BUS 475 Final Exam 100 MCQs (A+ Work) Set 01

BUS 475 Final Exam

1) Which one of the following is a product cost?

2) Lucy starts her own psychiatric practice, but her expenditures to open the practice exceed her income. Lucy is a __________.

3) Of the following companies, which one would not likely employ the specific identification method for inventory costing?

4) Which one of the following items is not generally used in preparing a statement of cash flows?

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 __________.

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 __________.

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 __________.

13) Balance sheet accounts are considered to be __________.

A.   nominal accounts

B

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?

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 __________.

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:

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:

32) __________ is the process of working with people and resources to accomplish organizational goals.

A.   Supervising

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:

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:

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

37) The basic components of an effective sexual harassment policy include the following EXCEPT:

A.   To act immediately when employees complain of sexual harassment

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?

completely independent

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; timeB.   events; activitiesC.   activities; timeD.   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 theseB.   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 privacyB.   An individual’s right to privacy is absoluteC.   It is difficult to determine and enforce privacy regulationsD.   An individual’s right to privacy supersedes the needs of societyE.   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 servicesB.   connect, compute, communicate, collaborate, and compete everywhere and all the time

C.   access information, services, and entertainmentD.   exchange knowledgeE.   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 maintainB.   amount of data stays about the same over timeC.   data are scattered throughout organizationsD.   decreasing amount of external data needs to be consideredE.   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.   implementationB.   choice

C.   designD.   intelligenceE.   consideration

57) When customers access a Web site and make purchases, they generate __________.

A.   Web dataB.   Tracking cookiesC.   InformationD.   Clickstream dataE.   Hyperlink data

58) _____ is the efficient and effective execution of specific tasks.

A.   ExpertiseB.   Operational controlC.   Management controlD.   Strategic planningE.   Wisdom

59) Geocoding is __________.

A.   integrating organizational transactions with spatially oriented databasesB.   integrating maps with spatially oriented databases and other databasesC.   encrypting spatial informationD.   accessing geographical informationE.   programming spatially oriented databases

60) Information-based industries are most susceptible to which one of Porter’s five forces?

A.   threat of substitute productsB.   bargaining power of suppliersC.   bargaining power of customersD.   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 productsB.   Integrated the company’s business functionsC.   Company was able to maintain its original business processesD.   ERP system connected the company’s global operationsE.   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 miningB.   Expert systemsC.   Neural networksD.   Multidimensional data analysisE.   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.   $570B.   $900C.   -$150D.   $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.   $871B.   $1,241C.   $1,568D.   $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.   $15.00B.   $16.67C.   $6.00D.   $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.   spontaneousB.   currentC.   fixedD.   permanent

71) Bondholders have a priority claim on assets ahead of:

A.   shareholders.B.   investorsC.   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 sheetB.   Income statementC.   Quarterly statementD.   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 Corporation20%     1.35     14%

Y Corporation35%     .95       10%

Z Corporation45%     .75       8%

Compute the expected return and beta for the portfolio.

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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?

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?