B6: Grab Bag

Question 1

What are the main steps for process management?

Answer 1

PDCA
Plan
Do
Check
Act

Question 2

What are the conforming costs and nonconforming costs?

Answer 2

AP IE
Appraisal
Prevention

Internal failure
External failure

Question 3

What is prevention?

Answer 3

prevent production of defective units
training
inspection
maintenance
redesign product and process
high quality suppliers

Question 4

What is appraisal?

Answer 4

discover and remove defective parts before they are shipped to the customer or the next department
stat quality checks
testing
inspection
maintenance of lab

Question 5

What is internal failure?

Answer 5

cure defect before product sent to customer
rework
scrap
tooling changes
cost to dispose
cost of lost unit
downtime

Question 6

What is external failure?

Answer 6

cure defect after product sent to customer
warranty
cost of returns
liability claims
lost customers
reengineering external failure

Question 7

What is the relationship between conforming and non-conforming costs?

Answer 7

Inverse

Question 8

What is the focus of TQM?

Answer 8

customers
continuous improvement
quality circles
top mgmt support
objective measures
timely recognition
ongoing training

Question 9

What is the main objective of Kaizen continuous improvement?

Answer 9

ensure resource usage stays within cost

Question 10

What is the difference between BPR and BPM?

Answer 10

Radical change
vs.
Incremental change

Question 11

What is the focus of lean mfg?

Answer 11

use of only resources required to meet customer requirements

Question 12

What is the objective of theory of constraints?

Answer 12

Maximizing throughput by identifying and alleviating constraints

Question 13

What is the common measure for globalization?

Answer 13

World trade growth as a percentage of GDP

Question 14

What are the 2 main attributes of globalization?

Answer 14

comparative advantage

increased specialization

Question 15

What is power held in a single nation called?

Answer 15

unipolar

Question 16

What is a repatriation restriction?

Answer 16

company invests money in foreign country but cannot bring that money back to home country

Question 17

What are the advantages and disadvantages of ST financing?

Answer 17

increased liquidity
increased profitability
decreased financing cost

increased interest rate risk
decrease capital availability

Question 18

What are the advantages and disadvantages of LT financing?

Answer 18

decreased Interest rate risk
increased capital availability

decreased profitability
decreased liquidity
increased financing costs

Question 19

What criteria must a lessee meet to qualify as a capital/finance lease?

Answer 19

must meet one of the following:
OWNS
Ownership transfer at end of lease
Written bargain purchase option
Ninety percent of FV from lease pmts
Seventy five percent of asset's economic life committed in lease term

Question 20

What is a debenture?

Answer 20

unsecured obligation of the issuing company

Question 21

What are the two broad categories of risk?

Answer 21

DUNS
Diversifiable
 Unsystematic (nonmarket/firm specific)
Nondiversifiable
 Systematic (market)

Question 22

How do we calc effective interest rate?

Answer 22

interest paid / net proceeds received

Question 23

How do we calc annual percentage rate?

Answer 23

effective period rate x # compounding periods

Question 24

How do we calc effective APR?

Answer 24

((1 + stated rate)^ # of compounding periods) - 1

Question 25

What is the effect of currency appreciation?

Answer 25

outflows decline | inflows increase

Question 26

What is the effect of currency depreciation?

Answer 26

outflows increase | inflows decrease

Question 27

What categories make up financial risk?

Answer 27

``` Interest Market Purchasing power Liquidity Default ```

Question 28

Which things fall under mandatory guidance?

Answer 28

Definition of internal auditing International standards Code of ethics

Question 29

Which things fall under endorsed and strongly recommended guidance?

Answer 29

Position papers Practice advisories Practice guides

Question 30

How do we calculate Price to Earnings Growth?

Answer 30

PEG = (Po/E1) / G

Question 31

What is transaction risk exposure?

Answer 31

possibility that the currency in which a transaction is denominated will be adversely affected by the currency in which the transaction is settled is referred to as transaction exposure risk

Question 32

What is a firewall?

Answer 32

system of user identification and authentication that prevents unauthorized users from gaining access to network resources network node used to improve network traffic and to set up a boundary that prevents traffic from one network segment from crossing over to another

Question 33

What is the imputed rate used in the residual income approach?

Answer 33

target return on investment set by the company's management

Question 34

What is strategic risk?

Answer 34

risk of choosing inappropriate technology

Question 35

What is financial risk?

Answer 35

financial resources lost, wasted, or stolen

Question 36

What is information risk?

Answer 36

risk of loss of data integrity and that of incomplete transactions

Question 37

What is included in the risk assessment portion of internal control framework?

Answer 37

financial reporting objectives and risks | fraud risks

Question 38

How do we calc times interest earned ratio?

Answer 38

EBIT / Interest Expense