STR 581 Final Exam
1) Most established companies focus on ________ when it comes to innovation.
A. incremental innovation
B. continuous innovation
C. competitive innovation
D. everyday innovation
E. demand innovation
2) 3M, Hewlett-Packard, Lego, and other companies use the ________ to manage the innovation process.
A. stage-gate system
B. joint- venture system
C. skunk works
D. new product “team”
E. venture team
3) A company can take several steps to improve the quality of its marketing intelligence. If the company purchases competitive products for study, attends open houses and trade shows, and reads competitors’ published reports and stockholder information, the company is using ________ to improve the quality of its marketing intelligence.
A. sales force surrogates
C. customer feedback systems
D. external networks
E. advisory panels
4) Total customer satisfaction is the general feeling of pleasure or disappointment that results from comparing perceived performance to expectations. To achieve total customer satisfaction, organizations need to_____________.
A. Develop marketing campaigns
B. Spend more money
C. Lower prices
D. Manage customer experiences
E. Lower expectations
5) A(n) ________ is any good, service, or idea that is perceived by someone as new.
C. creative product
D. new idea
6) ________ is the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
A. Perceived usefulness
B. Failure avoidance rate
C. Competitors market share rate
D. Report rating
E. Customer perceived value
7) The value proposition consists of a cluster of benefits the company promises to deliver; it is
A. Customer loyalty to the company
B. customer experience with the company
C. business processes
D. total customer satisfaction
E. customer expectations
8) Purchase decisions are based on how consumers perceive prices and what they consider tobe the ________ price—not the marketer’s stated price.
A. current actual
B. last purchased price
C. referent price
D. current sale price
9) A ________ consists of a group of customers who share a similar set of needs and wants.
A. market target
B. market level
C. market segment
D. market slice
E. market group
10) ________ is the result of a concentrated effort by designers, engineers, and purchasing agents to reduce the product’s overall costs.
A. Learning curve
B. Experience curve
C. Least cost producer
D. Target costing
11) Companies normally budget marketing research at ________ percent of company sales.
A. 1 to 2
B. 10 to 12
E. 2 to 3
12) The following are considered to be advantages of online research EXCEPT ________.
A. online research is inexpensive
B. people tend to be more honest online than in other interviewing methods
C. online research is more versatile
D. online research is relatively free of technological problems and inconsistencies
E. online research is faster
13) Coca-Cola’s failure in promoting New Coke was largely due to a marketing research barrier identified as ________.
A. a narrow conception of the research
B. personality and presentation differences
C. late and occasional erroneous findings
D. poor framing of the problem
E. uneven caliber of researchers
14) Marketing communications can contribute to brand equity by establishing the brand in memory and to________ (in)a brand image.
A. create interest
C. create demand
15) New-to-the- world products are ________.
A. new products that create an entirely new market
B. existing products that are targeted to new markets or market segments
C. new products that provide improved performance or greater perceived value and replace existing products
D. new products that supplement established product lines (package sizes, flavors, and so on)
E. new products that allow a company to enter an established market for the first time
16) “Power prices” use price as a key strategic tool. These “power prices” have discovered the highly ________ effect of price on the bottom line.
17) A company can add new products through acquisition or development. The acquisition route can take three forms. The company can buy other companies, it can acquire patents from other companies, or it can buy a ________ or _________ from another company.
B. franchise/acquire rights
D. license/receive permission
18) Some intermediaries use the following: strategic planning, advanced information systems, sophisticated marketing tools, measure performance on a return-on-investment basis, segment their markets, improve their target marketing and positioning, and ________.
A. contend with dwindling customer bases
B. aggressively pursue market expansion and diversification strategies
C. dominant the manufacturers they do business with
D. aggressively pursue take over strategies
E. aggressively “squeeze” manufacturer margins
19) Price has operated as the major determinant of buyer choice among poorer nations, among poorer groups, and with ________ products.
D. over the Internet
20) Major retailer types include the following EXCEPT ________.
A. specialty store
C. the Internet
D. catalog showroom
E. discount store
21) ________ communicates a company’s intended value positioning of its product or brand to the market.
B. Physical evidence
22) To reach Generation Y, rock band Foo Fighters created a digital street team that sends targeted e-mail messages to members who “get the latest news, exclusive audio/video sneak previews, tons of chances to win great Foo Fighters prizes, and become part of the Foo Fighters Family.” Which of the following techniques for reaching Generation Y are the Foo Fighters using?
A. Student ambassadors
B. Cool events
C. Online buzz
D. Unconventional sports
E. Computer games
23) Following the ________ approach to target market selection encompasses a strong knowledge of the segment’s needs, a strong market presence, and operating economies through specializing in production, distribution, and promotion.
A. single-segment concentration
B. product specialization
C. full market coverage
D. selective specialization
E. market specialization
24) _____ bargaining is negotiation that seeks to divide a “fixed pie.”
25) The traditional view of conflict is the belief that conflict is _____.
26) John Kotter’s view argues that management focuses on coping with complexity, whereas leadership focuses on coping with _____.
27) Danielle wants to become a surgeon, not only because achieving this goal will give her self-respect and autonomy, but also because she wants a job with high status and recognition from others. Which of Maslow’s needs is Danielle trying to fill?
28) If no one is aware of conflict, it is generally agreed that _____.
A. employee-employer relations will be good
B. no conflict exists
C. conflict is psychologically driven as opposed to physically manifest
D. conflict is subversive
E. conflict is inevitable
29) Which level of Maslow’s hierarchy of needs deals with satisfying one’s hunger, thirst, and need for sex?
30) Negotiation can be defined as a process in which two or more parties exchange goods or services and attempt to agree upon _____.
A. the exchange rate for those goods and services
B. a model of the negotiation process for resolving differences
C. the monetary value of the exchanged items
D. acceptable bargaining strategies for obtaining the goods and services
E. effective arbitrators for disputes
31) _____ can be used to increase the perception that employees are treated fairly.
A. Selective evaluation
B. Multiple raters
C. Focusing on subjective evaluations
D. Due process
E. Documenting with a journal
32) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity?
A. intelligence tests
B. work sampling
C. behavioral assessment
D. integrity evaluations
E. aptitude tests
33) Examples of on-the-job training include all of the following except _____.
A. job rotation
B. simulation centers
C. formal mentoring programs
E. understudy assignments
34) Between the late 1960s and the mid-1980s, the use of written tests declined because they were characterized as _____.
D. mathematically flawed
35) Examples of off-the-job training include all of the following except _____.
A. classroom lectures
B. apprenticeship programs
C. public seminars
E. Internet courses
36) Each of the six personality types developed in Holland’s personality-job fit theory has a ________.
A. supplemental personality style
B. congruent personality style
C. supplemental occupational environment
D. supplemental skill set
E. congruent occupational environment
37) _____ developed a Vocational Preference Inventory questionnaire that contains 160 occupational titles.
38) Organizational structure has six key elements. Which of the following is not one of these elements?
D. location of authority
E. work specialization
39) Phrases such as “more cultural diversity,” “many new entrants with inadequate skills,” and “increase in aging workers” are all examples of what force for change?
B. world politics
C. social trends
E. nature of the work force
40) Investors bragged about their investing expertise during the stock market rally between 1996 and early 2000, then blamed analysts, brokers, and the Federal Reserve when the market imploded in 2000. These investors were most probably guilty of what?
A. fundamental attribution error
B. self-serving bias
D. selective perception
E. the halo effect
41) The phenomenon of magnification of demand variability as we move from the customer to the producer in the supply-chain is referred to as the:
A. postponement effect
B. Elasticity of demand
C. price deflator
D. Just-in-time approach
E. bullwhip effect
42) According to Goldratt and Fox, a useful performance measure to treat inventory is ______.
A. inventory turnover
B. current ratio
C. dollar days
D. quick ratio
43) Which of the following statements are true about time-series forecasting?
A. Time series analysis is based on the idea that the history of occurrences over time can be used to predict the future.
B. Time series analysis tries to understand the system underlying and surrounding the item being forecast.
C. Time series methods are useful for long-range forecasts when the demand pattern is erratic
D. Under time-series methods, demand is divided into the time-based components such as daily, weekly, etc.
44) Operations stage toolkit for the Data Analysis and Solution Development phase include(s): I. SPC tools II. Bottleneck analysis III. Computer simulation IV. Balanced scoreboard
A. I and II
B. II and III
C. II, III, and IV
D. I, II, III, and IV
E. I, II, III
45) The last stage in the operations consulting process is:
A. presenting final report
B. implementing changes
C. assembling learning from the stage
D. assuring client satisfaction
46) An investor’s risky portfolio is made up of individual stocks. Which of the following statements about this portfolio is true?
A. Each stock in the portfolio has its own beta.
B. Selling any stock in this portfolio will lower the beta of the portfolio.
C. Each stock in the portfolio will have a beta greater than one.
D. An investor cannot change the risk of this portfolio by her choice about personal leverage (lending or borrowing).
47) Which of the following statements is true?
A. The Principle of Incremental Benefits says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs.
B. The Principle of Valuable Ideas suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law.
C. The Time Value of Money Principle advises to include any time-value-of-money tax benefits from capital structure choices.
D. all of these
48) “Hard” capital rationing refers to the rationing __________.
A. imposed by external factors
B. imposed internally by the shareholders
C. always imposed by debt holders
D. always imposed by competitors
49) __________ says to look for opportunities to invest in positive-NPV projects in foreign markets or to develop derivatives or design arrangements that enable firms to cope better with the risks they face in their foreign operations.
A. The Principle of Valuable Ideas
B. The Principle of Capital Market Efficiency
C. The Principle of Risk-Return Trade-off
D. The Principle of Diversification
50) __________ says to seek out investments that offer the greatest expected risk-adjusted real return.
A. The Principle of Valuable Ideas
B. The Principle of Self-Interested Behavior
C. The Principle of Incremental Benefits
D. The Signaling Principle
51) Which of the following statements is true?
A. The Principle of Capital Market Efficiency says to consider the possible ways to minimize the value lost to capital market imperfections, such as asymmetric taxes, asymmetric information, and transaction costs.
B. The Behavioral Principle suggests to look for opportunities to create value by issuing securities that are in short supply, perhaps resulting from changes in tax law.
C. The Signaling Principle says to consider any possible change in capital structure carefully, because financing transactions and capital structure changes convey information to outsiders and can be misunderstood.
D. all of these
52) Due to asymmetric information, the market fears that a firm issuing securities will do so when the stock is _________.
A. being sold by insiders
B. caught up in a bear market
53) A checking account is __________.
A. a place to “collect” money between inflows and outflows
B. an account that acts like a reservoir
C. useful because you can add money in any amount
D. all of these
54) __________ says to recognize the value of hidden options in a situation, such as the foreign exchange options in some derivative instruments.
A. The Time Value of Money Principle
B. The Principle of Two-Sided Transactions
C. The Options Principle
D. The Principle of Comparative Advantage
55) An all-equity-financed firm would __________.
A. pay corporate income taxes if its taxable income is positive
B. not pay corporate income taxes because it would have no interest expense.
C. not pay any income taxes because interest would exactly offset its taxable income.
D. pay corporate income taxes because it would have interest expense.
56) __________ says to use derivatives to pay others to take risks.
A. The Principle of Self-Interested Behavior
B. The Principle of the Time Value of Money
C. The Principle of Two-Sided Transactions
D. The Signaling Principle
57) __________ says that if you transfer risk to another party, you must offer a return that fully compensates for the amount of risk transferred.
A. The Principle of Self-Interested
B. The Principle of Incremental Benefits
C. The Behavioral Principle
D. The Risk-Return Trade-Off Principle
58) Which of these investments would you expect to have the highest rate of return for the next 20 years?
A. anybody’s guess
B. intermediate-term U.S. government bonds
C. U.S. Treasury bills
D. long-term corporate bonds
59) __________ says to recognize the value of options contained in derivatives.
A. The Principle of Comparative Advantage
B. The Options Principle
C. The Principle of Valuable Ideas
D. The Capital Market Efficiency Principle
60) The managerial decision best addresses which of the following questions?
A. How fast should we grow?
B. What size of firm do we want?
C. How should we compensate our managers?
D. all of these
61) The financing decision best addresses which of the following questions?
A. Should we give employees stock options?
B. Should we increase our inventory?
C. Should we buy this piece of land?
D. Should we issue common stock or convertible debt?
62) Which of the following is (are) true?
A. The Principle of Capital Market Efficiency states that differences between financial assets are measured primarily in terms of risk and return. Investors choose the highest return for a given risk level.
B. The Principle of Comparative Advantage states that people apply the Principles of Self-Interested Behavior, Two-Sided Transactions, and Signaling to an environment characterized by similar financial assets, low transaction costs, and intense competition leads to capital market efficiency.
C. The Principle of Valuable Ideas states that new ideas can provide value when first introduced, even in an efficient capital market.
D. all of these answers are correct.
63) Which of the following is not an advantage of going public?
A. Going public achieves liquidity and diversification for current shareholders
B. Going public generally brings a lower price in the public market than in the venture capital or private placement markets.
C. Going public enables a firm to raise additional capital.
D. Going public gives existing shareholders a chance to sell portions of their shares as part of the IPO giving them a cash return on their investment and allows them to diversify their investment portfolios.
64) You work for ABC, Inc. in the finance department. You own shares in ABC, Inc. that are selling at $20 per share on the NYSE. You just found out they will have a new stock offering. You just found out they will publicly announce a new stock offering. The costs from the offering will be 10% of the new offering. The new offering will increase the number of outstanding share by 30%. There are currently 20,000,000 shares of ABC outstanding. Once the announcement is made public, what might be the expected impact from transaction (or issuance) costs on each share you own?
A. You will lose 3% of the value of the share you own.
B. You will lose 2% of the value of the shares you own.
C. There will be no costs because markets are perfect when it comes to new stock offerings.
D. There will be no costs because there is no information asymmetry present.
65) Undertaker Corporation has a joint process that produces three products: P, G, and A. Each product may be sold at split-off or processed further and then sold. Joint processing costs for a year amount to $25,000. Other relevant data are as follows:
Product Sales Value at Split-off Processing Costs after Split-off Sales Value at Completion
P $62,000 $5,000 $88,000
G 12,500 6,500 19,000
A 9,400 5,000 12,000
Product G _____.
A. an be processed further or sold at split off; there is no difference in profit.
B. should be processed further to increase profits by $19,000.
C. should be processed further to increase profits by $6,500.
D. should be sold at split off since processing further would only reduce profits by $6,500.
66) The opportunity cost of an alternate course of action that is relevant to a make-or-buy decision is
A. subtracted from the “Make” costs.
B. Added to the “Make” costs.
C. added to the “Buy” costs.
D. none of these
67) It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 2,000 scales. If the special order is accepted, what will be the effect on net income?
A. $30,000 increase
B. $4,000 decrease
C. $4,000 increase
D. $6,000 decrease
68) Which one of the following characteristics would likely be associated with a just-in-time inventory method?
A. An understanding with customers that they may come to the showroom and select from inventory on hand.
B. A backlog of inventory orders not yet shipped.
C. Ending inventory of work in process that would allow several production runs.
D. Minimal finished goods inventory on hand.
69) Baden Company manufactures a product with a unit variable cost of $50 and a unit sales price of $88. Fixed manufacturing costs were $240,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $70 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:
A. Income would increase by $20,000
B. Income would increase by $4,000.
C. Income would decrease by $4,000.
D. Income would increase by $70,000.
70) Efficiency is indicated by _____.
A. all of these answers are correct
B. static-budget variances
C. sales-activity variances
D. flexible-budget variances
71) Which of the following does not appear as a separate section on the cash budget?
B. Cash disbursements
C. Cash receipts
D. Capital expenditures
72) Beginning cash balance plus total receipts
A. is the excess of available cash over disbursements.
B. must equal total disbursements.
C. equals ending cash balance.
D. equals total available cash.
73) A _____ gives the expected sales under a given set of conditions.
A. sales forecast
B. sales budget
C. sales prediction
D. budget forecast
74) At the break-even point of 2,000 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?
A. Not enough information
75) How much sales are required to earn a target income of $80,000 if total fixed costs are $100,000 and the contribution margin ratio is 40%?
76) A company requires $1,020,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $180,000. What is the target net income?
77) At the break-even point of 2,500 units, variable costs are $55,000, and fixed costs are $32,000. How much is the selling price per unit?
78) A well-designed activity-based costing system starts with
A. analyzing the activities performed to manufacture a product.
B. computing the activity-based overhead rate.
C. identifying the activity-cost pools.
D. assigning manufacturing overhead costs for each activity cost pool to products.
79) An absorption-costing income statement separates cost into the major categories of_____.
A. all of these answers are correct
B. product and period
C. manufacturing and nonmanufacturing
D. inventoriable and noninventoriable
80) The last step in activity-based costing is to
A. identify the cost driver that has a strong correlation to the activity cost pool.
B. assign manufacturing overhead costs for each activity cost pool to products.
C. compute the activity-based overhead rate per cost driver.
D. identify and classify the major activities involved in the manufacture of specific products.
81) Identify which of the following statements about “perfection standards” is true.
A. All of these answers are correct
B. It is generally believed that they have a negative influence on employee morale.
C. They are expressions of the most efficient performance possible.
D. They usually result in unfavorable variances.
82) Jack and Jill form a partnership. Jack runs the business in New York, while Jill vacations in Hawaii. During the time Jill is away from the business, Jack increases the debts of the business by $20,000. Which of the following statements is true regarding this debt?
A. Neither Jack nor Jill is personally liable for the business debt, since the partnership is a separate legal entity.
B. Only Jack is personally liable for the debt, since he has been the managing partner during that time.
C. Only Jill is personally liable for the debt of the business, since Jack has been working and she has not.
D. Both Jack and Jill are personally liable for the business debt.
83) A local retail shop has been operating as a sole proprietorship. The business is growing and now the owner wants to incorporate. Which of the following is not a reason for this owner to incorporate?
A. the ease in transferring shares of the corporation’s stock
B. ability to raise capital for expansion
C. desire to limit the owner’s personal liability
D. the prestige of operating as a corporation
84) The _____ is not one of the three major financial statements.
A. statement of equity position
B. statement of cash flows
C. income statement
85) Financial statements are helpful to predict the future performance of a company for all of the following reasons except _____.
A. past performance is often a good indicator of future performance
B. the evaluation of management’s past performance gives clues to its ability to generate future returns
C. the assets and liabilities of a company provide clues to a company’s future prospects
D. financial statements are required to give formal projections of management’s assessment of the next period’s financial results
86) Diversity training programs are generally intended to provide a vehicle for _____.
A. socializing otherwise unmanageable employees
B. increasing awareness and examining stereotypes
C. focusing on individual differences
D. balancing work/life conflicts
E. eliminating group learning
87) Although the U.S. has had a longstanding agreement with ___________, after the passage of NAFTA, _________ became the United States’ second largest trading partner.
A. Canada, Venezuela
B. Canada, Mexico
C. Mexico, Canada
D. Mexico, Venezuela
E. Great Britain, Paraguay
88) The centerpiece of most diversity programs is _____.
A. employee satisfaction
B. top management commitment
C. employee commitment
D. human resource personnel
89) Which social responsibility theory has been advocated by Novel Prizewinning economist Milton Friedman?
A. Corporate social audit
B. Maximizing profits
C. Moral minimum
D. Corporate citizenship
E. Stakeholder interest
90) Which country does the text describe as becoming the largest producer and consumer of many of the world’s goods?
91) Which article of the United States Constitution deals with the judicial power of the federal government?
A. Article V.
B. Article I.
C. Article II.
D. Article IV.
E. Article III.
92) Which of the following is correct about litigating commercial disputes?
A. In all states, commercial disputes must be heard in a limited-jurisdiction court.
B. Nearly all states have specialized trial courts that hear commercial disputes.
C. Commercial disputes, because of their specialized nature, are first heard at the appellate court level.
D. Businesses generally dislike the concept of specialized trail courts for commercial disputes because the large numbers of consumers who sue businesses in these courts have led the judges to become generally biased against business.
E. A few states have established specialized trial courts for commercial disputes.
93) When an economist says that the demand for a product has increased, this means that:
A. the demand curve becomes steeper.
B. consumers respond to a lower price by buying more.
C. quantity demanded is greater at each possible price.
D. firms make less of the product available for sale.
94) If consumer incomes increase, the demand for product Y will _____________.
A. shift to the right if Y is a normal good
B. shift to the right if Y is a complementary good
C. necessarily remain unchanged
95) The force behind globalization in _____ was the amount of muscle, horsepower, wind power, or steam power that a country could deploy.
A. None of these
B. Globalization 3.0
C. Globalization 1.0
D. Globalization 2.0
96) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A. physical, digital
B. digital, physical
C. e-commerce, digital
D. digital, e-commerce
E. physical, financial
97) The Global, Web-Based Platform enables individuals to do which of the following?
A. all of these answers are correct
B. exchange knowledge
C. connect, compute, communicate, collaborate, and compete everywhere and all the time
D. access information, services, and entertainment
E. produce and sell goods and services
98) A ________ has been defined as being a coordinated collection of data, systems, tools, and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.
A. database management system
B. marketing decision support system
C. marketing information system
D. marketing intelligence system
E. marketing research system
99) Which of the following statements is true concerning the applicability of attitudes in understanding behavior?
A. A single, global measure of attitude is necessary to predict behavior
B. Cognitive attitudes influence behavior better than affective-based attitudes
C. General attitudes are the best predictors of behavior
D. Behavior is affected equally by those attitudes formed via social learning and those formed via behavioral learning
100) The use of a(n) _____ serves as a comparison to assess the existence and potency of the manipulation.
A. Field experiment
B. Criterion variable
C. Experimental group
D. Control group
E. Explanatory variable