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Question 1

an underlying assumption of the constant growth model is

Answer 1

that the stock price will grow at the same rate as the dividend.

Question 2

Dumping occurs when

Answer 2

the price charged to foreign customers on exported goods is less that either the price charged in the domestic market or less than the production cost.

Question 3

Six Sigma for existing products

Answer 3

define the problem
measure key aspects
analyze data
improve or optimize current processes
control

Question 4

six sigma for new products

Answer 4

define design goals
measure critical quality issues
analyze design alternatives
design optimization
verify the design

Question 5

The cash budget must be prepared before

Answer 5

you can complete the forecasted balance sheet

Question 6

The current level of inventory has no

Answer 6

impact on the optimal level of inventory

Question 7

under pure (perfect) competition, strategic plans include

Answer 7

maintaining market share and responsiveness of the sales price to market conditions

Question 8

under oligopoly, strategic plans focus on

Answer 8

maintaining market share, ensuring product differentiation, adapting to changes in price and/or production volume.

Question 9

Supply chain operations model (SCOR) where does the ability of the suppliers to supply resources fall into?

Answer 9

Plan

plan - balance demand and supply
source - procure resources
make - turn raw materials into products
deliver - product in hands of customers

Question 10

what balanced score card perspectives examine a company’s success in a targeted market?

Answer 10

customer perspective

financial - profit and growth
internal business - efficiency
customer - customer opinion
advance and learning innovation - human capital development

Question 11

assuming that demand for a product is price unit elastic, revenue will

Answer 11

not change

price will go up, quantity will go down. rev will be same.

Question 12

an information resource should be categorized as medium impact if there is

Answer 12

a work-around for its loss in the short term but recovery is necessary for the long term

Question 13

core values of an entity closely correlate with its

Answer 13

Culture

Question 14

A working capital technique which delays the outflow of cash

Answer 14

A draft

Question 15

A company evaluating the advantages and disadvantages of short-term and long-term financing options would note which of the following two characteristics to be true?

Answer 15

Short term financing - increased interest rate risk, but should be lower in interest rates

Longer term financing - decreased credit risk, you seek LT financing less often,

Question 16

The basic assumption of activity based costing is that

Answer 16

products or services require the performance of activities, and activities consume resources.

Question 17

Average daily outflows are 3 mil for Evans inc. A new cash management system can add two days to the disbursement schedule. Assuming Evans earns 10% on excess funds, how much should the firm be willing to pay per year for this cash management system?

Answer 17

3,000,000 x 2 = 6,000,000

6,000,000 x .1 = 600,000

600,000 allowable cost for system

Question 18

According to COSO, establishing, maintaining, and monitoring an effective internal control system can do each of the following except

-help an entity achieve performance targets
-promote an entity’s compliance with laws and regulations
-ensure an entity’s financial survival
-provide protection for an entity’s resources

Answer 18

it cannot ensure financial survival.

Question 19

a cost that bears an observable and known relationship to a quantifiable activity base is an

Answer 19

engineered cost.

Question 20

The corporation publishes and Employee Handbook that contains employee responsibilities for moral behavior including a code of conduct. Each year, employees must acknowledge their receipt of the handbook, their understanding, and if they have any awareness of non-compliance within the company. This would indicate

Answer 20

Sound integrity and ethical values are developed and understood and set the standard of conduct for financial reporting.

Question 21

the best cost strategy strives to

Answer 21

have the firm evaluate and change its value chain such that it can achieve the lowest cost among its closest competitors while matching them on the features desired by customers.

Question 22

A Pareto diagram combines the elements of

Answer 22

a histogram and quality control issues displayed in order of most to least frequent with a line graph that displays the cumulative occurrence of the problems

Question 23

As used in capital budgeting analysis, the internal rate of return uses which of the following items in its computation

-net incremental investment
-incremental average operating income
-net annual cash flows

Answer 23

net incremental investment
net annual cash flows

Question 24

The regular evaluation of employees for their competence in financial reporting is an important link between

Answer 24

human resources policies and achievement of financial reporting objectives.

Question 25

For the purposes of allocating joint costs to joint products, the sales price at the point of sale, reduced by the cost to complete after split-off, is assumed to be equal to the

Answer 25

Relative sales value at split off

Sales value minus cost to complete is sales value at split-off

Question 26

The type of system test that would validate the logical reasoning of the system?

Answer 26

Sanity test

Question 27

The concept of timeliness of data availability is most relevant to

Answer 27

IT Governance

Question 28

What is the primary purpose of a disaster recovery plan?

Answer 28

specify the steps required to resume operations.

Question 29

A diagonal combination occurs when

Answer 29

a company integrates with another company that provides ancillary support for that activity.

think shipping

Question 30

An acceptance test ensures that software

Answer 30

works correctly for the intended user in their work environment.