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Question 1
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True/False

A manager's only responsibility is to monitor and assess the performance of his or her firm.

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Question 2
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True/False

A company's total asset base consists of its current assets plus plant, property, and equipment (PPE).

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Question 3
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True/False

The efficient market hypothesis suggests that the market price of a firm's stock is an objective indicator of a firm's past, current, and expected future performance.

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Question 4
Free
True/False

A firm will always see its stock price appreciate when it demonstrates measurable growth.

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Question 5
Free
True/False

Competitive advantage goes to the firm that maximizes the difference between the cost of producing a good and the retail price that consumers pay.

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Question 6
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Managers must first develop a strategy that is likely to produce a competitive advantage before implementing a balanced scorecard approach.

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Question 7
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A sustainable strategy is one that produces a competitive advantage that can be maintained over time.

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Question 8
True/False

In the why, what, who, and how of business models framework, the why dimension asks "why does the business model create value?"

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False
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Question 9
True/False

Once a firm chooses a business model, it must stick with it for the life of the firm.

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True
False
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Question 10
Multiple Choice

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue, Research & development expense/Revenue, and

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A
Accounting profitability/Revenue.
B
Economic value created/Revenue.
C
Total return to shareholders/Revenue.
D
Selling, general, & administrative expense/Revenue.
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Question 11
Multiple Choice

It is April 2018 and Mark is a novice investor who wants to decide between purchasing shares in EagleCorp or Myna Bird Inc. In fiscal year 2017, EagleCorp's return on invested capital (ROIC) was 15 percent, and its cost of capital was 12 percent. During the same period, Myna Bird Inc.'s ROIC was 22 percent and its cost of capital was 25 percent. What does this information tell Mark?

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A
Myna Bird Inc. is more likely to create value while EagleCorp is more likely to destroy value.
B
EagleCorp is more likely to create value while Myna Bird Inc. is more likely to destroy value.
C
Both Myna Bird Inc. and EagleCorp are likely to create value.
D
Neither Myna Bird Inc. nor EagleCorp are likely to create value.
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Question 12
Multiple Choice

________ precisely indicates how much of a firm's sales is converted into profits.

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A
Break-even price
B
Working capital turnover
C
Return on revenue
D
Inventory turnover
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Question 13
Multiple Choice

The ratio Cost of goods sold/Revenue indicates how efficiently a company can

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A
produce a good.
B
sell a good.
C
advertise a good.
D
design a good.
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Question 14
Multiple Choice

A high percentage of R&D/Revenue ratio indicates a(n)

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A
strong focus on innovation to improve current products and services.
B
inefficiency in the management to focus on new products.
C
strong focus on marketing and sales to promote products and services.
D
negligent investment toward research and development.
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Question 15
Multiple Choice

________ is best described as a measure of how effectively capital is being used by a firm to generate revenue.

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A
Return on revenue
B
Risk capital
C
Working capital turnover
D
Revenue per employee
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Question 16
Multiple Choice

The ratio of SG&A/Revenue is an indicator of a firm's focus on

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A
researching to produce innovative products and services.
B
marketing and sales to promote its products and services.
C
producing a good in an efficient manner.
D
creating a good that is cost-effective.
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Question 17
Multiple Choice

The working capital turnover of Tesva Systems Corp. is 6.0. What does this financial data suggest?

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A
For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00.
B
For every $6.00 Tesva Systems puts to work, the company realizes sales of $1.00.
C
For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss.
D
For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.
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Question 18
Multiple Choice

Which of the following statements correctly compares Apple and Microsoft in 2016?

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A
Apple had a higher return on revenue than Microsoft.
B
Apple had a higher return on invested capital than Microsoft.
C
Microsoft had higher total sales than Apple.
D
Microsoft had a lower cost structure than Apple.
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Question 19
Multiple Choice

Which of the following statements is true of accounting data?

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A
Accounting data focus mainly on intangible assets, rather than tangible assets.
B
Accounting data are historical data and thus backward-looking.
C
Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.
D
Accounting data consider off-balance sheet items, such as pension obligations of a firm.
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Question 20
Multiple Choice

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

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A
land and building
B
accounts payable
C
patents
D
customer experience
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