Midterm

Question 1

Fixed Variable

Answer 1

fixed costs, indirect costs or overheads are business expenses that are not dependent on the level of goods or services produced by the business

Question 2

Variable costs

Answer 2

Variable costs are those costs that vary depending on a company’s production volume

Question 3

Direct cost

Answer 3

A direct cost is a price that can be completely attributed to the production of specific goods or services
Ex cost of materials to make product

Question 4

Indirect cost

Answer 4

Indirect costs are costs that are not directly accountable to a cost object (such as a particular project, facility, function or product
Ex supervision salaries, insurance

Question 5

Debenture

Answer 5

A debenture is a type of debt instrument that is not secured by physical assets or collateral.
Ex long term debt usually paid on specific date

Question 6

Bonds

Answer 6

A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.
Ex bond issuer is obligated to pay a specified amount of money at specified future dates.

Question 7

Total revenue

Answer 7

Total revenue in economics refers to the total receipts from sales of a given quantity of goods or services
Includes discounts or deductibles

Question 8

Sales revenue

Answer 8

the amount of income that a company receives from the sale of products or services in a particular period of time

Question 9

Share issue

Answer 9

Issued shares are the authorized shares sold to and held by the shareholders of a company, regardless of whether they are insiders, institutional investors or the general public

Question 10

Voting rights

Answer 10

Delegable right of a common stock (ordinary share) holder to take part in a firm’s decision making process, by voting on matters of policy and to choose members of the board of directors.

Question 11

Internal finance

Answer 11

In the theory of capital structure, internal financing is the name for a firm using its profits as a source of capital for new investment, rather than a) distributing them to firm’s owners or other investors and b) obtaining capital elsewhere.
Ex owners own money or money invested by family or friends

Question 12

External finance

Answer 12

In the theory of capital structure, External financing is the phrase used to describe funds that firms obtain from outside of the firm. It is contrasted to internal financing which consists mainly of profits retained by the firm for investment.
Ex taking on a buisness partner

Question 13

Liability

Answer 13

A liability is a company’s financial debt or obligations that arise during the course of its business operations. … Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues and accrued expenses.

Question 14

Current assets

Answer 14

A current asset is an item on an entity’s balance sheet that is either cash, a cash equivalent, or which can be converted into cash within one year. … Examples of current assets are: Cash, including foreign currency. Investments, except for investments that cannot be easily liquidated. Prepaid expenses.

Question 15

Over drafts

Answer 15

An overdraft allows the individual to continue withdrawing money even if the account has no funds in it or not enough to cover the withdrawal. Basically, overdraft means that the bank allows customers to borrow a set amount of money.

Question 16

Working capital

Answer 16

The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has enough short term assets to cover its short term debt. Anything below 1 indicates negative W/C (working capital). While anything over 2 means that the company is not investing excess assets.

Question 17

Mergers

Answer 17

Cobination of one or more companies become one company

Question 18

Acquisitions

Answer 18

Business acquisition is the process of acquiring a company to build on strengths or weaknesses of the acquiring company. A merger is similar to an acquisition but refers more strictly to combining all of the interests of both companies into a stronger single company.

Question 19

Economies of scale

Answer 19

In microeconomics, economies of scale are the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Question 20

DisEconomies of scale

Answer 20

Diseconomies of scale is an economic concept referring to a situation in which economies of scale no longer functions for a firm. With this principle, rather than experiencing continued decreasing costs and increasing output, a firm sees an increase in marginal costs when output is increased.

Question 21

Profitability

Answer 21

Profitability is the ability of a business to earn a profit. A profit is what is left of the revenue a business generates after it pays all expenses directly related to the generation of the revenue, such as producing a product, and other expenses related to the conduct of the business activities.

Question 22

Liquidity

Answer 22

Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price

Question 23

Public limited companies

Answer 23

A public limited company (PLC) is the legal designation of a limited liability company which has offered shares to the general public and has limited liability.o

Question 24

Joint venture

Answer 24

Then the parties each own a specific percentage of the entity. If the joint venture is a corporation, for example, and two businesses have equal shares in the business, they structure the company so each partner entity has an equal number of shares of company stock and equal management and board of directors members.

Question 25

Partnership

Answer 25

A legal form of business operation between two or more individuals who share management and profits. The federal government recognizes several types of partnerships.

Question 26

Strategic alliance

Answer 26

A strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. … Strategic alliances occur when two or more organizations join together to pursue mutual benefits.

Question 27

Diversification

Answer 27

Companies sometimes diversify their business activities to manage risk or expand into new markets

Question 28

Democratic leader

Answer 28

Democratic leadership, also known as participative leadership, is a type of leadership style in which members of the group take a more participative role in the decision-making process. Everyone is given the opportunity to participate, ideas are exchanged freely, and discussion is encouraged

Question 29

Laisse-faire leadership

Answer 29

Laissez-faire leadership, also known as delegative leadership, is a type of leadership style in which leaders are hands-off and allow group members to make the decisions. Researchers have found that this is generally the leadership style that leads to the lowest productivity among group members

Question 30

Situational leadership

Answer 30

Situational leadership refers to when the leader or manager of an organization must adjust his style to fit the development level of the followers he is trying to influence

Question 31

Autocratic leadership

Answer 31

A leadership style in which the leader dictates policies and procedures, decides what goals are to be achieved, and directs and controls all activities without any meaningful participation by the subordinates.
Does not encourage feed back, usually very strict boss, can lead to low employee morale

Question 32

Taylors motivational theory

Answer 32

Taylor put forward the idea that workers are motivated mainly by pay. His Theory of Scientific Management argued the following: Workers do not naturally enjoy work and so need close supervision and control. Therefore managers should break down production into a series of small tasks.

Question 33

Maslow motivational theory

Answer 33

states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction.

Question 34

Herzbergs motivational theories

Answer 34

concludes that there are certain factors in the workplace that can cause job satisfaction and a separate set of factors that can cause dissatisfaction.
Ex provides opportunities for achievement
Recognize people’s contributions
Give responsibility to all group memeber

Question 35

Pinks motivational theory

Answer 35

He accepts that money is a motivator at work, but once people perceive that they are paid fairly, then they become much more motivated by intrinsic elements. Once people are paid fairly, they look for more from their work.

According to Pink, autonomy is the desire to direct our own lives. Pink argues that allowing employees autonomy runs counter to the traditional view of management which wants employees to “comply” with what is required of them.
Pink argues that humans love to “get better at stuff” - they enjoy the satisfaction from personal achievement and progress. Allowing employees to enjoy a sense of progress at work contributes to their inner drive.

Pink describes purpose as the desire to do things in service of something larger than ourselves. Pink argues that people intrinsically want to do things that matter.