ETS MAJOR FIELD TEST IN BUSINESS WITH 100% ACCURATE SOLUTIONS ALREADY GRADED A+

In marketing research, a firm might consider using secondary data over primary data because

a) secondary data usually cost less

b) secondary data are usually more accurate

c) primary data are usually non specific

d) primary data are likely to be outdated

a) secondary data usually cost less

In organizational decision making, managers are able to exercise the greatest degree of discretion in the

a) enforcement of internal policies

b) settlement of legal disputes

c) restructuring of outstanding loans

d) compliance with federal regulations

a) enforcement of internal policies

The term "net working capital" refers to

(A) inventories, receivables, and current notes and investments

(B) assets divided by liabilities

(C) current assets less short-term liabilities

(D) net assets left over after subtracting cost of goods sold

(C) current assets less short-term liabilities

Dreamland Pillow Company sells the "Old Softy" model for $20 each. One pillow requires two pounds of raw material and one hour of direct labor to manufacture.

Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents its factory on a five-year lease for $4,000 per month. All costs are considered costs of production.

How many pillows must Dreamland produce and sell each month to earn a monthly gross profit of $1,000?

(A) 300

(B) 350

(C) 600

(D) 700

(D) 700

VC = (2 lbs*$3)+$4 = $10

FC = $2,000+$4,000 = $6,000

CM per unit = $20-(VC) $10=$10

$1,000 = (units sold*$10)-$6,000

Units sold = ($1,000+$6,000)/$10 = 700 pillows

Dreamland Pillow Company sells the "Old Softy" model for $20 each. One pillow requires two pounds of raw material and one hour of direct labor to manufacture.

Raw material costs $3 per pound and direct production labor is paid $4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents its factory on a five-year lease for $4,000 per month. All costs are considered costs of production.

Another firm has offered to produce "Old Softy" pillows and sell them to Dreamland for $12 each. Dreamland cannot avoid the factory lease payments, but can avoid all labor costs if it does not produce these pillows. Under these conditions, how many "Old Softy" pillows must Dreamland sell to earn monthly gross profits of $1,000?

(A) 417

(B) 500

(C) 625

(D) 875

(C) 625

Dreamland VC per unit = $12

FC = $4,000

CM per unit = $20-(VC) $12=$8

(GP) $1,000 = (units sold*$8)-$4,000

Units sold = ($1,000+$4,000)/$8 = 625 pillows

Which of the following statements about a systems flowchart is true?

(A) It is used in systems design to define and describe each piece of data.

(B) It is a method of writing programs using only three basic constructs: sequence, selection, and repetition.

(C) It documents the sequence of processing steps that take place in an information system.

(D) It documents the logical design of an information system.

(D) It documents the logical design of an information system.

Which of the following statements about the tort of negligence is true?

(A) It cannot be used as a basis for liability for defective products.

(B) It is a strict liability tort with no defenses.

(C) It requires proof of some intentional conduct.

(D) It requires proof of breach of a statutory or common-law duty.

(C) It requires proof of some intentional conduct.

On May 31, Company O's general ledger shows a cash balance of $5,123. The May 31 bank statement shows a balance of $4,905. Other information is available as follows:

1. A May 31 deposit of $300 does not appear on the bank statement; but a $3 service charge does.

2. A customer's $40 insufficient funds check has been returned with the bank statement.

3. Outstanding checks of $10, $15, and $100 are identified on May

What is the correct cash balance on May 31?

(A) $4,905

(B) $5,080

(C) $5,166

(D) $5,204

(B) $5,080

Cash Balance 5,123.00

Service charge (3.00)

NSF Check from customer (40.00)

Correct cash balance 5,080.00

Within the context of the capital asset pricing model (CAPM), the risk measure known as beta is often computed by regressing the return of the company's stock against the

(A) return on the company's bonds

(B) return on the market portfolio

(C) change in the gross domestic product

(D) change in the consumer price index

(B) return on the market portfolio

A project consists of 150 jobs. The expected completion time for each job is given in days. The project has three critical paths with two jobs in common, J and K. In order to finish the project one day early, the completion time should be reduced one day for

(A) each of the 150 jobs

(B) each of the jobs on the three critical paths

(C) either Job J or Job K

(D) both Job J and Job K

(C) either Job J or Job K

The Organization of the Petroleum Exporting Countries (OPEC) reduces production by 10 percent, and the growth rate of the world economy begins to escalate. How will the simultaneous occurrence of these events affect the equilibrium price and quantity in the world petroleum market?

(A) Price will increase, but quantity will remain unchanged.

(B) Price will increase, but quantity is indeterminate.

(C) Quantity will increase, but price is indeterminate.

(D) Both price and quantity will increase.

(B) Price will increase, but quantity is indeterminate.

Which of the following would most likely occur as a result of the United States government's imposing tariffs on foreign steel imports?

(A) The price of steel produced in the United States would decrease.

(B) The price of imported steel in the United States would decrease. (C) Employment in the United States steel industry would increase. (D) Government tax revenue would fall.

(C) Employment in the United States steel industry would increase.

In an economy the unemployment rate is 10 percent and the inflation rate is 1 percent. An appropriate fiscal policy in this phase of the business cycle would be to

(A) increase government spending

(B) increase income taxes

(C) decrease transfer payments

(D) decrease the money supply

(A) increase government spending

Which of the following is an appropriate Federal Reserve action to stimulate the United States economy?

(A) Selling government bonds on the open market

(B) Increasing the discount rate

(C) Reducing the reserve requirement

(D) Cutting taxes

(C) Reducing the reserve requirement

If the spread between the spot and forward exchange rates of two currencies equals the interest rate difference between the two countries, this phenomenon is referred to as

(A) purchasing-power equality

(B) commodity arbitrage

(C) currency hedging

(D) interest-rate parity

(D) interest-rate parity

A firm that would like to know whether it has enough cash to meet its bills would be most likely to use which category of financial ratio?

(A) Liquidity

(B) Leverage

(C) Efficiency

(D) Profitability

(A) Liquidity

In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory value and the lowest net income figure?

(A) First in, first out (FIFO)

(B) Last in, first out (LIFO)

(C) Weighted average

(D) Standard cost

(B) Last in, first out (LIFO)

In the statement of cash flows, the section for cash flows from operating activities will include which of the following?

(A) Dividends paid

(B) Issuance of common stock

(C) A decrease in accounts payable

(D) Purchase of a building financed entirely by a mortgage

(C) A decrease in accounts payable

Net income $100,000

Depreciation expense $10,000

Net increase in accounts receivable $5,000

Net increase in accounts payable $3,000

On the basis of the information provided in the table above for a corporation, the corporation's net cash flow from operating activities for the current year is

(A) $98,000

(B) $102,000

(C) $108,000

(D) $118,000

(C) $108,000

Net profit 100,000

Add: Non cash Exp (Dep) 10,000

Less: Inc in A/R (5,000)

Add: Inc in A/P 3,000

Net cash flow from operating activities 108,000

All of the following are true regarding a seller's rights to reduce legal liability in the sale of nonconsumer goods EXCEPT:

(A) The seller can disclaim consequential damages if it is done clearly and conspicuously.

(B) The seller can limit the remedy available to the buyer if he or she does so clearly and fairly.

(C) The seller can place reasonable conditions on the warranty coverage and a shorter time limit of warranty coverage.

(D) The seller can disclaim all implied warranties by simply stating that there are no implied warranties.

(D) The seller can disclaim all implied warranties by simply stating that there are no implied warranties.

Green desires to form a new company to manufacture lawn mowers. Green is concerned about having his personal assets exposed to liability for the new company's contracts and torts. Furthermore, he wants to retain control over the company's operations and growth for the next few years. He will need an infusion of equity capital to begin operations. He hopes to take the company public in about five years if it is advantageous to do so at the time. Which of the following types of business associations would be best for Green's new company?

(A) Corporation

(B) General partnership

(C) Limited partnership

(D) Member-managed limited-liability company

(A) Corporation

A small number of people with complementary skills who are committed to a common purpose, a set of performance goals, and an approach for which they hold themselves mutually accountable is referred to as a

(A) committee

(B) task force

(C) group

(D) team

(D) team

A department manager telephoned two managers in other departments to discuss a cost savings idea that would benefit their departments as well as her own. Which of the following most accurately defines the communication channel that the manager was using?

(A) Upward

(B) Lateral

(C) Downward

(D) Hierarchical

(B) Lateral

Based on his scientific management theory, Frederick Taylor developed what pay principle?

(A) Hourly pay

(B) Incentive pay

(C) Profit sharing

(D) Monthly salary with bonus

(B) Incentive pay

When a domestic firm permits a foreign company to manufacture and sell its product in exchange for a fee or royalty, the process is termed

(A) importing

(B) exporting

(C) licensing

(D) countertrading

(C) licensing

An information system that enables all business departments in the same firm to share relevant information and data is called

(A) an enterprise resource planning (ERP) system

(B) a material requirements planning (MRP) system

(C) a decision support system (DSS)

(D) a point-of-sale (POS) system

(A) an enterprise resource planning (ERP) system

The central processing unit (CPU) in a personal computer contains the

(A) control unit and primary memory

(B) control unit and arithmetic/logic unit

(C) arithmetic/logic unit and bus

(D) arithmetic/logic unit only

(B) control unit and arithmetic/logic unit

Web 2.0 is best represented by which of the following phenomena?

(A) Social networking sites

(B) Word processing

(C) Internet browsers

(D) Text messaging

(A) Social networking sites

Family branding refers to a group of

(A) similar brands of products from different makers

(B) different brands of products from different makers within the same industry

(C) different products marketed under a single brand name

(D) similar products sold by small, family-owned firms

(C) different products marketed under a single brand name

Saint Martin Hospital boasts one of the world's leading medical imaging programs. Its radiology department specializes in the early detection of particularly serious forms of stomach, intestinal, and colon cancer. The hospital plans to invest in a new system of digital medical imaging and image transmission technologies that will enable its radiologists to view and evaluate intestinal scan results from anywhere in the world.

With this investment, the hospital is attempting to overcome which of the constraints of services marketing?

(A) Inventory

(B) Intangibility

(C) Inconsistency

(D) Inseparability

(D) Inseparability

In a large firm, the pool of applicants for the positions of sales manager and sales associate consists of three men and three women. If each candidate has an equal chance of being selected, what is the probability that both positions will be filled by men?

(A) 0.20

(B) 0.25

(C) 0.33

(D) 0.50

(A) 0.20

(3/6)*(2/5) = 0.20

Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner, Sally Thornton, wishes to replace the printed catalog with an online catalog.

Ms. Thornton decides to conduct a market research project to explore how Priceless Treasures' target customers would respond to the online catalog approach.

From data collected by the retail jewelers' trade association, Ms. Thornton learns that sales of antique jewelry are rising and that the most common purchasers are older, upper-income couples. Though initially reluctant to purchase online, these customers are beginning to overcome their concerns. From United States Census Bureau data, she learns that this population segment is growing in number and will continue to do so throughout the next two decades. At this point what should Ms. Thornton do?

(A) Summarize the research findings and recommend implementing the online catalog as the firm's market is clearly growing.

(B) Collect primary data to determine whether these trends and preferences are reflected in Priceless Treasures' customer base.

(C) Collect primary data on competitors to determine whether the online market for antique jewelry is saturated.

(D) End the study and retain the current system as the major customer segment is clearly skeptical of online retailers.

(B) Collect primary data to determine whether these trends and preferences are reflected in Priceless Treasures' customer base.

Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner, Sally Thornton, wishes to replace the printed catalog with an online catalog.

Ms. Thornton decides to conduct a market research project to explore how Priceless Treasures' target customers would respond to the online catalog approach.

Ms. Thornton plans to conduct an online survey of her customers. What is the most significant problem with using this survey method rather than a traditional mail approach?

(A) Respondents may not answer the survey truthfully.

(B) Customers who do not use the Internet will not be in the sample. (C) Respondents will not be able to see the entire survey and thus may answer only part of it.

(D) Online surveys cannot prevent multiple or inappropriate responses to complex questions.

(B) Customers who do not use the Internet will not be in the sample.

Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner, Sally Thornton, wishes to replace the printed catalog with an online catalog.

Ms. Thornton decides to conduct a market research project to explore how Priceless Treasures' target customers would respond to the online catalog approach.

Because pictures of products, either in print or on the Internet, can differ from the actual appearance of a piece of jewelry, Priceless Treasures' customers are sometimes disappointed by items they have purchased. To reduce customer dissatisfaction, the firm's customer service representatives call customers to answer any questions they have, confirm their satisfaction with the purchase, and communicate the firm's refund/return policies. The firm is seeking to influence the customers' purchase decision process by

(A) stimulating customers to recognize a need of which they were previously unaware

(B) facilitating an information search by providing new information (C) influencing alternative assessment by emphasizing the value of the purchased item

(D) reducing cognitive dissonance through the reassurance of personal contact

(D) reducing cognitive dissonance through the reassurance of personal contact

Absolute advantage.

The economic advantage one nation enjoys that is absolutely superior to other nations.

Absorptive capacity

The ability to recognize the value of new information, assimilate it, and apply it.

Accommodative strategy.

A strategy characterized by some support from top managers, who may increasingly view CSR as a worthwhile endeavor.

Acquisition.

A transfer of the control of operations and management from one firm (target) to another (acquirer), the former be coming a unit of the latter.

Acquisition premium.

The difference between the acquisition price and the market value of target firms.

Adaptability.

The ability to change supply chain configurations in response to longer-term changes in the environment and technology.

Administrative policy.

Bureaucratic rules that make it harder to import foreign goods.

Agency costs.

The costs associated with principal-agent relationships.

Agency relationship.

The relationship between principals (such as shareholders) and agents (such as professional managers).

Agency theory.

A theory that focuses on principal-agent relationships (or in short, agency relationships).

Agent.

A person (such as manager) to whom authority is delegated.

Agglomeration.

Clustering of economic activities in certain locations.

Agility.

The ability to react quickly to unexpected shifts in supply and demand.

Alignment.

Alignment of interests of various players.

Andean Community.

A customs union in South America that was launched in 1969.

Antidumping duty.

Tariff s levied on imports that have been "dumped" (selling below costs to "unfairly" drive domestic firms out of business).

Antidumping laws.

Laws that make it illegal for an exporter to sell goods below cost abroad with the intent to raise prices after eliminating local rivals.

Antitrust laws.

Laws that outlaw cartels (trusts).

Antitrust policy.

Government policy designed to combat monopolies and cartels.

Appreciation.

An increase in the value of the currency.

Asia-Pacific Economic Cooperation {APEC).

The official title for regional economic integration involving 21 member economies around the Pacific.

Association of Southeast Asian Nations {ASEAN).

The organization underpinning regional economic integration in Southeast Asia.

Attack.

An initial set of actions to gain competitive advantage.

Australia-New Zealand Closer Economic Relations Trade Agreement {ANZCERTA or CER).

A free trade agreement between Australia and New Zealand that was launched in 1983.

Balance of payments.

A country's international transaction statement, which includes merchandise trade, service trade, and capital movement.

Balance of trade.

The aggregation of importing and exporting that leads to the country-level trade surplus or deficit.

Balance sheet approach.

A compensation approach that balances the cost of living differences relative to parent country levels and adds a financial inducement to make the package attractive.

Bandwagon effect.

The effect of investors moving in the same direction at the same time, like a herd.

Bargaining power.

Ability to extract favorable outcome from negotiations due to one party's strengths.

Base of the pyramid.

Economies where people make less than $2,000 per capita per year.

Beijing Consensus.

A view that questions Washington Consensus' belief in the superiority of private ownership over state owner ship in economic policy making, which is often associated with the position held by the Chinese government.

Benchmarking.

Examining whether a firm has resources and capabilities to per form a particular activity in a manner superior to competitors.

Bid rate.

The price to buy a currency.

Blue ocean strategy.

Strategy that focuses on developing new markets ("blue ocean") and avoids attacking core markets defended by rivals, which is likely to result in a bloody price war or a "red ocean."

Bond.

Loan issued by the firm and held by creditors.

Bondholder.

Buyer of bonds.

Born global.

Start-up companies that attempt to do business abroad from inception.

Bounded rationality.

The necessity of making rational decisions in the absence of complete information.

Bretton Woods system.

A system in which all currencies were pegged at a fixed rate to the US dollar.

BRIC.

Brazil, Russia, India, and China.

Build-operate-transfer {BOT) agreement.

A nonequity mode of entry used to build a longer-term presence by building and then operating a facility for a period of time before transferring operations to a domestic agency or firm.

Business process outsourcing {BPO).

Outsourcing business processes to third-party providers.

Capability.

The tangible and intangible assets a firm uses to choose and implement its strategies.

Capacity to punish.

Sufficient resources possessed by a price leader to deter and combat defection.

Capital flight.

A phenomenon in which a large number of individuals and companies exchange domestic currency for a foreign currency.

Captive sourcing.

Setting up subsidiaries abroad so that the work done is in-house but the location is foreign. Also known as foreign direct investment (FDI).

Cartel (trust).

An output- and price-fixing entity involving multiple competitors.

Causal ambiguity.

The difficulty of identifying the causal determinants of a firm's successful performance.

Center of excellence.

An MNE subsidiary explicitly recognized as a source of important capabilities, with the intention that these capabilities be leveraged by, and/or disseminated to, other subsidiaries.

CEO duality.

The CEO doubles as a chairman of the board.

Chief executive officer (CEO).

The main executive manager in charge of the firm.

Civil law.

A legal tradition that uses comprehensive statutes and codes as a primary means to form legal judgments.

Civilization.

The highest cultural grouping of people and the broadest level of cultural identity people have.

Classical trade theories.

The major theories of international trade that were advanced before the 20th century, which consist of (1) mercantilism, (2) absolute advantage, and (3) comparative advantage.

Clean (or free) float.

A pure market solution to determine exchange rates.

Cluster.

Countries that share similar cultures.

Code of conduct (code of ethics).

A set of guidelines for making ethical decisions.

Cognitive pillar.

The internalized (or taken-for-granted) values and beliefs that guide individual and firm behavior.

Collectivism.

The idea that an individual's identity is fundamentally tied to the identity of his or her collective group.

Collusion.

Collective attempts between competing firms to reduce competition.

Collusive price setting.

Price setting by monopolists or collusion parties at a level higher than the competitive level.

Co-marketing.

Efforts among a number of firms to jointly market their products and services.

Command economy.

An economy that is characterized by government ownership and control of factors of production.

Commoditization.

A process of market competition through which unique products that command high prices and high margins gradually lose their ability to do so, thus becoming commodities.

Common denominator.

A currency or commodity to which the value of all currencies are pegged.

Common law.

A legal tradition that is shaped by precedents and traditions from previous judicial decisions.