1. Leverage ratios indicate the extent to which ________ has been used to fund a business's operations.
a. debt
b. equity
c. owner invested capital
d. profit
2. The process of ________ uses a firm's accounts receivable as collateral for a loan.
a. establishing a line of credit
b. inventory financing
c. pledging
d. revolving credit
3. Brand __________ refers to the loyalty, perceived quality, and emotions people associate with a given brand name.
a. equity
b. identification
c. positioning
d. ownership
4. Your firm is a supplier to a major chain of discount stores. You have heard rumors that this chain of discount stores is in some financial difficulty. Which financial ratios would indicate the discount stores' ability to pay their short-term debts?
a. liquidity ratios
b. leverage ratios
c. activity ratios
d. profitability ratios
5. According to the product life cycle model, profits tend to:
a. remain relatively constant until the decline stage, when they begin to drop.
b. reach a peak near the end of the maturity stage.
c. rise rapidly during the market preference stage.
d. peak before sales reach their highest level.
6. __________ is the term used to describe the use of outside firms to help move their goods through the supply chain.
a. Third party logistics
b. Multilevel distribution
c. External logistics
d. Mediated distribution
7. According to the boxed material entitled "Reaching Beyond Our Borders" in Chapter 18, which of the following describes international factoring?
a. Middlemen ensure that the seller receives the payment from a foreign buyer.
b. A company sells its future accounts receivables to a lending bank to finance their export activities.
c. A company borrows money from an international banker, pledging inventories held in more than one country as collateral.
d. An intermediary financial institution issues shares of ownership to investors in different countries.
8. Virtual Electronics is considering a strategy to charge a very high introductory price for their automobile video theater. After identifying that their rival firms did not carry this new product, they chose this pricing strategy to achieve maximum profits. Virtual Electronics has chosen a ________ strategy.
a. high-low pricing
b. penetration
c. bundling
d. skimming
9. A promissory note that requires the borrower to repay the loan in specified installments is called a(n):
a. repayment scheduling.
b. term loan agreement.
c. amortization installment.
d. revolving line of credit
10. Sports Coasters sells good quality athletic wear by sending its customers a catalog nine times a year. The company has no retail stores, but offers a toll free order number that operates 24 hours a day, 365 days a year. Sports Coasters sells using a technique known as:
a. tel-tailing.
b. indirect marketing.
c. telemarketing.
d. multilevel marketing.
11. Long-term financing would normally be used to purchase:
a. supplies.
b. inventory.
c. buildings.
d. highly liquid assets.
12. A major concern for firms selling on credit is:
a. the realization that many credit customers always pay their bills.
b. the large amount of assets tied up in accounts receivable.
c. the resulting increase in the debt ratio for the firm.
d. the inability to utilize factoring as a source of financing.
13. The main way __________differ from agents is that they do not develop long-term relationships with the buyers or sellers they assist.
a. brokers
b. rack jobbers
c. wholesalers
d. sales discounters
14. Rather than requiring cash payment for all sales, some firms offer credit to:
a. keep current customers happy and attract new customers.
b. improve the organization's cash flow position.
c. match revenues with expenses for the same time period.
d. replace accounts receivable with fixed assets.
15. Sales of cellular phones are still increasing, but the rate of growth has slowed. Sales are expected to peak later this year. Based on this information, cellular phones are in what stage of the product life cycle?
a. introduction
b. growth
c. maturity
d. decline
16. Placing ads in newspapers and having knowledgeable salespeople to answer customers' questions are ways marketing intermediaries can provide:
a. form utility.
b. possession utility.
c. time utility.
d. information utility.