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BUS 475 FINAL Exam Answers

BUS 475 FINAL Exam Answers

Bus 475 Final Exam Questions

2014 Version 

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Bus 475 Final Exam Questions
2014 Version
Data Set 1 – 100 Questions
BUS 475

1) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?
A. $12,000
B. $18,000
C. $6,000
D. $28,000

2) Multinational corporations __________.
A. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries
B. are U.S. companies that sell goods and services in other countries
C. are required to use international accounting standards
D. are U.S. companies that trade their securities on the exchanges in other countries

3) Balance sheet accounts are considered to be __________.
A. capital accounts
B. nominal accounts
C. temporary stockholders’ accounts
D. permanent accounts

4) What is value chain management best defined as?
A. The incremental value of costs associated with hiring a new production floor leader
B. All activities associated with providing a product or service
C. A large chain that keeps the machines from falling on the production floor
D. Management decisions that affect how quickly the production run occurs

5) The primary purpose of the statement of cash flows is to __________.
A. provide information about the cash receipts and cash payments during a period
B. facilitate banking relationships
C. provide information about the investing and financing activities during a period
D. prove that revenues exceed expenses if there is a net income

6) In what situations will a static budget be most effective in evaluating a manager’s effectiveness?
A. The planned activity levels match actual activity levels.
B. The company has no fixed costs.
C. The company has substantial fixed costs.
D. The company has substantial variable costs.

7) Which one of the following is a product cost?
A. Sales person’s salaries
B. Advertising costs
C. Indirect labor
D. Office salaries

8) These are selected account balances on December 31, 2008.
Land (location of the corporation’s office building) $100,000
Land (held for future use) 150,000
Corporate Office Building 600,000
Inventory 200,000
Equipment 450,000
Office Furniture 100,000
Accumulated Depreciation 300,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
A. $1,600,000
B. $950,000
C. $1,300,000
D. $1,100,000

9) Of the following companies, which one would not likely employ the specific identification method for inventory costing?
A. Antique shop
B. Music store specializing in organ sales
C. Hardware store
D. Farm implement dealership

10) If a company reports a net loss, it __________.
A. will not be able to get a loan
B. may still have a net increase in cash
C. will not be able to make capital expenditures
D. will not be able to pay cash dividends
11) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
To enter the net income (or loss) for the period into the above worksheet requires an entry to the __________.
A. income statement debit column and the income statement credit column
B. income statement credit column and the balance sheet debit column
C. income statement debit column and the balance sheet credit column
D. balance sheet debit column and the balance sheet credit column
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
D. cooperate rather than compete with each other

19) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.
A. equal to quantity supplied
B. greater than quantity supplied
C. less than quantity supplied
D. double the quantity supplied

20) If a price ceiling is a binding constraint on the market, __________.
A. sellers cannot sell all they want to sell at the price ceiling
B. the equilibrium price must be below the price ceiling
C. there is excess supply
D. buyers cannot buy all they want to buy at the price ceiling
21) A tax on an imported good is called a __________.
A. supply tax
B. quota
C. tariff
D. trade tax

22) The political business cycle refers to __________.
A. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle
B. the fact that about every four years some politician advocates greater government control of the Fed
C. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected
D. changes in output created by the monetary rule the Fed must follow

23) Real GDP __________.
A. is not a valid measure of the economy’s performance, since prices change from year to year.
B. evaluates current production at current prices.
C. evaluates current production at the prices that prevailed in some specific year in the past.
D. is a measure of the value of goods only; it excludes the value of services.

24) The model of short-run economic fluctuations focuses on the price level and __________.
A. the neutrality of money
B. real GDP
C. economic growth
D. Net GDP

25) In the market for foreign-currency exchange in the open economy macroeconomic model, the amount of net capital outflow represents the quantity of dollars __________.
A. demanded for the purpose of buying U.S. net exports of goods and services
B. supplied for the purpose of buying assets abroad
C. supplied for the purpose of selling assets domestically
D. demanded for the purpose of importing foreign goods and services

26) The open-economy macroeconomic model examines the determination of __________.
A. the output growth rate and the inflation rate
B. unemployment and the exchange rate
C. the output growth rate and the real interest rate
D. the trade balance and the exchange rate

27) The balance of payment account is made up of:
A. an investment account and a consumption account.
B. an import account and an export account.
C. a current account and a financial and capital account.
D. a monetary account and a fiscal account.

28) To be competitive in a global economy, Europeans must increase their level of:
A. Espionage activity
B. Philanthropic contributions
C. Population density
D. Productivity
E. Financial subsidy

29) Which of these refers to the practices aimed at discovering and harnessing an organization’s intellectual resources?
A. Innovation
B. Competitiveness
C. Collaboration
D. Knowledge management
E. Effectiveness

30) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by:
A. Learning from the leader thereby avoiding the costs and risks of technology leadership
B. Mass-producing products that have an established market niche
C. Making subtle changes to the product, thereby avoiding patent restrictions
D. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materials
E. Technology followers are not successful at low-cost strategies

31) The best way for an employer to find out if a potential employee can do a job is by __________.
A. having them spend a day in the office
B. administering an IQ test
C. using the interview process
D. using a written test
E. using a performance simulation test

32) A manager’s ability to stimulate people to be high performers is referred to as:
A. Leading
B. Supervising
C. Organizing
D. Planning
E. Controlling

33) One of the most important contributors to total quality management has been the introduction of statistical tools to analyze the causes of product defects in an approach called:
A. ISO 9000
B. Organic
C. Total quality integration
D. Six Sigma Quality
E. Mechanistic

34) The pursuit of lucrative opportunities by enterprising individuals is called:
A. Business incubating
B. Social experimentation
C. Independence
D. Intrapreneurship
E. Entrepreneurship

35) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A. Diagnostic skills
B. Conceptual
C. Interpersonal/communication skills
D. Technical skills
E. Professional skills

36) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A. Technical
B. Professional
C. Interpersonal and communication
D. Conceptual and decision
E. Professional

37) As related to managing of human resources, diversity refers to:
A. Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B. Differences in retention strategies (such as training, hiring, incentives, etc)
C. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
D. Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
E. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)

38) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A. Selection
B. Managerial ethics
C. Employment
D. Diversity
E. Recruiting

39) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A. Money should not be considered a start-up ingredient
B. All entrepreneurs need venture capital in order to get started
C. Entrepreneurs are their own bosses and completely independent
D. Anyone can start a business
E. Successful entrepreneurs take very careful, calculated risks

40) Which of these represent skills that managers need?
A. Professional, technical and interpersonal & communication
B. Interpersonal & communication, conceptual & decision making and professional
C. Interpersonal, quantitative, and professional
D. Technical, interpersonal & communication and conceptual & decision making
E. Conceptual & decision making, professional and technical

41) The basic components of an effective sexual harassment policy include the following EXCEPT:
A. To establish a formal complaint procedure
B. To develop an organization wide policy on sexual harassment
C. To establish a means for ongoing training
D. To establish a performance appraisal system
E. To act immediately when employees complain of sexual harassment

42) Which of the following statements is true?
A. The sum of two mutually exclusive events is one.
B. If event (A) occurs, then its complement (A’) will also occur.
C. If A and B are independent events, the P(B) = P(A) P(B).
D. The probability of A and its complement (A’) will always sum to one.

43) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In a left-tailed test at = .05 we would __________.
A. comfortably accept the claim
B. switch to alpha of 0.01 for a more powerful test
C. comfortably reject the claim
D. feel uncomfortable with either decision (too close)

44) A poll showed that 48 out of 120 randomly chosen graduates of California medical schools last year intended to specialize in family practice. What is the width of a 90% confidence interval for the proportion that plan to specialize in family practice?
A. ± .07357
B. ± .08765
C. ± .04472
D. ± .00329

45) Use the following table to answer question:
P(S | W) is approximately _____.
A. .40
B. .12
C. .58
D. .30

46) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A. Mode
B. Mean
C. Midrange
D. Median

47) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value?
A. .0708
B. .0301
C. .0874
D. .4292

48) In lean systems, if a defective product is found, which of the following is generally NOT done?
A. The defective unit is returned to the worker responsible for creating the defect.
B. The production line is stopped.
C. The defective unit is passed on to the next workstation.
D. The production line is made aware of the problem without stopping the line.

49) A computer analysis reveals that the best-fitting trend model is Yt = 4.12 e 0.987 t. The trend was fitted using year-end common stock prices for Melodic Kortholt Outlet for the last six years. The R2 is 0.8571.
Which conclusion is not correct?
A. Few investments could match the astounding growth rate.
B. The stock’s true intrinsic value is $4.12.
C. At the end of year 3 the stock price would be nearly $80.
D. The absolute annual growth (in dollars per share) is increasing.

50) In statistical process control a p-chart could __________.
A. have more than one characteristics
B. measure the fraction of conforming parts in a sample
C. measure the number of defects per sample unit
D. use the student’s distribution

51) Which one of the following statements concerning production and staffing plans is best?
A. Production plans are based primarily on information from the master production plan.
B. A staffing plan is the intermediate link between the business plan and the master production schedule.
C. Aggregation can be performed along three dimensions: product families, labor, and time.
D. A master production schedule is a projected statement of income, costs, and profits.

52) Which one of the following statements about managerial inputs to production and staffing plans is best?
A. Marketing provides new product or service developments.
B. Human resources provide the training capacity and labor-market conditions.
C. Finance provides labor and machine standards.
D. Materials provide the current staffing level.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A. digital, physical
B. physical, financial
C. digital, e-commerce
D. physical, digital
E. e-commerce, digital

54) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A. globalization
B. nationalization
C. regionalization
D. business environment

55) Which of the following statements is correct?
A. An individual’s right to privacy supersedes the needs of society
B. Advances in information technologies have not affected individual privacy
C. It is difficult to determine and enforce privacy regulations
D. The Internet has increased individuals’ privacy
E. An individual’s right to privacy is absolute

56) In the _____ phase of the decision making process, managers test potential solutions “on paper.”
A. design
B. intelligence
C. choice
D. consideration
E. implementation

57) Which of the following is NOT an advantage of the buy option for acquiring IS applications?
A. saves time
B. saves money
C. software can be tried out
D. company will know what it is getting
E. few types of off-the-shelf software are available, thus limiting confusion

58) Which of the following is not a reason that managers need IT support?
A. Decisions are becoming more complex
B. Decision makers are often in different locations
C. Decisions must typically be made under time pressure
D. Need to access remote information sources
E. Number of alternatives are decreasing

59) _____ is a process that helps organizations identify, select, organize, disseminate, transfer, and apply expertise that are part of the organization’s memory and typically reside inside the organization in an unstructured manner.
A. Decision support
B. Data mining
C. Knowledge management
D. Online analytical processing
E. Discovery

60) Information-based industries are most susceptible to which one of Porter’s five forces?
A. threat of substitute products
B. rivalry among existing firms in an industry
C. bargaining power of customers
D. bargaining power of suppliers

61) _____ is the acquisition and efficient use of resources in accomplishing organizational goals.
A. Strategic planning
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 investor’s required rate of return.
D. the size of the firm’s 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. doesn’t 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. doesn’t 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.

81) The economists’ view of buyers:
A. assumes that they always buy the lowest-price alternative.
B. is based on the idea that consumers value time and select the first alternative they learn about.
C. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers.
D. None of these are true
E. emphasizes psychological variables rather than social influences.

82) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A. Market scanning
B. Positioning
C. Brand familiarity
D. Customer relationship management (CRM)
E. Market segmentation

83) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A. leans basically toward economy, quality, and dependability.
B. is even less predictable.
C. is always based on competitive bids from multiple suppliers.
D. is strictly economic and not at all emotional.
E. is always emotional.

84) Regarding organizational buying, the people who have the power to select or approve the supplier–especially for larger purchases–are called:
A. buyers.
B. gatekeepers.
C. deciders.
D. influencers.
E. users.

85) An Australian wine producer, facing declining sales at home, set up a new channel of distribution to sell wine in the United States. This seems to be an effort at:
A. market penetration.
B. product development.
C. diversification.
D. market development.
E. stratification.

86) The three basic tasks of ALL managers, according to the text, are:
A. execution, feedback, and control.
B. hiring, training, and compensating.
C. marketing, production, and finance.
D. planning, staffing, and evaluating.
E. planning, implementation, and control.

87) 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. strategic (management) planning.
C. marketing programming.
D. management by objective.
E. market planning.

88) Which of the following is correct about interpretive rules?
A. They must be accompanied by substantive rules.
B. All federal administrative agencies have implied power to make interpretive rules.
C. They require public notice and participation to create.
D. They do not establish new law.
E. Interpretive rules are not subject to judicial review.

89) To be guilty of monopolization, the defendant must:
A. Must be part of a conspiracy, combination, or contract.
B. Be a US company.
C. Have been previously convicted.
D. Possess monopoly power and have obtained the monopoly power by some improper act or be abusing the monopoly power.
E. Have obtained the monopoly power from the government.

90) The tort of intentional interference with contractual relations requires the following except:
A. Third-party inducement to breach the contract.
B. A new contract involving the third party who induced the breach.
C. Third-party knowledge of this contract.
D. A valid, enforceable contract between the contracting parties.

91) The tort of palming off involves:
A. Failing to credit another for that other person’s legal accomplishments.
B. Representing one’s own goods to be those of a competitor.
C. Making false statements about the goods of another.
D. Knowingly selling goods that are defective.
E. Blaming another for one’s own actions and communicating that blame to at least one other person.

92) Which of the following is correct about litigating commercial disputes?
A. A few states have established specialized trial courts for commercial disputes.
B. In all states, commercial disputes must be heard in a limited-jurisdiction court.
C. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.
D. Nearly all states have specialized trial courts that hear commercial disputes.
E. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.

93) An agent’s duty of notification can best be described as a duty to:
A. Notify the principal about any material information that the agent learns relative to the subject matter of the agency.
B. Notify the principle only if the principle if acting as an agent
C. Notify the principal a reasonable period of time in advance of terminating the agency arrangement.
D. Notify any third parties that the agent is acting as an agent.
E. Notify any third parties as to the identity of the principal.

94) Which of the following statements is true regarding the relationship of law and ethics?
A. In some cases the law will require a higher standard of conduct than ethics, but never vice versa.
B. Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.
C. In some cases ethics will require a higher standard of conduct than the law, but never vice versa.
D. The legal requirements will almost always be the same as the ethical requirement because the law is based on the ethical standards.

95) Which of the following is true about “proof of claims?”
A. They are never used by secured creditors.
B. They must be field by both secured and unsecured creditors in order for the creditor to receive a distribution from the bankruptcy estate.
C. They need not be filed by secured creditors whose security covers the amount of their debt.
D. They can generally be filed any time within one year of the filing of the bankruptcy petition.

96) An agent’s obligation to perform in accordance with the terms of the agency arrangement is the agent’s duty of:
A. Indemnification.
B. Obedience.
C. Loyalty.
D. Performance.
E. Nonbreach.

97) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
A. Stakeholder interest.
B. Maximizing profits.
C. Moral minimum.
D. Corporate citizenship.
E. Corporate social audit.

98) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
A. Mexico
B. Japan
C. Canada
D. China
E. 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

 

 

 

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Bus 475 Final Exam Questions
2014 Version
Data Set 2 – 100 Questions
BUS 475

1) 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, Venezuela
B. Canada, Venezuela
C. Great Britain, Paraguay
D. Mexico, Canada
E. Canada, Mexico
2) “Generally accepted” in the phrase generally accepted accounting principles means that the principles __________.
A. have been approved for use by the managements of business firms
B. have been approved by the Internal Revenue Service
C. have substantial authoritative support
D. are proven theories of accounting

30) Building a dynamic organization is another way of describing which function of management?
A. Staffing
B. Organizing
C. Leading
D. Controlling
E. Planning

4) Sam’s Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A. $8,250
B. $750
C. $4,500
D. $5,250

5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A. 2,133 units
B. 6,200 units
C. $25,600
D. 4,600 units

6) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A. The western division’s vice president’s salary
B. Cost of landscaping the corporate office
C. General corporate liability insurance
D. Factory janitor

7) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A. Master budgeting analysis
B. Exception reporting
C. Responsibility reporting
D. Static reporting

8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?
A. $6,000
B. $12,000
C. $28,000
D. $18,000

9) The cost of an asset and its fair market value are __________.
A. never the same
B. irrelevant when the asset is used by the business in its operations
C. the same on the date of acquisition
D. the same when the asset is sold

10) Which one of the following is a product cost?
A. Indirect labor
B. Sales person’s salaries
C. Advertising costs
D. Office salaries

11) What exists when budgeted costs exceed actual results?
A. A budgeting error
B. An unfavorable difference
C. An excess profit
D. A favorable difference

12) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000

Closing entries are necessary for __________.
A. permanent accounts only
B. both permanent and temporary accounts
C. permanent or real accounts only
D. temporary accounts only

13) Managerial accounting __________.
A. is concerned with costing products
B. pertains to the entity as a whole and is highly aggregated
C. places emphasis on special-purpose information
D. is governed by generally accepted accounting principles

14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?
A. Beer
B. Selling either results in the same additional income for the company
C. It should sell an equal quantity of both
D. Wine

15) Lekeisha’s income exceeds her expenditures. Lekeisha is a __________.
A. saver who demands money from the financial system
B. borrower who demands money from the financial system
C. borrower who supplies money to the financial system
D. saver who supplies money to the financial system

16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A. the value to Maurice of the option he would have chosen had Option B not been available
B. $100
C. $300
D. the value to Maurice of Options A, C and D combined

17) A production possibilities frontier will be a straight line if __________.
A. the economy is producing efficiently
B. the economy is engaged in trade with at least one other economy
C. increasing the production of one good by x units entails no opportunity cost in terms of the other good
D. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good

18) In economics, the cost of something is __________.
A. what you give up to get it
B. often impossible to quantify, even in principle
C. the dollar amount of obtaining it
D. always measured in units of time given up to get it

19) A tax on an imported good is called a __________.
A. supply tax
B. trade tax
C. quota
D. tariff

20) Which of the following statements about GDP is correct?
A. GDP is to a nation’s economy as household income is to a household.
B. GDP increases if the total population increases.
C. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D. Money continuously flows from households to government and then back to households, and GDP measures this flow of money.

21) In computing GDP, market prices are used to value final goods and services because __________.
A. if market prices are out of line with how people value goods, the government sets price ceilings and price floors
B. Market prices are not used in computing GDP
C. market prices reflect the values of goods and services
D. market prices do not change much over time, so it is easy to make comparisons between years

22) Which of the following statements about GDP is correct?
A. Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
B. Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.
C. Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
D. Nominal GDP values production at constant prices, whereas real GDP values production at current prices.

23) Which of the following is not correct?
A. The U.S. debt per-person is large compared with average lifetime income.
B. In 2005, the U.S. government had a deficit.
C. A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
D. Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.

24) The part of the balance of payments account that lists all long-term flows of payments is called the:
A. balance of trade.
B. financial and capital account.
C. government financial account.
D. current account.

25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A. the sacrifice ratio dilemma
B. the monetary policy reaction lag
C. the time inconsistency of policy
D. inflation targeting

26) In general, the longest lag for __________.
A. fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
B. both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
C. monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
D. both fiscal and monetary policy is the time it takes to change policy

27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A. Only item (2) is included in GDP and it is included in the investment component.
B. Item (1) is included in the consumption component, while item (2) is included in the investment component.
C. Item (1) is included in the investment component, while item (2) is included in the consumption component.
D. Both item (1) and item (2) are included in the consumption component of GDP.

28) Managers will utilize __________ skills with increasing frequency as they rise within an organization.
A. Professional
B. Interpersonal and communication
C. Technical
D. Professional
E. Conceptual and decision

29) Which of these represent skills that managers need?
A. Interpersonal, quantitative, and professional
B. Technical, interpersonal & communication and conceptual & decision making
C. Professional, technical and interpersonal & communication
D. Conceptual & decision making, professional and technical
E. Interpersonal & communication, conceptual & decision making and professional

30) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A. standards of financial reporting
B. operating guidelines
C. generally accepted accounting principles
D. generally accepted accounting standards

31) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A. Anyone can start a business
B. All entrepreneurs need venture capital in order to get started
C. Successful entrepreneurs take very careful, calculated risks
D. Entrepreneurs are their own bosses and completely independent
E. Money should not be considered a start-up ingredient

32) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A. Diversity
B. Managerial ethics
C. Recruiting
D. Employment
E. Selection

33) A manager’s ability to stimulate people to be high performers is referred to as:
A. Planning
B. Supervising
C. Controlling
D. Organizing
E. Leading

34) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A. Total quality management
B. Customer-based integration
C. Computer-integrated manufacturing (CIM)
D. Just-in-time control (JIT)
E. ISO 9000

35) Japanese manufacturers’ kaizen (continuous improvement) programs enable them to maintain:
A. A strategic alliance
B. A homogeneous workforce
C. Positive working relationships with all employees
D. A Learning advantage over their competition
E. Larger, faster facilities

36) Listening to employee suggestions, gaining support for organizational objectives and fostering an atmosphere of teamwork are all considered:
A. Technical skills
B. Conceptual
C. Professional skills
D. Interpersonal/communication skills
E. Diagnostic skills

37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A. To develop an organization wide policy on sexual harassment
B. To establish a means for ongoing training
C. To act immediately when employees complain of sexual harassment
D. To establish a performance appraisal system
E. To establish a formal complaint procedure

38) Teams that operate separately from the regular work structure and exist temporarily are known as:
A. Management teams
B. Transnational teams
C. Self-managed teams
D. Parallel teams
E. Self-designing teams

39) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A. Goal Coordination
B. Controlling
C. Organizing
D. Staffing
E. Planning

40) As related to managing of human resources, diversity refers to:
A. Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)
B. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
C. Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
D. Differences in retention strategies (such as training, hiring, incentives, etc)
E. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)

41) __________ is the process of working with people and resources to accomplish organizational goals.
A. Controlling
B. Decision making
C. Planning
D. Supervising
E. Management

42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A. 3
B. 3.5
C. 2.5
D. 2

43) Use the following table to answer question:
P(S | W) is approximately _____.
A. .40
B. .30
C. .12
D. .58

44) Use the following table to answer question:
P(M A) is approximately _____.
A. .50
B. .625
C. .125
D. .25

45) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study’s findings, which of the following is true?
A. The p-value is equal to .05.
B. The p-value is greater than .05.
C. The p-value cannot be determined without specifying .
D. The p-value is less than .05.

46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A. High R2 (due to city size).
B. Positive slope (due to city size).
C. No correlation.
D. Autocorrelation.

47) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A. Midrange
B. Mean
C. Mode
D. Median
48) Likely reasons for inaccurate control limits would include which of the following?
A. Process variation was not zero, as expected.
B. The engineering parameter for variance is unknown.
C. There was insufficient preliminary sampling.
D. The engineers were underpaid for their work.

49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A. The most you would want to pay for an additional unit of A would be $7.50.
B. You can change quantities of X and Y at no cost for Constraint B.
C. For every additional unit of the objective function you create, the price of A rises by $7.50.
D. For every additional unit of the objective function you create, you lose 0 units of B.

50) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A. The expected duration of this project is 25 + 15 + 20 = 60 days.
B. A–D–C is the critical path.
C. The expected duration of this project is 25 days.
D. A–B–C has the most slack.

51) Which one of the following statements concerning production and staffing plans is best?
A. A master production schedule is a projected statement of income, costs, and profits.
B. Aggregation can be performed along three dimensions: product families, labor, and time.
C. Production plans are based primarily on information from the master production plan.
D. A staffing plan is the intermediate link between the business plan and the master production schedule.

52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A. you would lose $80 if one of your workers missed an entire 8 hour shift.
B. the next worker that offers to work an extra 8 hours should receive at least $80.
C. you would be willing pay up to $60 for someone to work another 6 hours.
D. you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.

53) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A. physical, digital
B. e-commerce, digital
C. physical, financial
D. digital, e-commerce
E. digital, physical

54) When customers access a Web site and make purchases, they generate __________.
A. Tracking cookies
B. Web data
C. Information
D. Clickstream data
E. Hyperlink data

55) _____ is the integration of economic, social, cultural, and ecological facets of life, enabled by information.
A. regionalization
B. globalization
C. nationalization
D. business environment

56) Various organizations that promote fair and responsible use of information systems often develop __________.
A. a code of ethics
B. responsibility charters
C. a strategic plan
D. a mission statement
E. a goals outline

57) What is _____ is not necessarily _____.
A. Illegal, unethical
B. Unethical, legal
C. Ethical, illegal
D. Unethical, illegal
E. Ethical, legal

58) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A. Multidimensional data analysis, structured query language
B. Multidimensional data analysis, neural networks
C. Data mining, multidimensional data analysis
D. Data mining, expert system
E. Multidimensional data analysis, data mining

59) Computer support is greatest for which of the following problems?
A. Semistructured and strategic planning
B. Semistructured and management control
C. Unstructured and operational control
D. Structured and operational control
E. Structured and management control

60) The management cockpit best exemplifies which type of system?
A. Decision support system
B. Functional area information system
C. Expert system
D. Digital dashboard
E. Group decision support system

61) _____ is the efficient and effective execution of specific tasks.
A. Operational control
B. Expertise
C. Management control
D. Strategic planning
E. Wisdom

62) Geocoding is __________.
A. accessing geographical information
B. integrating maps with spatially oriented databases and other databases
C. integrating organizational transactions with spatially oriented databases
D. programming spatially oriented databases
E. encrypting spatial information

63) At 8% compounded annually, how long will it take $750 to double?
A. 48 months
B. 6.5 years
C. 9 years
D. 12 years

64) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A. Cash flow statement
B. Balance sheet
C. Income statement
D. Quarterly statement

65) 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. $570
B. $490
C. $900
D. -$150

66) Disadvantages of using current liabilities as opposed to long-term debt include:
A. higher cash flow exposure
B. greater risk of illiquidity, and uncertainty of interest costs
C. decreased risk of liquidity
D. certainty of interest costs
E. uncertainty of future liabilities

67) 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. 12.5%
B. 36.13%
C. 8.0%
D. 13.6%

68) 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.

69) 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. rate of return
D. dividends paid
E. starting value

70) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A. at equilibrium.
B. undervalued.
C. a good buy.
D. overvalued.

71) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt 8%
Cost of preferred stock 12%
Cost of common stock 16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A. $1,568
B. $871
C. $1,241
D. $463

72) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A. The project’s IRR would have to be less that the firm’s discount rate.
B. The project would add value to the firm.
C. Under all conditions, the project’s payback would be less than the profitability index.
D. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.

73) The common stockholders are most concerned with:
A. the spread between the return generated on new investments and the investor’s required rate of return.
B. the size of the firm’s beginning earnings per share.
C. the risk of the investment.
D. the percentage of profits retained.

74) PepsiCo calculates unlevered betas for each peer group in order to:
A. eliminate different financial risks.
B. eliminate competitive factors.
C. eliminate judgment factors.
D. eliminate different business risks.

75) Which of the following best represents operating income?
A. Income from discontinued operations
B. Earnings before interest and taxes
C. Income from capital gains
D. Income after financing activities

76) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A. is even less predictable.
B. leans basically toward economy, quality, and dependability.
C. is always emotional.
D. is strictly economic and not at all emotional.
E. is always based on competitive bids from multiple suppliers.

77) The basic objective of the U.S. market-directed economic system is to:
A. achieve an annual growth rate of at least 10 percent.
B. provide each person with an equal share of the economic output.
C. make the most efficient use of the country’s resources.
D. minimize inflation.
E. satisfy consumer needs as they–the consumers–see them.

78) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A. GDP measures show people’s tendency to buy particular products.
B. income tends to be evenly distributed among consumers in most countries.
C. GDP estimates may not be very accurate for very different cultures and economies.
D. Other countries most likely don’t use the US Dollar as their primary currency.
E. GDP measures show the degree of competition in a market.

79) A firm’s “marketing mix” decision areas would NOT include:
A. Promotion.
B. People.
C. Price.
D. Place.
E. Product.

80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A. Brand familiarity
B. Positioning
C. Market scanning
D. Customer relationship management (CRM)
E. Market segmentation

81) 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

82) When evaluating macro-marketing:
A. the evaluation is necessarily subjective.
B. the best approach is to consider the profit generated by individual firms within the overall system.
C. one must determine how efficiently the society’s resources are used.
D. one must consider the society’s role in the marketing system.
E. one must consider each individual firm’s role in the marketing system.

83) A cluster analysis of the “toothpaste market” would probably show that:
A. the broad product-market can be served effectively with one marketing mix.
B. most consumers are mainly concerned about brightness of teeth.
C. factors such as taste, price, and “sex appeal” are not important.
D. most consumers are concerned about cost.
E. different market segments seek different product benefits.

84) Clustering techniques applied to segmenting markets __________.
A. usually require computers to group people based on data from market research
B. remove the need for managerial judgment
C. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers
D. doesn’t apply to demographic data
E. is time consuming and expensive

85) The three basic tasks of ALL managers, according to the text, are:
A. planning, staffing, and evaluating.
B. marketing, production, and finance.
C. execution, feedback, and control.
D. planning, implementation, and control.
E. hiring, training, and compensating.

86) The difference between target marketing and mass marketing is that target marketing:
A. means focusing on a small market.
B. focuses on short-run objectives, while mass marketing focuses on long-run objectives.
C. focuses on specific customers, while mass marketing aims at an entire market.
D. aims at increased sales, while mass marketing focuses on increased profits.
E. does not rely on e-commerce but mass marketing does.

87) When one considers the strategy decisions organized by the four Ps, branding is related to packaging as:
A. store location is to sales force selection.
B. personal selling is to mass selling.
C. production is to marketing.
D. branding is to pricing.
E. pricing is to promotion.

88) Which of the following statements is not true under the Fair Labor Standards Act?
A. Children ages 16 and 17 may work unlimited hours in nonhazardous jobs.
B. Persons age 18 or over may work unlimited hours in nonhazardous jobs.
C. Children ages 14 and 15 may work limited hours in nonhazardous jobs.
D. Children under 14 cannot work at all, except on farms.
E. Persons age 18 or over may work unlimited hours in hazardous jobs.

89) Probable cause is most directly associated with which step of the criminal process?
A. Plea bargaining
B. Arraignment
C. Indictment
D. Arrest
E. Jury deliberations

90) Which of the following statements is generally not true about state intermediate appellate courts?
A. The appellate court allows the parties to make oral arguments outlining their position.
B. The appellate court allows the parties to introduce new evidence so long as it was not previously introduced at the original trial.
C. The appellate court usually allows the parties to file briefs outlining support for their positions.
D. The appellate court reviews the record of the trial court.
E. Appellate court decisions are final and further appeal is not possible.

91) Which of the following terms need not be disclosed under Truth-in-Lending Act?
A. The terms available from competitors.
B. The total finance charge.
C. The cash price of the product.
D. The annual percentage rate (APR).
E. Amount of payments.

92) Which of the following activities by an administrative agency requires public notice and participation?
A. Substantive rule making and statements of policy only.
B. Statements of policy only.
C. Substantive rule making and interpretive rule making only.
D. Substantive rule making only.
E. Substantive rule making, interpretive rule making, and statements of policy.

93) Which of the following is not one of the Caux Round Table Principles for International Business?
A. Promotion of Multiculturalism.
B. Respect for the Environment.
C. Support for Multilateral Trade.
D. Avoidance of Illicit Operations.
E. Responsibility of Business Beyond Shareholders Toward Stakeholders.

94) The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is:
A. The corporate citizenship theory.
B. The moral minimum theory.
C. The social audit theory.
D. The stakeholder interest theory.
E. The maximizing profits theory.

95) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
A. Corporate citizenship.
B. Maximizing profits.
C. Corporate social audit.
D. Stakeholder interest.
E. Moral minimum.

96) Which of the following lists, in descending priority, of sources considered by most courts in settling questions of international law?
A. Conventions, treaties, comity, customs
B. Treaties, customs, conventions, comity
C. Treaties, customs, conventions, comity
D. Conventions, comity, customs, general principles of law
E. Treaties, customs, general principles of law, judicial decisions and teachings

97) If the value of the collateral is less than the debt owed to the secured party, then:
A. The secured party gets to take some other property as collateral so his entire debt is secured.
B. The secured party is still secured for the entire debt owed him.
C. The secured party is unsecured for the entire debt.
D. The secured party loses the excess of debt over the value of the security.
E. The secured party is unsecured for the excess of debt over the value of the security.

98) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.
A. $2; about 25
B. Less than $1; about 15
C. Less than $1; about 40
D. Less than $1; about 25
E. About $2; about 15

99) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
A. China
B. Japan
C. Ecuador
D. Mexico
E. Canada

100) The cost principle requires that when assets are acquired, they be recorded at __________.
A. list price
B. selling price
C. exchange price paid
D. appraisal value

 

 

Purchase

Bus 475 Final Exam Questions
2014 Version
Data Set 3 – 100 Questions
BUS 475

1) Which one of the following is a product cost?
A. Indirect labor
B. Sales person’s salaries
C. Office salaries
D. Advertising costs

2) Lucy starts her own psychiatric practice, but her expenditures to open the practice exceed her income. Lucy is a __________.
A. borrower who demands money from the financial system
B. borrower who supplies money to the financial system
C. saver who supplies money to the financial system
D. saver who demands money from the financial system

3) Of the following companies, which one would not likely employ the specific identification method for inventory costing?
A. Music store specializing in organ sales
B. Antique shop
C. Farm implement dealership
D. Hardware store
4) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Adjusted trial balance
B. Comparative balance sheets
C. Additional information
D. Current income statement
5) The conceptual framework developed by the Financial Accounting Standards Board __________.
A. was approved by a vote of all accountants
B. is viewed as providing a constitution for setting accounting standards for financial reporting
C. are rules that all accountants must follow
D. is legally binding on all accountants

6) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A. Static reporting
B. Exception reporting
C. Responsibility reporting
D. Master budgeting analysis

7) The cost principle requires that when assets are acquired, they be recorded at __________.
A. appraisal value
B. selling price
C. exchange price paid
D. list price

8) If a company reports a net loss, it __________.
A. will not be able to make capital expenditures
B. will not be able to get a loan
C. may still have a net increase in cash
D. will not be able to pay cash dividends

9) The major reporting standard for management accounts is __________.
A. generally accepted accounting principles
B. relevance to decisions
C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management
D. the Sarbanes-Oxley Act of 2002

10) The primary purpose of the statement of cash flows is to __________.
A. facilitate banking relationships
B. provide information about the cash receipts and cash payments during a period
C. provide information about the investing and financing activities during a period
D. prove that revenues exceed expenses if there is a net income

11) Managerial accounting __________.
A. places emphasis on special-purpose information
B. pertains to the entity as a whole and is highly aggregated
C. is concerned with costing products
D. is governed by generally accepted accounting principles

12) A well-designed activity-based costing system starts with __________.
A. analyzing the activities performed to manufacture a product
B. assigning manufacturing overhead costs for each activity cost pool to products
C. identifying the activity-cost pools
D. computing the activity-based overhead rate

13) Balance sheet accounts are considered to be __________.
A. nominal accounts
B. capital accounts
C. temporary stockholders’ accounts
D. permanent accounts

14) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A. Cost of landscaping the corporate office
B. The western division’s vice president’s salary
C. General corporate liability insurance
D. Factory janitor

15) The primary purpose of the statement of cash flows is to __________.
A. facilitate banking relationships
B. provide information about the cash receipts and cash payments during a period
C. provide information about the investing and financing activities during a period
D. prove that revenues exceed expenses if there is a net income

16) Lekeisha’s income exceeds her expenditures. Lekeisha is a __________.
A. borrower who demands money from the financial system
B. borrower who supplies money to the financial system
C. saver who supplies money to the financial system
D. saver who demands money from the financial system

17) A tax on an imported good is called a __________.
A. supply tax
B. trade tax
C. tariff
D. quota

18) One of Astro Company’s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
A. $150,000
B. $60,000
C. $90,000
D. $75,000

19) One characteristic of an oligopoly market structure is:
A. firms in the industry have some degree of market power.
B. firms in the industry are typically characterized by very diverse product lines.
C. the actions of one seller have no impact on the profitability of other sellers.
D. products typically sell at a price that reflects their marginal cost of production.
20) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.
A. less than quantity supplied
B. greater than quantity supplied
C. double the quantity supplied
D. equal to quantity supplied

21) When a firm sells a good or a service, the sale contributes to the nation’s income __________.
A. only if the buyer of the good or service is a household or another firm
B. only if the buyer of the good or service is a household
C. We have to know whether the item being sold is a good or a service in order to answer the question
D. whether the buyer of the good or a service is a household, another firm, or the government

22) The open-economy macroeconomic model includes __________.
A. only the market for foreign-currency exchange
B. only the market for loanable funds
C. neither the market for loanable funds or the market for foreign-currency exchange
D. both the market for loanable funds and the market for foreign-currency exchange

23) Most economists use the aggregate demand and aggregate supply model primarily to analyze __________.
A. the effects of macroeconomic policy on the prices of individual goods
B. short-run fluctuations in the economy
C. productivity and economic growth
D. the long-run effects of international trade policies

24) In the market for foreign-currency exchange in the open economy macroeconomic model, the amount of net capital outflow represents the quantity of dollars __________.
A. supplied for the purpose of buying assets abroad
B. supplied for the purpose of selling assets domestically
C. demanded for the purpose of importing foreign goods and services
D. demanded for the purpose of buying U.S. net exports of goods and services

25) Which of the following is not correct?
A. A potential cost of deficits is that they reduce national saving, thereby reducing growth of the capital stock and output growth.
B. The U.S. debt per-person is large compared with average lifetime income.
C. Deficits give people the opportunity to consume at the expense of their children, but they do not require them to do so.
D. In 2005, the U.S. government had a deficit.

26) The Federal Reserve will tend to tighten monetary policy when __________.
A. interest rates are rising too rapidly
B. the growth rate of real GDP is quite sluggish
C. it thinks the unemployment rate is too high
D. it thinks inflation is too high today, or will become too high in the future

27) Which of the following statements about GDP is correct?
A. Nominal GDP values production at current prices, whereas real GDP values production at constant prices.
B. Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.
C. Nominal GDP values production at constant prices, whereas real GDP values production at current prices.
D. Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.

28) The most dominant areas in the global economy include:
A. North America, Western Europe and Asia
B. North America, Asia and Africa
C. North America, Mexico and Asia
D. Western Europe, Asia and Africa
E. North America, South America and Western Europe

29) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A. Diversity
B. Recruiting
C. Employment
D. Managerial ethics
E. Selection

30) A leader is:
A. Someone with authority over others
B. Someone who influences others to attain goals
C. The top level manager in a firm or business
D. Someone well-respected by others
E. A strategic level manager

31) Teams that operate separately from the regular work structure and exist temporarily are known as:
A. Management teams
B. Self-managed teams
C. Parallel teams
D. Transnational teams
E. Self-designing teams

32) __________ is the process of working with people and resources to accomplish organizational goals.
A. Supervising
B. Decision making
C. Management
D. Controlling
E. Planning

33) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n):
A. Online Business
B. Entrepreneurship venture
C. Large corporation
D. Small business
E. Multinational corporation

34) A manager’s ability to stimulate people to be high performers is referred to as:
A. Supervising
B. Controlling
C. Organizing
D. Leading
E. Planning

35) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A. Customer-based integration
B. Computer-integrated manufacturing (CIM)
C. Just-in-time control (JIT)
D. ISO 9000
E. Total quality management

36) Having individuals actually do the job they are applying for as a test to see if they can do it is __________.
A. a formal means of screening candidates
B. an approach with high reliability
C. an approach with high face validity
D. an informal means of screening candidates
E. an approach with low reliability

37) The basic components of an effective sexual harassment policy include the following EXCEPT:
A. To act immediately when employees complain of sexual harassment
B. To develop an organization wide policy on sexual harassment
C. To establish a means for ongoing training
D. To establish a performance appraisal system
E. To establish a formal complaint procedure

38) The best way for an employer to find out if a potential employee can do a job is by __________.
A. administering an IQ test
B. using the interview process
C. using a performance simulation test
D. using a written test
E. having them spend a day in the office

39) As related to managing of human resources, diversity refers to:
A. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)
B. Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)
C. Differences in retention strategies (such as training, hiring, incentives, etc)
D. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)
E. Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)

40) One of the most important contributors to total quality management has been the introduction of statistical tools to analyze the causes of product defects in an approach called:
A. Mechanistic
B. Six Sigma Quality
C. Organic
D. Total quality integration
E. ISO 9000

41) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A. Successful entrepreneurs take very careful, calculated risks
B. Anyone can start a business
C. All entrepreneurs need venture capital in order to get started
D. Entrepreneurs are their own bosses and completely independent
E. Money should not be considered a start-up ingredient

42) Jolly Blue Giant Health Insurance (JBGHI) is concerned about rising lab test costs and would like to know what proportion of the positive lab tests for prostate cancer are actually proven correct through subsequent biopsy. JBGHI demands a sample large enough to ensure an error of ± 2% with 90% confidence. What is the necessary sample size?
A. 1,692
B. 609
C. 2,401
D. 1,604

43) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value?
A. .0708
B. .0301
C. .4292
D. .0874

44) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A. 3.5
B. 3
C. 2.5
D. 2

45) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, the standard deviation is approximately _____.
A. 3.75
B. 4.55
C. 4.75
D. 3.03

46) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.

Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A. Autocorrelation.
B. High R2 (due to city size).
C. No correlation.
D. Positive slope (due to city size).

47) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study’s findings, which of the following is true?
A. The p-value is less than .05.
B. The p-value is equal to .05.
C. The p-value cannot be determined without specifying .
D. The p-value is greater than .05.

48) In an activity-on-node [AON] network, the nodes represent ____________, whereas the arcs represent ____________.
A. precedence relationships; time
B. events; activities
C. activities; time
D. activities; precedence relationships

49) Theoretically, service capacity must exceed demand, lest queues become infinitely long. If capacity does not exceed demand, what is likely to happen?
A. All of these
B. Servers will eliminate time-consuming portions of their jobs, thereby increasing capacity.
C. Customers will renege or balk, thereby reducing demand.
D. Servers will decrease time spent per customer, thereby increasing capacity.

50) Queuing models use an A/B/C notation. What do these variables represent?
A. minimum time between arrivals/minimum allowable service time/minimum number of parallel servers
B. maximum time between arrivals/maximum allowable service time/maximum number of parallel servers
C. distribution of time between arrivals/distribution of service times/number of parallel servers
D. average time between arrivals/average service time/number of parallel servers

51) In a network diagram, an activity:
A. must always have a single, precise estimate for the time duration.
B. should always be something the company has had experience with.
C. is the largest unit of work effort consuming both time and resources that a project manager can schedule and control.
D. is the smallest unit of work effort consuming both time and resources that a project manager can schedule and control.

52) Suppose the estimated quadratic model Yt = 500 + 20 t – t2 is the best-fitting trend of sales of XYZ Inc. using data for the past twenty years (t = 1, 2,.., 20).
Which statement is incorrect?
A. Sales are increasing by about 20 units per year.
B. The turning point would be in period 10.
C. The trend was higher in year 10 than in year 20.
D. Latest year sales are no better than in year zero.

53) Which of the following statements is correct?
A. Advances in information technologies have not affected individual privacy
B. An individual’s right to privacy is absolute
C. It is difficult to determine and enforce privacy regulations
D. An individual’s right to privacy supersedes the needs of society
E. The Internet has increased individuals’ privacy

54) The Global, Web-Based Platform enables individuals to do which of the following?
A. produce and sell goods and services
B. connect, compute, communicate, collaborate, and compete everywhere and all the time
C. access information, services, and entertainment
D. exchange knowledge
E. all of these are true

55) It is very difficult to manage data for which of the following reasons?
A. data security is easy to maintain
B. amount of data stays about the same over time
C. data are scattered throughout organizations
D. decreasing amount of external data needs to be considered
E. data are stored in the same format throughout organizations

56) Success in the _____ phase of the decision making process results in resolving the original problem, and failure leads to a return to previous phases.
A. implementation
B. choice
C. design
D. intelligence
E. consideration

57) When customers access a Web site and make purchases, they generate __________.
A. Web data
B. Tracking cookies
C. Information
D. Clickstream data
E. Hyperlink data

58) _____ is the efficient and effective execution of specific tasks.
A. Expertise
B. Operational control
C. Management control
D. Strategic planning
E. Wisdom

59) Geocoding is __________.
A. integrating organizational transactions with spatially oriented databases
B. integrating maps with spatially oriented databases and other databases
C. encrypting spatial information
D. accessing geographical information
E. programming spatially oriented databases

60) Information-based industries are most susceptible to which one of Porter’s five forces?
A. threat of substitute products
B. bargaining power of suppliers
C. bargaining power of customers
D. rivalry among existing firms in an industry

61) International Game Technology’s new ERP system produced all of the following benefits except:
A. The company gained flexibility in manufacturing products
B. Integrated the company’s business functions
C. Company was able to maintain its original business processes
D. ERP system connected the company’s global operations
E. Operations employees were able to access manufacturing process details at their workstations

62) Credit card companies would most likely use which of the following to check for fraudulent credit card use?
A. Data mining
B. Expert systems
C. Neural networks
D. Multidimensional data analysis
E. Structured query language

63) 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. $570
B. $900
C. -$150
D. $490

64) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:

Cost of debt 8%
Cost of preferred stock 12%
Cost of common stock 16%

Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A. $871
B. $1,241
C. $1,568
D. $463

65) The common stockholders are most concerned with:
A. the size of the firm’s beginning earnings per share.
B. the risk of the investment.
C. the spread between the return generated on new investments and the investor’s required rate of return.
D. the percentage of profits retained

66) Tri State Pickle Company preferred stock pays a perpetual annual dividend of 2 1/2% of its par value. Par value of TSP preferred stock is $100 per share. If investors’ required rate of return on this stock is 15%, what is the value of per share?
A. $15.00
B. $16.67
C. $6.00
D. $37.50

67) 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.

68) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?
A. 5%
B. 7%
C. 8%
D. 6%

69) PepsiCo calculates unlevered betas for each peer group in order to:
A. eliminate competitive factors.
B. eliminate judgment factors.
C. eliminate different financial risks.
D. eliminate different business risks.

70) According to the hedging principle, permanent assets should be financed with _____ liabilities.
A. spontaneous
B. current
C. fixed
D. permanent

71) Bondholders have a priority claim on assets ahead of:
A. shareholders.
B. investors
C. creditors.
D. common and preferred stockholders.

72) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A. Balance sheet
B. Income statement
C. Quarterly statement
D. Cash flow statement

73) Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520.
Year Net Cash Flow
1 $1,000
2 $1,500
3 $ 500

A. 48%
B. 32%
C. 28%
D. 40%

74) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock?
A. 20.62%
B. 14.37%
C. 15.62%
D. 9.37%

75) You hold a portfolio with the following securities:
Security Percent of Portfolio Beta Return
X Corporation 20% 1.35 14%
Y Corporation 35% .95 10%
Z Corporation 45% .75 8%

Compute the expected return and beta for the portfolio.
A. 10.67%, 1.02
B. 34.4%, .94
C. 9.9%, .94
D. 9.9%, 1.02

76) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called:
A. marketing programming.
B. strategic (management) planning.
C. market planning.
D. marketing strategy planning.
E. management by objective.

77) Analysis of demographic dimensions:
A. considers income and sex, but not age.
B. can be used along with analysis of other dimensions to identify attractive target markets.
C. only considers age.
D. is the most effective way to identify unmet consumer needs.
E. is the most important step to successful segmentation.

78) When evaluating macro-marketing:
A. the best approach is to consider the profit generated by individual firms within the overall system.
B. one must consider each individual firm’s role in the marketing system.
C. one must consider the society’s role in the marketing system.
D. one must determine how efficiently the society’s resources are used.
E. the evaluation is necessarily subjective.

79) “Marketing strategy planning” means:
A. finding attractive opportunities and selecting a target market.
B. selecting an attractive marketing mix.
C. selecting a target market and developing a marketing strategy.
D. selecting an attractive target market.
E. finding attractive opportunities and developing profitable marketing strategies.

80) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A. Customer relationship management (CRM)
B. Market segmentation
C. Brand familiarity
D. Positioning
E. Market scanning

81) When doing “positioning,” a marketing manager should:
A. exclusively use focus groups.
B. plan physical product changes rather than image changes.
C. avoid targeting strategies.
D. focus on specific product features of all generic competitors.
E. rely on how customers think about proposed and/or existing brands in a market.

82) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A. is always emotional.
B. is even less predictable.
C. is strictly economic and not at all emotional.
D. is always based on competitive bids from multiple suppliers.
E. leans basically toward economy, quality, and dependability.

83) The clustering techniques that can be used in segmenting:
A. looks for differences between groups of people.
B. group people together based on age.
C. eliminate the need for management intuition and judgment.
D. group people together into heterogeneous product-market segments.
E. try to find similar patterns within sets of data.

84) A firm’s “marketing mix” decision areas would NOT include:
A. Place.
B. Product.
C. Promotion.
D. People.
E. Price.

85) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A. Other countries most likely don’t use the US Dollar as their primary currency.
B. GDP measures show the degree of competition in a market.
C. GDP measures show people’s tendency to buy particular products.
D. income tends to be evenly distributed among consumers in most countries.
E. GDP estimates may not be very accurate for very different cultures and economies.

86) Regarding organizational buying, the people who have the power to select or approve the supplier–especially for larger purchases–are called:
A. users.
B. gatekeepers.
C. influencers.
D. deciders.
E. buyers.

87) Clustering techniques applied to segmenting markets __________.
A. is time consuming and expensive
B. remove the need for managerial judgment
C. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers
D. usually require computers to group people based on data from market research
E. doesn’t apply to demographic data

88) Justin was hired in February of 2004 as a salesperson. There is no written employment contract, and Justin is paid on a commission basis. Justin’s manager has said to Justin on several occasions that if Justin continues to meet his sales quotas, that the company “will keep him around for a long time.” Justin has always met his sales quotas, but is told one day that they have decided to replace him because he does not project the image that the company wants. If Justin is an at-will employee, which of the following is true?
A. The statements by the manager could likely give Justin contract rights that could amount to an exception to the at-will doctrine.
B. Because there is no written employment contract, the employer can terminate Justin.
C. The employer can terminate Justin only if the employer would suffer a loss by not terminating him.
D. As an at will employee, there are no restrictions on the employer terminating Justin.
E. The employer would not be able to fire Justin on the basis of public policy.

89) Which of the following is correct about litigating commercial disputes?
A. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.
B. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.
C. A few states have established specialized trial courts for commercial disputes.
D. Nearly all states have specialized trial courts that hear commercial disputes.
E. In all states, commercial disputes must be heard in a limited-jurisdiction court.

90) Which article of the United States Constitution deals with the judicial power of the federal government?
A. Article IV.
B. Article II.
C. Article III.
D. Article I.
E. Article V.

91) Mary arrived at work one day, and her boss said to her, “That’s the ugliest dress I have ever seen. Because you wore that to work today, you are fired.” Assuming that Mary is an at-will employee, which of the following is true?
A. Mary can be fired only if it is in the best interest of the employer.
B. Mary can be fired for any reason.
C. If Mary has the will to work, she cannot be fired without cause.
D. If none of the exceptions to the at-will rule apply, Mary can be fired.

92) Which of the following is true about the Sherman Act?
A. A business can be liable under either Section 1 or Section 2 without any agreement with another party.
B. Liability under Section 1 for restraint of trade requires agreement with another party, but liability under Section 2 for monopolization does not.
C. Liability under Section 2 for monopolization requires agreement with another party, but liability under Section 1 for restraint of trade does not.
D. Liability under either Section 1 or Section 2 requires agreement with another party.

93) If the value of the collateral is less than the debt owed to the secured party, then:
A. The secured party gets to take some other property as collateral so his entire debt is secured.
B. The secured party is unsecured for the excess of debt over the value of the security.
C. The secured party loses the excess of debt over the value of the security.
D. The secured party is still secured for the entire debt owed him.
E. The secured party is unsecured for the entire debt.

94) If you are a creditor, your best protection in the event of the debtor’s bankruptcy (including protection from the debtor’s other creditors) is usually obtained if you had previously received:
A. A security interest granted by the debtor.
B. A written promise from the debtor to pay the debt as agreed.
C. Audited financial statements of the debtor.
D. The debtor’s agreement to pay you first.

95) Which of the following terms is not required to be disclosed under the Truth-in-Lending Act?
A. The amount of attorneys fees to be charged if legal action is needed to collect the debt.
B. The number of payments.
C. The amount of late charges or delinquency penalties.
D. The date the finance charge begins to accrue.
E. The annual percentage rage of interest.

96) Which of the following lists, in descending priority, of sources considered by most courts in settling questions of international law?
A. Conventions, comity, customs, general principles of law
B. Conventions, treaties, comity, customs
C. Treaties, customs, conventions, comity
D. Treaties, customs, general principles of law, judicial decisions and teachings
E. Treaties, customs, conventions, comity

97) Generally speaking, the contract of a minor:
A. Is void.
B. Is not enforceable by the minor.
C. Is voidable at the minor’s option.
D. Must be in writing.

98) 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. Mexico, Venezuela
C. Great Britain, Paraguay
D. Canada, Mexico
E. Canada, Venezuela

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. $2; about 25
C. Less than $1; about 40
D. About $2; about 15
E. Less than $1; about 15

100) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
A. Mexico
B. China
C. Ecuador
D. Canada
E. Japan

 

 

Purchase

Bus 475 Final Exam Questions
2014 Version
Data Set 4 – 100 Questions
BUS 475

1) These are selected account balances on December 31, 2008.

Land (location of the corporation’s office building) $100,000
Land (held for future use) 150,000
Corporate Office Building 600,000
Inventory 200,000
Equipment 450,000
Office Furniture 100,000
Accumulated Depreciation 300,000

What is the net amount of property, plant, and equipment that will appear on the balance sheet?
A. $950,000
B. $1,300,000
C. $1,600,000
D. $1,100,000

2) “Generally accepted” in the phrase generally accepted accounting principles means that the principles __________.
A. have been approved for use by the managements of business firms
B. have been approved by the Internal Revenue Service
C. have substantial authoritative support
D. are proven theories of accounting

3) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
The net income (or loss) for the period is __________.
A. not determinable
B. $10,000 loss
C. $10,000 income
D. $48,000 income

4) These are selected account balances on December 31, 2008.
Land (location of the corporation’s office building) $150,000
Land (held for future use) 225,000
Corporate Office Building 900,000
Inventory 300,000
Equipment 675,000
Office Furniture 150,000
Accumulated Depreciation 450,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
A. $1,425,000
B. $1,950,000
C. $2,400,000
D. $1,650,000

5) The first step in activity-based costing is to __________.
A. identify the cost driver that has a strong correlation to the activity cost pool
B. assign manufacturing overhead costs for each activity cost pool to products
C. identify and classify the major activities involved in the manufacture of specific products
D. compute the activity-based overhead rate per cost driver

6) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A. 2,133 units
B. 4,600 units
C. 6,200 units
D. $25,600

7) Sam’s Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A. $8,250
B. $5,250
C. $750
D. $4,500

8) A well-designed activity-based costing system starts with __________.
A. analyzing the activities performed to manufacture a product
B. assigning manufacturing overhead costs for each activity cost pool to products
C. computing the activity-based overhead rate
D. identifying the activity-cost pools
9) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000

Closing entries are necessary for __________.
A. permanent or real accounts only
B. permanent accounts only
C. both permanent and temporary accounts
D. temporary accounts only

10) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A. The western division’s vice president’s salary
B. Factory janitor
C. Cost of landscaping the corporate office
D. General corporate liability insurance

11) The cost of an asset and its fair market value are __________.
A. the same on the date of acquisition
B. never the same
C. the same when the asset is sold
D. irrelevant when the asset is used by the business in its operations

12) One of Astro Company’s activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
A. $90,000
B. $150,000
C. $60,000
D. $75,000

13) The cost principle is the basis for preparing financial statements because it is __________.
A. the most accurate measure of purchasing power
B. a conservative value
C. relevant and objectively measured, and verifiable
D. an international accounting standard

14) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Additional information
B. Adjusted trial balance
C. Comparative balance sheets
D. Current income statement

15) To move the allocation of resources closer to the social optimum, policymakers should typically try to induce firms in an oligopoly to __________.
A. cooperate rather than compete with each other
B. collude with each other
C. form various degrees of cartels
D. compete rather than cooperate with each other

16) 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. can be larger or smaller than the price effect
B. must dominate the price effect
C. must be smaller than the price effect
D. must balance with the price effect

17) The price of a good that prevails in a world market is called the
A. world price.
B. absolute price.
C. relative price.
D. comparative price.

18) A country’s consumption possibilities frontier can be outside its production possibilities frontier if __________.
A. the country imports more than it exports
B. the country’s technology is superior to the technologies of other countries
C. the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries
D. the country engages in trade

19) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.
A. double the quantity supplied
B. less than quantity supplied
C. greater than quantity supplied
D. equal to quantity supplied

20) If a binding price ceiling were imposed in the computer market, __________.
A. the quality of computers would increase
B. the supply of computers would decrease
C. the demand for computers would increase
D. a shortage of computers would develop

21) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.
A. plus the cost of tuition, equals the opportunity cost of going to college
B. should be counted only to the extent that they are more expensive at college than elsewhere
C. should be counted in full, regardless of the costs of eating and sleeping elsewhere
D. usually exceed the opportunity cost of going to college

22) In the market for foreign-currency exchange in the open economy macroeconomic model, the amount of net capital outflow represents the quantity of dollars __________.
A. demanded for the purpose of importing foreign goods and services
B. supplied for the purpose of buying assets abroad
C. supplied for the purpose of selling assets domestically
D. demanded for the purpose of buying U.S. net exports of goods and services

23) The part of the balance of payments account that records the amount of foreign currency the government buys or sells is the:
A. balance of trade.
B. financial and capital account.
C. current account.
D. government financial account.

24) The balance of payment account is made up of:
A. a monetary account and a fiscal account.
B. an import account and an export account.
C. a current account and a financial and capital account.
D. an investment account and a consumption account.

25) The model of aggregate demand and aggregate supply explains the relationship between __________.
A. real GDP and the price level
B. unemployment and output
C. the price and quantity of a particular good
D. wages and employment

26) The open-economy macroeconomic model includes __________.
A. neither the market for loanable funds or the market for foreign-currency exchange
B. only the market for foreign-currency exchange
C. only the market for loanable funds
D. both the market for loanable funds and the market for foreign-currency exchange

27) The principal lag for monetary policy __________.
A. is the time it takes for policy to change spending. The principal lag for fiscal policy is the time it takes to implement it
B. is the time it takes to implement policy. The principal lag for fiscal policy is the time it takes for policy to change spending
C. and fiscal policy is the time it takes for policy to change spending
D. and fiscal policy is the time it takes to implement policy

28) Which of the following best describes a mental image of a possible and desirable future state of the organization?
A. Horizontal communication
B. Vertical communication
C. Vision
D. Mission
E. Leadership

29) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a:
A. Parallel team
B. Project team
C. Working group
D. Work team
E. Project group

30) An invisible barrier that makes it difficult for certain groups, such as minorities and women, to move beyond a certain level in the organizational hierarchy is referred to as the:
A. Glass floor
B. Job enlargement concept
C. Glass ceiling
D. Black box theory
E. Job enrichment theory

31) The term used to refer to all kinds of differences including religious affiliation, age, disability status, economic class and lifestyle in addition to gender, race, ethnicity and nationality is:
A. Managerial ethics
B. Recruiting
C. Employment
D. Diversity
E. Selection

32) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity?
A. behavioral assessment
B. aptitude tests
C. integrity evaluations
D. intelligence tests
E. work sampling

33) To be competitive in a global economy, Europeans must increase their level of:
A. Financial subsidy
B. Philanthropic contributions
C. Productivity
D. Population density
E. Espionage activity

34) Teams that operate separately from the regular work structure and exist temporarily are known as:
A. Transnational teams
B. Management teams
C. Self-managed teams
D. Self-designing teams
E. Parallel teams

35) A manager’s ability to stimulate people to be high performers is referred to as:
A. Supervising
B. Planning
C. Controlling
D. Leading
E. Organizing

36) The best way for an employer to find out if a potential employee can do a job is by __________.
A. using a performance simulation test
B. using the interview process
C. administering an IQ test
D. having them spend a day in the office
E. using a written test

37) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A. All entrepreneurs need venture capital in order to get started
B. Anyone can start a business
C. Successful entrepreneurs take very careful, calculated risks
D. Money should not be considered a start-up ingredient
E. Entrepreneurs are their own bosses and completely independent

38) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.
A. Less than $1; about 40
B. Less than $1; about 15
C. $2; about 25
D. Less than $1; about 25
E. About $2; about 15

39) One of the most important contributors to total quality management has been the introduction of statistical tools to analyze the causes of product defects in an approach called:
A. Organic
B. Six Sigma Quality
C. Mechanistic
D. ISO 9000
E. Total quality integration

40) __________ is the process of working with people and resources to accomplish organizational goals.
A. Supervising
B. Planning
C. Decision making
D. Controlling
E. Management

41) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A. Staffing
B. Planning
C. Organizing
D. Controlling
E. Goal Coordination

42) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Assuming b1 is significant, if Income decreases by 1000 we would predict that Crime will __________.
A. increase by 428
B. decrease by 50
C. increase by 500
D. increase by 50

43) Sampling error can be reduced by __________.
A. none of the these affect sampling error
B. increasing the sample size
C. decreasing the sample size
D. utilizing simple random samples

44) Use the following table to answer question:
P(M A) is approximately _____.
A. .25
B. .125
C. .625
D. .50

45) Use the following table to answer question:
Are Service provider and county independent events?
A. Insufficient information to determine
B. Yes
C. No

46) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least representative of the “typical” student?
A. Midrange
B. Mean
C. Median
D. Mode

47) Jolly Blue Giant Health Insurance (JBGHI) is concerned about rising lab test costs and would like to know what proportion of the positive lab tests for prostate cancer are actually proven correct through subsequent biopsy. JBGHI demands a sample large enough to ensure an error of ± 2% with 90% confidence. What is the necessary sample size?
A. 2,401
B. 609
C. 1,604
D. 1,692

48) Which one of the following statements concerning production and staffing plans is best?
A. The impact of production and staffing plans cuts across several functional areas of the firm.
B. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated.
C. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another.
D. When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time.

49) Likely reasons for inaccurate control limits would include which of the following?
A. Process variation was not zero, as expected.
B. The engineers were underpaid for their work.
C. The engineering parameter for variance is unknown.
D. There was insufficient preliminary sampling.

50) The one-worker, multiple machines approach functions as:
A. a way to create uniform workstation loads.
B. a production bottleneck.
C. a one-person production line.
D. a poka-yoke device.

51) In an activity-on-node [AON] network, the nodes represent ____________, whereas the arcs represent ____________.
A. precedence relationships; time
B. activities; precedence relationships
C. activities; time
D. events; activities

52) While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:
A. you would lose $80 if one of your workers missed an entire 8 hour shift.
B. you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.
C. the next worker that offers to work an extra 8 hours should receive at least $80.
D. you would be willing pay up to $60 for someone to work another 6 hours.

53) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could deploy.
A. None of these
B. Globalization 2.0
C. Globalization 1.0
D. Globalization 3.0

54) In the _____ phase of the decision making process, managers test potential solutions “on paper.”
A. consideration
B. design
C. choice
D. intelligence
E. implementation

55) A set of programs that enable the hardware to process data is _____.
A. procedures
B. database
C. software
D. network
E. hardware

56) What is _____ is not necessarily _____.
A. Ethical, legal
B. Unethical, illegal
C. Ethical, illegal
D. Unethical, legal
E. Illegal, unethical

57) The Global, Web-Based Platform enables individuals to do which of the following?
A. all of these are true
B. produce and sell goods and services
C. exchange knowledge
D. access information, services, and entertainment
E. connect, compute, communicate, collaborate, and compete everywhere and all the time

58) The management cockpit best exemplifies which type of system?
A. Group decision support system
B. Functional area information system
C. Digital dashboard
D. Expert system
E. Decision support system

59) _____ is the acquisition and efficient use of resources in accomplishing organizational goals.
A. Wisdom
B. Expertise
C. Strategic planning
D. Management control
E. Operational control

60) International Game Technology’s new ERP system produced all of the following benefits except:
A. Operations employees were able to access manufacturing process details at their workstations
B. The company gained flexibility in manufacturing products
C. ERP system connected the company’s global operations
D. Company was able to maintain its original business processes
E. Integrated the company’s business functions

61) Which of the following are not provided by digital dashboards?
A. Exception reporting
B. Key performance indicators
C. Status access
D. Transaction processing
E. Drill down

62) _____ provides users with a view of what is happening, where _____ addresses why it is happening.
A. Multidimensional data analysis, data mining
B. Multidimensional data analysis, neural networks
C. Data mining, expert system
D. Data mining, multidimensional data analysis
E. Multidimensional data analysis, structured query language

63) An increase in future value can be caused by an increase in the __________.
A. dividends paid
B. rate of return
C. original amount invested
D. starting value
E. annual interest rate and number of compounding periods

64) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt 8%
Cost of preferred stock 12%
Cost of common stock 16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A. $1,568
B. $463
C. $1,241
D. $871

65) Disadvantages of using current liabilities as opposed to long-term debt include:
A. certainty of interest costs
B. greater risk of illiquidity, and uncertainty of interest costs
C. decreased risk of liquidity
D. uncertainty of future liabilities
E. higher cash flow exposure

66) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock?
A. 15.62%
B. 20.62%
C. 14.37%
D. 9.37%

67) Dublin International Corporation’s marginal tax rate is 40%. It can issue three-year bonds with a coupon rate of 8.5% and par value of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $23 per bond in flotation costs. Determine the approximate after-tax cost of debt for Dublin International to use in a capital budgeting analysis.
A. 9.2%
B. 5.1%
C. 8.5%
D. 6.0%

68) Forward rates are quoted:
A. on financial statements
B. in direct form and at a premium or discount
C. by the FDIC
D. in an indirect form
E. daily

69) Tri State Pickle Company preferred stock pays a perpetual annual dividend of 2 1/2% of its par value. Par value of TSP preferred stock is $100 per share. If investors’ required rate of return on this stock is 15%, what is the value of per share?
A. $6.00
B. $37.50
C. $16.67
D. $15.00

70) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A. The project’s IRR would have to be less that the firm’s discount rate.
B. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
C. Under all conditions, the project’s payback would be less than the profitability index.
D. The project would add value to the firm.

71) According to the hedging principle, permanent assets should be financed with _____ liabilities.
A. fixed
B. permanent
C. current
D. spontaneous

72) Exchange rate risk:
A. doesn’t affect trades made in US Dollars.
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. has been phased out due to recent international legislation.

73) The common stockholders are most concerned with:
A. the spread between the return generated on new investments and the investor’s required rate of return.
B. the percentage of profits retained.
C. the size of the firm’s beginning earnings per share.
D. the risk of the investment.

74) 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.

75) You hold a portfolio with the following securities:
Security Percent of Portfolio Beta Return
X Corporation 20% 1.35 14%
Y Corporation 35% .95 10%
Z Corporation 45% .75 8%
Compute the expected return and beta for the portfolio.
A. 9.9%, .94
B. 10.67%, 1.02
C. 9.9%, 1.02
D. 34.4%, .94

76) Economists’ economic-buyer theory assumes that __________.
A. consumers only want the cheapest price
B. buyers logically compare choices in order to maximize their satisfaction
C. demographic data are very useful for predicting consumer behavior
D. consumers should purchase only low-priced products
E. consumers always make rational decisions

77) 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. the economic-buyer theory
B. reference groups
C. psychographics
D. needs
E. competitive advantage

78) The three basic tasks of ALL managers, according to the text, are:
A. planning, implementation, and control.
B. marketing, production, and finance.
C. planning, staffing, and evaluating.
D. execution, feedback, and control.
E. hiring, training, and compensating.

79) A cluster analysis of the “toothpaste market” would probably show that:
A. most consumers are concerned about cost.
B. most consumers are mainly concerned about brightness of teeth.
C. the broad product-market can be served effectively with one marketing mix.
D. factors such as taste, price, and “sex appeal” are not important.
E. different market segments seek different product benefits.

80) “Marketing strategy planning” means:
A. selecting a target market and developing a marketing strategy.
B. finding attractive opportunities and selecting a target market.
C. finding attractive opportunities and developing profitable marketing strategies.
D. selecting an attractive target market.
E. selecting an attractive marketing mix.

81) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called:
A. market planning.
B. marketing strategy planning.
C. marketing programming.
D. management by objective.
E. strategic (management) planning.

82) Regarding organizational buying, the people who have the power to select or approve the supplier–especially for larger purchases–are called:
A. users.
B. buyers.
C. deciders.
D. influencers.
E. gatekeepers.

83) The economists’ view of buyers:
A. None of these are true
B. assumes that they always buy the lowest-price alternative.
C. is based on the idea that consumers value time and select the first alternative they learn about.
D. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers.
E. emphasizes psychological variables rather than social influences.

84) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A. Customer relationship management (CRM)
B. Market scanning
C. Positioning
D. Brand familiarity
E. Market segmentation

85) When evaluating macro-marketing:
A. one must consider the society’s role in the marketing system.
B. one must determine how efficiently the society’s resources are used.
C. the best approach is to consider the profit generated by individual firms within the overall system.
D. the evaluation is necessarily subjective.
E. one must consider each individual firm’s role in the marketing system.

86) Marketing:
A. not important if you have a good product.
B. reflects existing social values in the short run–while reinforcing these values in the long run.
C. turns consumers into puppets.
D. creates materialistic values which did not exist before.
E. is only propaganda.

87) Clustering techniques applied to segmenting markets __________.
A. doesn’t apply to demographic data
B. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers
C. remove the need for managerial judgment
D. usually require computers to group people based on data from market research
E. is time consuming and expensive

88) Product disparagement differs from defamation of a nonpublic figure in that:
A. Intent is only required in a disparagement case.
B. Publication to a third party is required in the defamation case, but not in the disparagement case.
C. Publication to a third party is required in the disparagement case, but not in the defamation case.
D. Intent is required for the disparagement case, but not in the defamation case.
E. Intent is required for the defamation case, but not in the disparagement case.

89) Mary arrived at work one day, and her boss said to her, “That’s the ugliest dress I have ever seen. Because you wore that to work today, you are fired.” Assuming that Mary is an at-will employee, which of the following is true?
A. Mary can be fired only if it is in the best interest of the employer.
B. If none of the exceptions to the at-will rule apply, Mary can be fired.
C. If Mary has the will to work, she cannot be fired without cause.
D. Mary can be fired for any reason.

90) Which of the following is correct about interpretive rules?
A. Interpretive rules are not subject to judicial review.
B. All federal administrative agencies have implied power to make interpretive rules.
C. They must be accompanied by substantive rules.
D. They do not establish new law.
E. They require public notice and participation to create.

91) In responding to a constitutional challenge to the Computer Decency Act, the U.S. Supreme Court ruled that:
A. The Internet was similar to television and that restrictions similar to those on television programming were appropriate.
B. The Act was unconstitutional because its provisions were too vague to define.
C. Obscene materials could not be available between 6:00 a.m. and 10:00 p.m. local time.
D. Computers and the Internet were not covered by the free speech provisions of the U.S. Constitution because they did not exist when the Constitution was drafted.
E. The Act was constitutional because obscene speech receives no protection.

92) In a criminal proceeding, what is the difference between an indictment and an information?
A. An indictment requires proof beyond a reasonable doubt, but an information does not.
B. A grand jury issues an indictment, but does not issue an information.
C. Guilt or innocence is determined in an indictment, but not in an information.
D. The defendant is charged with a crime in an indictment, but not in an information.

93) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
A. Corporate social audit.
B. Corporate citizenship.
C. Stakeholder interest.
D. Maximizing profits.
E. Moral minimum.

94) If a minor wishes to be bound to a contract after becoming an adult, she must:
A. Bring an action to verify the contract.
B. Give back the goods or services received as a minor.
C. Disaffirm the contract.
D. Ratify the contract.

95) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.
A. Less than $1; about 40
B. Less than $1; about 15
C. About $2; about 15
D. Less than $1; about 25
E. $2; about 25
96) Information which comes to the knowledge of an agent is:
A. Will result in termination of the agency arrangement if it is not communicated to the principal.
B. Required to be communicated to the principal in all circumstances.
C. Is imputed to the principal.
D. Can be disclosed to the principal only with the third party’s consent.

97) Which of the following is true about “proof of claims?”
A. They can generally be filed any time within one year of the filing of the bankruptcy petition.
B. They must be field by both secured and unsecured creditors in order for the creditor to receive a distribution from the bankruptcy estate.
C. They need not be filed by secured creditors whose security covers the amount of their debt.
D. They are never used by secured creditors.

98) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States’ second largest trading partner.
A. Great Britain, Paraguay
B. Canada, Venezuela
C. Canada, Mexico
D. Mexico, Canada
E. Mexico, Venezuela

99) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
A. Ecuador
B. Japan
C. Canada
D. Mexico
E. China

100) Which of the following statements is true regarding the relationship of law and ethics?
A. Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.
B. The legal requirements will almost always be the same as the ethical requirement because the law is based on the ethical standards.
C. In some cases ethics will require a higher standard of conduct than the law, but never vice versa.
D. In some cases the law will require a higher standard of conduct than ethics, but never vice versa.

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