MAN 4720, Chapter 5, Exam 1 ACTUAL
QUESTIONS AND CORRECT ANSWERS
1. Because external factors create volatility in stock prices, a better measure of a firm's
performance over the long term is the
a. Unemployment rate
b. Total return to shareholders
c. Sum total of the market's trajectory
d. The NASDAQ computer index - Correct answers✔b. Total return to shareholders
2. Given that compared to the past the importance of intangible has increased, the importance of
the firm's book value has ______ as part of a firm's total stock market valuation
a. Increased
b. Decreased
c. Stayed the same - Correct answers✔b. Decreased
3. When a firm does unfavorably compared to similar firms, it is said to
a. File for bankruptcy
b. Underperform
c. Go our of business
d. Exceed benchmarks - Correct answers✔b. Underperform
4. To determine the value of a good in the eyes of consumers, a firm can
, a. Identify some of the most commonly used profitability metrics in strategic management
b. Examine a consumer's purchasing habits for their revealed preferences
c. Employ the use of estimates in firm level strategic management
d. Recall the fixed and variable costs to measure competitive advantage - Correct answers✔b.
Examine a consumer's purchasing habits for their revealed preferences
5. When a company has a low payables turnover ratio, it indicates
a. The firm has increased its number of invoices
b. MORE efficient management in paying creditors and generating interest-free loans from
suppliers
c. LESS efficient management in paying creditors and generating interest-free loans from
suppliers - Correct answers✔b. MORE efficient management in paying creditors and
generating interest-free loans from suppliers
6. To determine economic value creation, one must look at
a. Consumer surplus minus the firm's profit
b. Economic contextual factors
c. The sum of opportunity
d. The sum of consumer and producer surplus - Correct answers✔d. The sum of consumer and
producer surplus
7. A balanced scorecard offers both common financial metrics and a variety of _____ on
customer satisfaction, internal processes, and the company's innovation and improvement
activities
QUESTIONS AND CORRECT ANSWERS
1. Because external factors create volatility in stock prices, a better measure of a firm's
performance over the long term is the
a. Unemployment rate
b. Total return to shareholders
c. Sum total of the market's trajectory
d. The NASDAQ computer index - Correct answers✔b. Total return to shareholders
2. Given that compared to the past the importance of intangible has increased, the importance of
the firm's book value has ______ as part of a firm's total stock market valuation
a. Increased
b. Decreased
c. Stayed the same - Correct answers✔b. Decreased
3. When a firm does unfavorably compared to similar firms, it is said to
a. File for bankruptcy
b. Underperform
c. Go our of business
d. Exceed benchmarks - Correct answers✔b. Underperform
4. To determine the value of a good in the eyes of consumers, a firm can
, a. Identify some of the most commonly used profitability metrics in strategic management
b. Examine a consumer's purchasing habits for their revealed preferences
c. Employ the use of estimates in firm level strategic management
d. Recall the fixed and variable costs to measure competitive advantage - Correct answers✔b.
Examine a consumer's purchasing habits for their revealed preferences
5. When a company has a low payables turnover ratio, it indicates
a. The firm has increased its number of invoices
b. MORE efficient management in paying creditors and generating interest-free loans from
suppliers
c. LESS efficient management in paying creditors and generating interest-free loans from
suppliers - Correct answers✔b. MORE efficient management in paying creditors and
generating interest-free loans from suppliers
6. To determine economic value creation, one must look at
a. Consumer surplus minus the firm's profit
b. Economic contextual factors
c. The sum of opportunity
d. The sum of consumer and producer surplus - Correct answers✔d. The sum of consumer and
producer surplus
7. A balanced scorecard offers both common financial metrics and a variety of _____ on
customer satisfaction, internal processes, and the company's innovation and improvement
activities
