BUS 475 Capstone Final Exam Answers

http://homework-elance.com/downloads/bus-475-capstone-final-exam-answers/
Or Visit Our Website
Visit : http://homework-elance.com/
Email Us : homeworkelance@gmail.com

Bus 475 Capstone Final Exam Part 2

1. Which of the following is the most important factor that affects a firms financing
mix?
2. The predictability of cash flows
3. The number of shares that are outstanding
4. The amount of EPS
5. The amount of operating income

2. When an accountant makes an adjusting entry for accrued expenses, which

statement best reflects what the accounts look like before the adjustment?
3. Assets overstated; expenses understated
4. Assets understated; revenues understated
5. Expenses understated; liabilities understated
6. Liabilities overstated; revenues understated

3. Which account will have a zero balance after a company has journalized and posted
closing entries?
4. Accumulated Depreciation

5. Prepaid Insurance
6. Service Revenue
7. Supplies

4. A __________ is an articulation of a simple criterion or characterization of what the

leader sees the company must become to establish and sustain global leadership.
5. mission
6. leaders principle
7. leaders vision
8. strategic intent

5. The market opportunities most relevant to a particular company are those that
6. Offer the best growth and profitability.
7. Provide avenues for taking market share away from close rivals.
8. Hold the most potential for product innovation.
9. Provide a strong defense against threats to the companys profitability.

6. Internal control is used in a business to enhance the accuracy and reliability of its
accounting records and to
7. Analyze financial statements.
8. Create a system of audit review.
9. Safeguard its assets.
10. Protect investments by the public.

7. What principle dictates that efforts (expenses) be recorded with results (revenues)?
8. Periodicity principle
9. Expense recognition principle
10. Cost principle
11. Revenue recognition principle

8. The Oviedo Thespians are planning to present performances of their Florida Revue
on two consecutive nights in January. It will cost them $5,000 per night for theater
rental, event insurance, and professional musicians. The theater will also take 10%
of gross ticket sales. How many tickets must they sell at $10.00 per ticket to break
even?
9. 1,223 tickets
10. 1,112 tickets
11. 1000 tickets
12. There is not enough information.

9. Which of the four basic financial statements adds net income and subtracts
dividends to arrive at its key data element at the end of each period?
10. Balance Statement
11. Retained Earnings Statement
12. Income Statement
13. Statement of Cash Flows

10. H&R Block wants to analyze its clients tax returns over the past 10 years for each
of the clients tax filings. The type of data generated will be ______________.
11. time series data

12. observation data

13. meta data
14. cross-sectional data

11. A distribution center for a chain of electronics supply stores fills and ships orders to
retail outlets. A random sample of orders is selected as they are received and the
dollar amount of the order (in thousands of dollars) is recorded, and then the time
(in hours) required to fill the order and have it ready for shipping is determined. A
scatterplot showing the times as the response variable and the dollar amounts (in
thousands of dollars) as the predictor shows a linear trend. The least squares
regression line is determined to be: y= 0.76 +1.8x. A plot of the residuals versus the
dollar amounts showed no pattern, and the following values were reported:
Correlation r + 0.90; R 2 = 0.81; standard deviation of the residuals is 0.48. What
percentage of the variation in the times required to prepare an order for shipping is
accounted for by the fitted line?
12. 48%
13. 81%
14. 90%
76%

12. National Printing Equipment (NPE) produces equipment that helps to print
newspapers and magazines. The company sells directly to printers and through
wholesalers. Its salespeople negotiate prices with individual customers and often
have to match competitors prices. NPE has a new product, the Gutenberg NP201,
with some competitive advantages now, but competitors are expected to follow
quickly with similar products. The new product is being introduced into a market
with elastic demand. In regard to freight charges for its equipment, NPEs invoice
reads, Seller pays the cost of loading equipment onto a common carrier. At the
point of loading, title to such products passes to the buyer, who assumes
responsibility for damage in transit, except as covered by the transportation
agency.
National Printing Equipments new Gutenberg NP201 should probably use
________________.
1. introductory pricing

2. price fixing
3. penetration pricing
4. skimming pricing

13. __________ is the intentional coordination of every communication from a firm to a

target customer to convey a consistent and complete message.
14. Integrated marketing communications
15. Online marketing
16. Product positioning
17. Digital marketing

14. Identifying and assessing a companys resource strengths and weaknesses and its
external opportunities and threats is called a __________________.
15. strategic resource assessment
16. competitive asset/liability analysis
17. SWOT analysis
18. competitive positioning analysis

15. Suppose Stock A has had a mean price of $6.58 per share with a standard deviation
of $1.88, while Stock B has had a mean price of $10.57 per share with a standard
deviation of $3.02. Which stock shows a higher coefficient of variation or volatility?
16. Stock B
17. Stock A
18. Both stocks have the same coefficient of variation.
19. The coefficients are incomparable.

16. Which of the following will decrease the nominal deficit?

17. An increase in the debt
18. An increase in interest rates
19. An increase in government expenditures
20. An increase in taxes

17. When predicting grade point average from the number of hours spent studying per
week, the equation for the best fit line was found to be y = 0.0855x + 0.944. What is
the predicted grade point average of a student that studies 26 hours per week?
18. 25
19. 2.99
20. 3.17
21. 24.63

18. The main reason that vertical marketing systems are becoming more common is
that
19. Firms increasingly understand that competition among channel members is profitable.
20. It is easy for multiple firms to coordinate a single marketing mix for a common target
market.
21. Firms realize that working independently has advantages for channel members.
22. Firms recognize that coordination among channel members can increase sales for
each channel member.

19. The appropriate alternative hypothesis for a two-tail test to determine if mean body
weight of all the men who have joined a health club is the same as 185 pounds would
be

20. Ho: = 185 lbs.

21. Ho: ? 185 lbs.
22. Ho: > 185 lbs.
23. Ho: = 185 lbs.

20. Segmenting, in contrast to combining,

21. Usually means settling for a smaller sales potential.
22. Tends to focus more on customer similarities than on differences.
23. Relies more on promotion appeals and minor product differences to create general
customer appeal among several submarkets.
24. Tries to identify homogeneous submarkets and develop different marketing mixes
for each submarket.

21. Which of the following statements about ethical behavior in business is true?
22. The legal environment sets the minimum standards of ethical behavior.
23. The legal environment sets the highest standards of ethical behavior.
24. The legal environment sets the maximum standards of ethical behavior.
25. The legal environment sets the normative standards of ethical behavior.
26. What is the present value of $12,500 to be received 10 years from today? Assume a
discount rate of 8% compounded annually and round to the nearest $10.
27. $5,790
28. $17,010
29. $9,210
30. $11,574

23. The following is an example of an unethical action committed by ABC, Inc.s

accountant, Fred Anderson.
24. Anderson records income using the cash basis of accounting, contrary to GAAP.
25. Anderson causes $200 in ABC, Inc. merchandise to be shipped to him for free.
26. Andersons recording of amortization is audited by an independent auditor.
27. Andersons supervisor asks him to inflate income for the current period to make the
company appear more profitable.

24. A survey of 134 cell phone users yielded the data found in the table below. The table
compares gender and type of phone.

Male
Female
Total

iPhone
57
36
93

Non-iPhone
23
18
41

Total
80
54
134

If a customer is randomly selected based on this survey data, what is the probability that
the customer is a female with an iPhone? (Round your answer to 3 decimal places).
1. 0.269
2. 0.481
3. 0.333
4. 0.387

25. The overriding goal of a control system is to enable the __________ and __________
of the business.
26. process, development
27. survival, long-term success
28. invention, entrepreneurship

29. improvement, diversification

26. One reason for international investment is that

27. Raw materials are typically cheaper in other countries than in the U.S.
28. The economies of many countries are growing faster than that of the U.S.
29. Doing business in foreign countries is simpler than in the U.S.
30. price-earnings (P/E) ratios are higher in foreign countries

27. If XYZ Co. had 100 units of beginning inventory valued at $15 per unit in January,
purchased an additional 100 units of inventory in February at $16 per unit, and
additional 100 units of inventory in May at $19 per unit, what would the unit cost of
ending inventory be under each of the three inventory methods (assuming that XYZ
only sold 79 units during this time frame)?
28. $15 under FIFO, $19 under LIFO, $16.6 under average cost
29. $19 under FIFO, $15 under LIFO, $17 under average cost
30. $19 under FIFO, $15 under LIFO, $16.6 under average cost
31. $15 under FIFO, $19 under LIFO, $17 under average cost

28. P. Noels Inc.s current ratio is 2. Current liabilities are $500,000. P. Noels current
assets equal __________ and net working capital is __________.
29. $500,000 and $1,000,000
30. $1,000,000 and $500,000
C.$500,000 and $250,000
1. $500,000 and $500,000

29. The DMAIC (define, measure, analyze, improve, control) process is relevant to

30. CCC21.
31. Six Sigma.
32. Balanced scorecard.
33. Strategic matrix analysis.

30. A correlation value of r = 0.5 between the x-variable and y-variable means
31. There is no linear relationship between x and y.
32. There is a moderate positive linear relationship between x and y.
33. There is a strong positive linear relationship between x and y.
34. There is no relationship between x and y.

31. Cargill, Inc. is finally earning a profit on the unique product it introduced 6 months
ago. Cargills advertising is both informative and persuasive. Much money is being
spent on place development. There is little price competition, although several
competitors have come out with reasonable imitations. Total industry sales and
profits are both rising. In which stage of the product life cycle is Cargill operating?
32. Market introduction
33. Market maturity
34. Sales decline
35. Market growth

32. Under the percentage of receivables method, the allowance for a doubtful accounts
balance will occasionally have a debit balance due to write-offs that occur during
the year, which exceed the previous provisions for bad debts. In such cases, what
must a company do to this account?
33. Make an adjusting entry by subtracting the debit balance from the required balance.
34. Allow the debit balance to carry over to future periods.

35. Create a second allowance for doubtful accounts balance with a credit balance.
36. Make an adjusting entry by adding the debit balance to the required balance.

33. If a countrys trade deficit increases, then

34. It must be buying more assets from foreigners.
35. Its consumption must be falling relative to its production.
36. It must be selling fewer assets to foreigners.
37. Its consumption must be rising relative to its production.

34. In horizontal analysis, each item is expressed as a percentage of the following:

35. Net income amount
36. Total assets amount
37. Stockholders equity amount
38. Base year amount

35. Which of the following financial instruments entails the most risk and potentially
the highest returns for investors?
36. Preferred stock
37. Bonds
38. Debt with a maturity of less than 1 year
39. Common stock

36. Strategic management involves the _________, directing, _________ and controlling
of a companys strategy-related decisions and actions.

37. marketing; planning

38. financing; marketing
39. planning; organizing
40. planning; financing
41. Mitch Companys ending inventory is understated by $4,000. The effects of this
error on the current years cost of goods sold and net income, respectively, are
42. Overstated and overstated.
43. Understated and understated.
44. Understated and overstated.
45. Overstated and understated.

38. In the stockholders equity section of the balance sheet, the cost of treasure stock is
deducted from the following:
39. Total stockholders equity
40. Common stock in paid-in capital
41. Retained earnings
42. Total paid-in capital and retained earnings

39. Which of the following statements best describes the modern view of marketing?
40. Marketing anticipates customer needs.
41. Marketing begins as soon as products are produced.
42. Marketing consists mainly of advertising and personal selling.
43. Marketing is only necessary for profit-oriented firms.

40. Penn Corp. acquired a truck to haul widgets between its manufacturing facility and
its sales offices. Penn acquired the truck for $55,000. Penn sold the truck years later
for $15,000. Before the year of the sale, Penn had depreciated the asset by $32,000.
Penn depreciated the truck by another $2,000 during the year it was sold. Does Penn
record gain or loss on the sale and how much?
41. Loss of $19,000
42. Loss of $17,000
43. Gain of $8,000
44. Gain of $6,000

41. Organizational requirements to support and sustain differentiation activities include

which of the following:
42. frequent, detailed control reports
43. tradition of closeness to key customers
44. incentives based on meeting strict, quantitative targets
45. structured organization and responsibilities

42. In what situations are notes payable used in lieu of accounts payable?
43. To provide short-term financing, for collection of debt purposes, and to pay off the debt
quicker
44. To create better credit, incur liability over a shorter time frame, and acquire additional
financing for different lines of business
45. To give the lender formal proof of the obligation, for collection of debt purposes, and
to require the borrower to pay interest
46. Because other financing is not available, to facilitate business relationship with other
companies, and to improve goodwill

43. Metals Corp. has $2,575,000 of debt, $550,000 of preferred stock, and $18,125,000 of
common equity. Metals Corp.s after-tax cost of debt is 5.25%, preferred stock has a
cost of 6.35%, and newly issued common stock has a cost of 14.05%. What is Metals
Corp.s weighted average cost of capital?
44. 8.32%
45. 12.78%
46. 10.84%
47. 6.56%

44. Ethnic markets are becoming more important to marketers because

45. The median age of Asian, African, and Hispanic Americans is much higher than that of
White Americans.
46. The buying power of ethnic submarkets is decreasing.
47. The number of ethnic consumers is growing at a much faster rate than the overall society
48. They make a clear segment with similar backgrounds and common language,
religion, and culture.

45. Woodstock Inc. expects to own a building for 5 years, and then sell it for $1,500,000
net of taxes, sales commissions, and other selling costs. Woodstocks cost of capital is
11%. How much will the sale of the building contribute to the NPV of the project?
46. $890,177
47. $1,500,000
48. $2,527,587
49. $1,351,351

46. To decrease the nations money supply, the Fed can

47. Decrease reserve requirements.

48. Increase reserve requirement.

49. Buy government securities in the open market.
50. Decrease the discount rate.

47. To arrive at net cash provided by operating activities, the statement of cash flows
prepared by the indirect method starts with net income and then adds or deducts
various items. In making this calculation, the following items are added to net
income under the indirect method:
48. Depreciation expense, gain on the sale of plant assets, and increase in current liability
account
49. Patent amortization expense, increase in current asset account, and decease in current
asset account
50. Gain on the sale of plant asset, increate in current asset account, and decrease in current
liability account
51. Depletion expense, loss on the sale of plant assets, and patent amortization expense

48. Organizational requirements to support and sustain cost leadership are

49. Tradition of closeness to key customers.
50. Some personnel skilled in sales and operations.
51. Frequent, detained control reports.
52. Subjective measurements and incentives.

49. A random sample of 81 team leaders and supervisors from Fortune 500 companies
revealed that on average a person spent 6.5 years on the job before being promoted.
The standard deviation of the sample was 1.7 years. Assuming that the population
standard deviation is unknown, the 99% confidence interval within which the
population mean lies is approximately between ___________ and _________years.
50. 6 and 7

51. 5.5 and 6.5

52. 5.5 and 7.5
53. 5.5 and 6.5

50. in the long-run framework, budget surpluses

51. Should never be run since they crowd out investment in the short run.
52. Should be run on a permanent basis since they boost saving and investment and stimulate
economic growth.
53. Should be run whenever output dips below potential output.
54. Are better than budget deficits over the long run because unlike budget deficits,
they increase saving and investment.