BUS 475 Final Exam Answers
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BUS 475 Content from 2017 (New Answer Guides)
Hailey's Food Inc. sells fish sticks at $3.00 a box. The government passes a law requiring sellers of food products to pay $0.50 as tax for each product they sell. Hailey's has to pay the government $0.50 for every box of fish sticks it sells. The company decides to trade down to compensate for the tax. Which of the following is a likely outcome of the company's decision?
The company will increase the price and quantity of fish sticks,
The company will continue to sell the same quantity of fish sticks at the same price.
The company will sell fish sticks worth $2.50 at $3.00 per box.
The company will increase the price of one box of fish sticks to $3.50 while also increasing the package size
Explanation: When a company “trades down”, it is selling one item to buy something less expensive. In this case, the company is likely to sell a less valuable product at a higher price to compensate for the tax.
Five years ago, Rigatani Corp. introduced its new energy drink, Energize. According to recent market surveys, the product is in its decline stage. At the same time Energize was introduced, Panne Inc. introduced White Unicorn, another new energy drink. Therefore, White Unicorn must also be in its decline stage now. Which of the following is an assumption on which the conclusion is based?
Unicorn did not spend more time in the maturity stage than Energize did
LaBelle, a famous cosmetic brand, introduces a new skin cleanser...
Hush Sports Inc., sellers of sportswear, transitioned from being just a brick-and-mortar store to an online marketplace for sports goods...
Answers on Study Guide
Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows.
Operating activities section.
Explanation: The operating activities section would be responsible for representing the decreases or increase in current assets, including accounts receivable.
On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800. The March 31st balance sheet should report what balance in their supplies account?
Explanation: The balance sheet provides a snapshpot of assets at a specific point in time. This problem can be solved by added initial supplies to newly purchased supplies, then subtracting the total usage. (1500+2900) – 2800 = 1600
Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was:
Explanation: Green Inc. shares increased by a factor of 4 times. In other words, 4 shares were given for every 1 share that was owned.
Continuous monitoring, in the contemporary approach, is beneficial because _____________.
organization response time is increased
Explanation: Continuous monitoring enables companies to quickly detect and flag areas of concern. This makes response time and conflict management happen far more rapidly. The SANS institute published an excellent article explaining continuous monitoring.
BUS 475 Content from 2016
Jay stops at the shopping mall to purchase a new pair of jeans from the Diesel store. He is the ultimate consumer in a pipeline from the producer through intermediaries, including the clothing store. This pipeline is actually a__________.
Explanation: A marketing channel is simply a path that enables to producer to gets its product to the final consumer.
Fred takes Betty to dinner at a very expensive and exclusive restaurant. The menu does not mention prices. The server takes their order, and both Betty and Fred enjoyed the meal immensely. When the bill comes, Fred refuses to pay because the menu had no prices and because he and the server never engaged in language indicating an offer and acceptance. The server said, “Are you ready to order?” and when Fred said “Yes,” the server merely asked, “What may I get you tonight?”
Fred must pay based on an implied-in-fact contract theory.
Explanation: Despite the lack of prices or verbal agreement, there is an implied contract when a person places an order for food at a restaurant. This societal convention is enough to make a valid contract.
All Past BUS 475 Answers Included
The reason economists and accountants have problems using cost analysis in the real world is that
although implicit costs do not show up in accounting profits, they nevertheless affect managerial decisions
Explanation: Implicit costs occur when an asset is used internally, rather than for direct cash flow. These costs affect decisions, but cannot be quantitatively measured.
A standardized language used to manipulate data is
a data manipulation language
Explanation: Data manipulation languages are essential for virtually all computer programming applications.
Which of the following is an ethical issue?
Business Process Reengineering
Explanation: Business processes can be redesigned to offer higher levels of social benefits, environmental sustainability, and stakeholder integration.
What are the benefits of using IM in business communication?
The Oviedo Thespians are planning to present performances of their Florida Revue on two consecutive nights in January. It will cost them $5,000 per night for theater rental, event insurance, and professional musicians. The theater will also take 10% of gross ticket sales. How many tickets must they sell at $10.00 per ticket to break even?
Explanation: Breakeven = 10000 / (10 – 1) = 1111.11 = 1112 Tickets
Suppose Stock A has had a mean price of $6.58 per share with a standard deviation of $1.88, while Stock B has had a mean price of $10.57 per share with a standard deviation of $3.02. Which stock shows a higher coefficient of variation or volatility?
Both stocks have the same coefficient of variation.
Explanation = Stock A = 1.88 / 6.58 = .285714
Stock B = 3.02 / 10.57 = .285714
A distribution center for a chain of electronics supply stores fills and ships orders to retail outlets. A random sample of orders is selected as they are received and the dollar amount of the order
Which statement attempts to show the earnings of the firm’s operations over a specific time period?
Explanation: The income statement will generally show how much a company has earned on a quarterly or annual basis.
Let’s say a machine costs $1,000, has a three-year life, and has an expected salvage value of $100. It will produce after-expense twelve-month cash flows (ACF) of $600 per year, beginning one year from now. Provided that your needed rate of return for the task is 10%, what is the NPV (Net Present Value) of this investment product?
Explanation: NPV is calculated using the formula: Rt (1 + i)^2. In this case the NPV is determined be $570 when the required return is 10%.
What are some of the disadvantages of using current liabilities versus long-term debt?
Greater risk of illiquidity, and uncertainty of interest costs
Explanation: Short-term debt often carries a larger interest rate and will make your company appear risker to investors and creditors.