1. BUS 475 Final Exam 2
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1) Which one of the following items is not generally used in preparing a statement of
cash flows?
2) 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?
3) Of the following companies, which one would not likely employ the specific
identification method for inventory costing?
4) Which one of the following is a product cost?
5) The conceptual framework developed by the Financial Accounting Standards
Board __________.
6) What is the preparation of reports for each level of responsibility in the company’s
organization chart called?
7) The cost principle requires that when assets are acquired, they be recorded at
__________.
8) If a company reports a net loss, it __________.
9) The major reporting standard for management accounts is __________.
10) The primary purpose of the statement of cash flows is to __________.
11) Managerial accounting __________.
12) A well-designed activity-based costing system starts with __________.
13) Balance sheet accounts are considered to be __________.
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?

2. 15) There are two types of markets in which firms face some competition yet are still
able to have some control over the prices of their products. The names given to
these market structures are __________.
16) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
17) A tax on an imported good is called a __________.
18) Lucy starts her own psychiatric practice, but her expenditures to open the
practice exceed her income. Lucy is a __________.
19) One characteristic of an oligopoly market structure is:
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 __________.
21) When a firm sells a good or a service, the sale contributes to the nation’s income
__________.
22) The open-economy macroeconomic model includes __________.
23) Most economists use the aggregate demand and aggregate supply model
primarily to analyze __________.
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 __________.
25) Which of the following is not correct?
26) The Federal Reserve will tend to tighten monetary policy when __________.
27) Which of the following statements about GDP is correct?
28) The most dominant areas in the global economy include:
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:
30) A leader is:
31) Teams that operate separately from the regular work structure and exist
temporarily are known as:

3. 32) __________ is the process of working with people and resources to accomplish
organizational goals.
33) An organization that is managed aggressively and has growth and high profits as
primary objectives may be considered a(n):
34) A manager's ability to stimulate people to be high performers is referred to as:
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:
36) Having individuals actually do the job they are applying for as a test to see if they
can do it is __________.
37) The basic components of an effective sexual harassment policy include the
following EXCEPT:
38) The best way for an employer to find out if a potential employee can do a job is
by __________.
39) As related to managing of human resources, diversity refers to:
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:
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?
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?
43) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is
the p-value?
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 _____.

4. 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 _____.
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 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen
U.S. cities in 2005 with
of robberies in each city (thousands of robberies) and
of police force in each city (thousands of police)?
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?
48) In an activity-on-node [AON] network, the nodes represent ____________,
whereas the arcs represent ____________.
49) Theoretically, service capacity must exceed demand, lest queues become
infinitely long. If capacity does not exceed demand, what is likely to happen?
50) Queuing models use an A/B/C notation. What do these variables represent?
51) In a network diagram, an activity:
52) Suppose the estimated quadratic model + 20 t - t2 is the best-fitting trend of
sales of XYZ Inc. using data for the past twenty years (, 2,.., 20).
Which statement is incorrect?
53) Which of the following statements is correct?
54) The Global, Web-Based Platform enables individuals to do which of the
following?
55) It is very difficult to manage data for which of the following reasons?

5. 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.
57) When customers access a Web site and make purchases, they generate
__________.
58) _____ is the efficient and effective execution of specific tasks.
59) Geocoding is __________.
60) Information-based industries are most susceptible to which one of Porter’s five
forces?
61) International Game Technology’s new ERP system produced all of the following
benefits except
62) Credit card companies would most likely use which of the following to check for
fraudulent credit card use?
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.)
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?
65) The common stockholders are most concerned with:
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?
67) Which of the following is most consistent with the hedging principle in working
capital management?

6. 68) At what rate must $400 be compounded annually for it to grow to $716.40 in 10
years?
69) PepsiCo calculates unlevered betas for each peer group in order to:
70) According to the hedging principle, permanent assets should be financed with
_____ liabilities.
71) Bondholders have a priority claim on assets ahead of:
72) Which of the following represents an attempt to measure the earnings of the
firm’s operations over a given time period?
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
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?
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.
76) The managerial process of developing and maintaining a match between the
resources of an organization and its market opportunities is called:
77) Analysis of demographic dimensions:
78) When evaluating macro-marketing:

7. 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.
81) When doing "positioning," a marketing manager should:
82) In comparison to the buying of final consumers, the purchasing of organizational
buyers:
83) The clustering techniques that can be used in segmenting:
84) A firm's "marketing mix" decision areas would NOT include:
85) Comparing GDP for foreign countries can help a marketing manager evaluate
potential markets if the manager remembers that:
86) Regarding organizational buying, the people who have the power to select or
approve the supplier--especially for larger purchases--are called:
87) Clustering techniques applied to segmenting markets __________.
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?
89) Which of the following is correct about litigating commercial disputes?
90) Which article of the United States Constitution deals with the judicial power of
the federal government?
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?
92) Which of the following is true about the Sherman Act?

8. 93) If the value of the collateral is less than the debt owed to the secured party, then:
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:
95) Which of the following terms is not required to be disclosed under the Truth-in-
Lending Act?
96) Which of the following lists, in descending priority, of sources considered by
most courts in settling questions of international law?
97) Generally speaking, the contract of a minor:
98) Although the U.S. has had a longstanding agreement with _____ after the
passage of NAFTA, _____ became the United States' second largest trading partner.
99) One study found that manufacturing labor costs about _____ an hour in China,
compared to _____ dollars in the United States.
100) Which country does the text describe as becoming the largest producer and
consumer of many of the world's goods?
BUS 475 Final Exam 2
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