Mgt 465 week 5 final examination

1.      Return on sales is also known as:

a.      Return on investment                    

b.      Profit margin

c.       Cost of goods sold

d.      None of the above


2.      One way for a business to raise the capital it needs to grow it finance with:

a.      Earnings

b.      Debt

c.       Equity

d.      All of the above


3.      An example of a company where revenue is primarily from the production of a tangible product is:

a.      Ford Motor Company

b.      Ernst & Young

c.       Massage Envy

d.      Netflix


4.      One disadvantage of corporations is that their profits are subject to double-taxation, taxed once on the corporate level and again when investors receive their share of profits.

a.      True

b.      False


5.      Examples of variable costs include:

a.      Commissions

b.      Shipping

c.       Cost for materials

d.      All of the above


6.      Payment of a percentage of the revenue generated by the sale of each unit is known as:

a.      Royalty

b.      Franchise

c.       Diversification

d.      Line extension


7.      Which kind of company acts as a middleman, buying goods from a manufacturer and selling them on to a retailer?

a.      Retail

b.      Wholesale

c.       Manufacturing

d.      Service


8.      A cash flow statement provides the same information as an income statement.

a.      True

b.      False


9.      A company codifies its reason for existence in the form of a:

a.      Performance objective

b.      Mission statement

c.       Profit statement

d.      None of the above


10.  What is the final step in the employee recruitment process?

a.      Salary negotiation

b.      Hiring

c.       Orientation

d.      None of the above


11.  In 2013, Ken invested $20,000 in his company.  In the same year, his net profits were $3,500.  What was his annual ROI in 2013?

a.      17.5%

b.      5.7%

c.       1.75%

d.      57.1%


12.  A free enterprise system  is also known as:

a.      Economics

b.      Market system

c.       Production economy

d.      Free-trade system


13.  The opposite of the skimming strategy of pricing is the:

a.      Penetration strategy

b.      Skimming strategy

c.       Meet-or-beat the competition

d.      Cost-plus

14.  A reward for becoming an entrepreneur is:

a.      Control over time

b.      Control over compensation

c.       Control over  working conditions

d.      All of the above


15.  Lee has $255,000 in current assets and $175,000 in current liabilities.  How much working capital does she have?

a.      $85,000

b.      $430,000

c.       $80,000

d.      None of the above


16.  How often should you rebalance your investment portfolio?

a.      Monthly

b.      Bi-annually

c.       Annually

d.      Every three years


17.  Net worth is also known as owner’s equity.

a.      True

b.      False


18.  Franchising and licensing are examples of what kind of strategies?

a.      Harvest

b.      Diversification

c.       Replication

d.      None of the above


19.  Which of the following telephone behaviors is NOT a hallmark of a successful salesperson?

a.      Waiting to offer solution or products until later in the call.

b.      Letting the customer talk less than you do.

c.       Asking the right questions.

d.      None of the above.


20.  Using orders as a unit of sale is most commonly associated with which kind of business?

a.      Retail

b.      Wholesale

c.       Manufacturing

d.      Service


21.  The giving of resources to charities in an effort to help solve a social or environmental problem is known as:

a.      Philosophy

b.      Mission

c.       Philanthropy

d.      Vision Statement


22.  If furniture store buys a sofa from the wholesaler for $600 and sells it for $2,500, what is the retailer’s gross profit per unit?

a.      $3,100

b.      25%

c.       $1,900

d.      4.16


23.  Four out of five small firms fail in the first five years of operation.

a.      True

b.      False


24.  According to the principle of compounding interest, if you invest $1.00 at 10 percent over five years, how much will you have at the end of those five years? 

a.      $1.50

b.      $1.61

c.       $1.51

d.      $1.10


25.  Which one of the following is NOT one of the five roots of opportunity?

a.      Problems

b.      Inventions

c.       Competition

d.      None of the above