returns that are _____
volatile than the market, and a stock with a beta of less than 1.0
exhibits returns which are _____ volatile than those of the market
portfolio.
A. less, more
B. more, more
C. less, less
D. more, less
69) The common stockholders are most concerned with:
A. the risk of the investment.
B. the percentage of profits retained.
C. the spread between the return generated on new investments and the
investors required rate of return.
D. the size of the firms beginning earnings per share.
70) An increase in future value can be caused by an increase in the
__________.
A. original amount invested
B. annual interest rate and number of compounding periods
C. dividends paid
D. rate of return
E. starting value
71) A machine costs $1,000, has a three-year life, and has an estimated
salvage value of $100. It will generate after-tax annual cash flows (ACF)
of $600 a year, starting next year. If your required rate of return for the
project is 10%, what is the NPV of this investment? (Round your
answerwer to the nearest $10.)
A. $900
B. $490
C. -$150
D. $570
72) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of
$1.70 per share. If the stock is currently selling for $21.25 per share,
what is the expected rate of return on this stock?
A. 8.0%
B. 36.13%
C. 13.6%
D. 12.5%
73) Exchange rate risk:
A. has been phased out due to recent international legislation.
B. arises from the fact that the spot exchange rate on a future date is a
random variable.
C. applies only to certain types of domestic businesses.
D. doesnt affect trades made in US Dollars.
74) If the quote for a forward exchange contract is greater than the
computed price, the forward contract is:
A. a good buy.
B. overvalued.
C. undervalued.
D. at equilibrium.
75) Which of the following best represents the stream of income that is
available to common stockholders?
A. Gross profit
B. Net profit after tax and after preferred dividend payments
C. Earnings before interest and taxes
D. Operating profit
76) The statement, "Of course people will buy our product--each of its
features is better than the competition," most closely reflects which
consumer behavior concept?
A. needs
B. reference groups
C. psychographics
D. the economic-buyer theory
E. competitive advantage
77) A firm's "marketing mix" decision areas would NOT include:
A. Price.
B. People.
C. Promotion.
D. Place.
E. Product.
78) Clustering techniques applied to segmenting markets __________.
A. eliminate the need for marketing managers to specify in advance what
dimensions might be relevant for grouping consumers
B. remove the need for managerial judgment
C. usually require computers to group people based on data from
market research
D. doesnt apply to demographic data
E. is time consuming and expensive
79) The "four Ps" of a marketing mix are:
A. Production, Personnel, Price, and Physical Distribution
B. Promotion, Production, Price, and People
C. Potential customers, Product, Price, and Personal Selling
D. Product, Price, Promotion, and Profit
E. Product, Place, Promotion, and Price
80) The managerial process of developing and maintaining a match
between the resources of an organization and its market opportunities is
called:
A. marketing strategy planning.
B. marketing programming.
C. management by objective.
D. market planning.
E. strategic (management) planning.
A.
B.
C.
D.
E.
Mexico
Japan
Canada
China
Ecuador
99) One study found that manufacturing labor costs about _____ an hour
in China, compared to _____ dollars in the United States.
A. Less than $1; about 25
B. Less than $1; about 15
C. About $2; about 15
D. $2; about 25
E. Less than $1; about 40
100) Although the U.S. has had a longstanding agreement with _____
after the passage of NAFTA, _____ became the United States' second
largest trading partner.
A. Mexico, Canada
B. Canada, Venezuela
C. Canada, Mexico
D. Mexico, Venezuela
E. Great Britain, Paraguay