1) _____ is the acquisition and efficient use of resources in accomplishing organizational goals.
A. Operational control
B. Management control
C. Wisdom
D. Expertise
E. Strategic planning
2) Which of the following statements about information systems is not correct?
A. Information systems are concentrated in the IS Department.
B. Information systems tend to follow the structure of the organization.
C. Managing information systems is difficult.
D. Any information system can be strategic.
E. Information systems are based on the needs of employees.
3) PepsiCo calculates unlevered betas for each peer group in order to:
A. eliminate different business risks.
B. eliminate competitive factors.
C. eliminate different financial risks.
D. eliminate judgment factors.
4) 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. $871
D. $1,241
5) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A. at equilibrium.
B. overvalued.
C. undervalued.
D. a good buy.
6) Bondholders have a priority claim on assets ahead of:
A. creditors.
B. common and preferred stockholders.
C. shareholders.
D. investors
7) Mortgage bonds:
A. can only be issued by financial institutions.
B. are a type of debenture.
C. are secured by a lien on real property.
D. usually pay little or no interest.
8) 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. -$150
B. $490
C. $570
D. $900
9) 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. 28%
B. 48%
C. 40%
D. 32%
10) According to the hedging principle, permanent assets should be financed with _____ liabilities.
A. fixed
B. permanent
C. spontaneous
D. current
11) An increase in future value can be caused by an increase in the __________.
A. dividends paid
B. starting value
C. original amount invested
D. rate of return
E. annual interest rate and number of compounding periods
12) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?
A. 8%
B. 6%
C. 5%
D. 7%
13) Disadvantages of using current liabilities as opposed to long-term debt include:
A. certainty of interest costs
B. uncertainty of future liabilities
C. higher cash flow exposure
D. decreased risk of liquidity
E. greater risk of illiquidity, and uncertainty of interest costs
14) 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, less
B. more, more
C. more, less
D. less, more
15) What is the yield to maturity of a nine-year bond that pays a coupon rate of 20% per year, has a $1,000 par value, and is currently priced at $1,407? Round your answer to the nearest whole percent and assume annual coupon payments.
A. 11%
B. 5%
C. 14%
D. 12%
16) Good marketing strategy planners know that:
A. target markets cannot be large and spread out.
B. target marketing does not limit one to small market segments.
C. mass marketing is often very desirable and effective.
D. the terms "mass marketing" and "mass marketer" mean basically the same thing.
E. firms like Nabisco and Wal-Mart are too large to aim at clearly defined target markets.
17) 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 programming.
C. strategic (management) planning.
D. marketing strategy planning.
E. management by objective.
18) 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. consumers always make rational decisions
D. consumers should purchase only low-priced products
E. demographic data are very useful for predicting consumer behavior
19) The economists' view of buyers:
A. None of these are true
B. is based on the idea that consumers value time and select the first alternative they learn about.
C. emphasizes psychological variables rather than social influences.
D. assumes that they always buy the lowest-price alternative.
E. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers.
20) The basic objective of the U.S. market-directed economic system is to:
A. make the most efficient use of the country's resources.
B. satisfy consumer needs as they--the consumers--see them.
C. achieve an annual growth rate of at least 10 percent.
D. provide each person with an equal share of the economic output.
E. minimize inflation.
21) Coca-Cola is taking advantage of the new willingness of Chinese leaders to engage in international trade by marketing its soft drinks in China. What type of opportunity is Coke pursuing?
A. test marketing
B. diversification
C. market penetration
D. product development
E. market development
22) In an effort to increase its total sales, Champion has started exporting its spark plugs for use by several German auto producers. Champion is pursuing a _____ opportunity.
A. market development
B. market penetration
C. mass marketing
D. product development
E. diversification
23) A firm's "marketing mix" decision areas would NOT include:
A. Place.
B. People.
C. Product.
D. Price.
E. Promotion.
24) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A. is always emotional.
B. is always based on competitive bids from multiple suppliers.
C. is even less predictable.
D. leans basically toward economy, quality, and dependability.
E. is strictly economic and not at all emotional.
25) When evaluating macro-marketing:
A. one must consider the society's role in the marketing system.
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 each individual firm's role in the marketing system.
E. the evaluation is necessarily subjective.
26) "Marketing strategy planning" means:
A. selecting a target market and developing a marketing strategy.
B. finding attractive opportunities and selecting a target market.
C. selecting an attractive target market.
D. selecting an attractive marketing mix.
E. finding attractive opportunities and developing profitable marketing strategies.
27) 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. 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. GDP measures show the degree of competition in a market.
E. GDP measures show people's tendency to buy particular products.
28) In which of the following are these steps of a criminal case listed in the correct order?
A. Arrest, indictment, trial, arraignment
B. Arrest, indictment, arraignment, trial
C. Indictment, arraignment, arrest, trial
D. Arrest, arraignment, indictment, trial
E. Arraignment, arrest, trial, indictment