Professional Documents
Culture Documents
The cost of an asset and its fair market value are __________.
never the same
irrelevant when the asset is used by the business in its operations
the same on the date of acquisition
the same when the asset is sold
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 newlyconstructed 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
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)
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 firms 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 firms 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 projects IRR would have to be less that the firms discount rate.
B. The project would add value to the firm.
C. Under all conditions, the projects 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
investors required rate of return.
B. the size of the firms 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
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-inLending 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.
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