B6- Process and Project Management, Globalization, Fin. Risk Management, and Valuation

Question 1

Total prevention and appraisal cost

Answer 1

Equipment main (prevention) + Product Testing (appraisal)

Question 2

Conformance Costs

Answer 2

Prevention and Appraisal

Question 3

Non-Conformance Costs

Answer 3

Internal and External Failure Costs

Question 4

the point of Lean Manufacturing?

Answer 4

Waste Reduction

Question 5

ThroughtPut Definition

Answer 5

the amount of material or items passing through a system or process.

Question 6

Example of Conforming- and Non-Conforming Costs:

Prevention
Appraisal
Internal
External

Answer 6

Prevention:
Employee training, preventative maintenance

Appraisal:
Quality inspection, materials inspection

Internal:
Scrap

External:
Product Recalls, processing product returns

Question 7

Responsibility of a Project Manager?

Answer 7

ID and manage internal and external stakeholder expectations

Question 8

Project Sponsor

Answer 8

This individual is an executive-level manager, responsible for allocating funding and resources for the proj.

INCL. responsible for overall project delivery

Question 9

Derive the monetary value of a $6000 risk event?

Answer 9

15% * 6000 + 85% *0

=900

Question 10

Globalization

Answer 10

• World trade growth as a percentage of GDP

- assoc. with comparative advantage and increased specialization

Question 11

Compensating Balance (calc.)

Answer 11

$500k REQ * 20% compensating =100K

Net proceeds = 400K

$500K * 8% coupon = 40K

Int / Net Proceeds
40K/400K = 10%

Question 12

EPS = Net Income / # Shares

Answer 12

Where Net Inc. = EBIT - taxes

Question 13

Short-term financing:

Answer 13

Lower Interest rates

Higher interest rate risk (bc rates will fluctuate more dramatically)

Question 14

Long-term financing

Answer 14

Decreased Credit Risk

Question 15

Zero growth model

Answer 15

Price=D/R

P=$10/.2

Question 16

PEG Ratio

Answer 16

PEG = (P0 / E0) / (Gx 100)
1.25 = (15/3) / (G x 100)
1.25 = 5 / (G x 100)
G x 125 = 5
G = 5/125
G = .04

Question 17

DRG Model

Answer 17

P = D1/ r-g

FIRST CALC D1:
D1 = D0 *

Question 18

Economic Rate of Return on Common Stocks

Answer 18

ERR = (D + price change) / Beg. Price

Question 19

IIA def. of internal auditing?

Answer 19

Independent objective assurance and consulting activity

Question 20

Theory of constraints

Answer 20

Concerned with maximizing Throughput (aka number of elements that can move through) by ID’ing and alleviating constraints

Question 21

Certainty equivalent

Answer 21

Point at which investor becomes indifferent to risk

Question 22

Balance of Payments : Current Account

Answer 22

Imports and Exports

Question 23

Balance of Payments: Capital Acount

Answer 23

Investments in this country and foreign countries