Page 1

BUS 475 Capstone Final Exam Part 1 and 2 (New, 2018)

For more course tutorials visit www.newtonhelp.com

BUS 475 Capstone Final Examination Part 1 (New, 2018) BUS 475 Capstone Final Examination Part 2 (New, 2018) ------------------------------------------------------------------------

BUS 475 Capstone Final Examination Part 1 (New, 2018)

For more course tutorials visit www.newtonhelp.com

BUS 475 Capstone Final Examination Part 1

From the following information calculate the net increase in cash. • $88,780 • $18,620


• $13,220 • $23,380 Irvin’s Ice Creams a popular chain of ice cream parlors located only in the United States is looking for opportunities to grow its business. Which of the following suggestions, if provided by the company’s marketing manager, would present the least amount of risk to the firm? • Leveraging the firm’s brand value by selling children’s toys • Increasing sales by increasing the number of stores in the United States • Selling Irvin’s branded clothing in a new market • Selling its current products in an attractive new market Claudia is a team lead in an organization. One day at work a team member Marc informs Claudia that he wants to speak to her about the problems that he faces at work. Marc tells her that he is being treated unfairly at work and that his colleagues often ridicule him because of his ethnicity. He goes on to say that his disturbed state of mind has caused a dip in the productivity and quality of his work. Claudia does not interrupt him when he is speaking and encourages him to talk openly. She also lets him know that she understands his situation and that his feelings are valid. In this scenario, Claudia is primarily engaged in __________. • selective listening • passive listening • empathic listening • defensive listening Calculate the net working capital from the information given below. The figures are in millions of dollars. • $(140) • $520 • $610 • $1,030


TwissData Corp. is an electronics firm based in Damiya that manufactures motherboards. Because of a rapid growth in the personal computing industry, TwissData Corp. decides to produce personal desktops and laptops instead of motherboards. By doing so, which type of market-product strategy has TwissData Corp. applied? • Product development • Diversification • Market penetration • Market development Zuckain Corp. has issued a 10-year coupon bond. The bond is issued at an annual coupon rate of 14%. The face value of the bond is $1,500, and the bond is currently trading at $1,232.56. Calculate the bond’s yield to maturity. • 64% • 32% • 25% • 95% The current price of Latera Corporation’s common stock is $45 per share. The company expects to pay a dividend of $3.30 per share during the next year. The expected growth rate of the stock is 12%. Calculate the cost of equity using the constant-growth model. • 33% • 60% • 64% • 33% General Pharmacy’s stock has a beta of 1.8 and an expected return of 14%, and Sicoras Corp.’s stock has a beta of 1.5 and an expected return of 16.2%. Assuming capital-asset pricing model holds, calculate the return on the market portfolio. • 3% • 2% • 6% • 9% In 2006, Dexel Electronics Inc. introduced audio systems in the market for electronic gadgets. Because of an increase in sales volume as well as


a growing proportion of repeat purchasers, the company has now upgraded the old version of audio systems by introducing new features. Given this information, in which stage of the product life cycle does Dexel Electronics lie? • Growth • Decline • Introduction • Maturity FarmFresh Inc. partners with multiple retailers to sell its organic products. If stocks fall below a product’s threshold, the retail managers raise purchase orders to FarmFresh. It takes two days for FarmFresh to process the orders and dispatch the products. The process proves to be ineffective when the retail stores do not have the stock to meet a sudden increase in demand. How can supply chain management (SCM) systems solve this problem and make the process more efficient? • The retail stores can track the status of a shipment. • Managers from the retail stores can raise purchase orders over telephone. • FarmFresh can have real-time access to sales information. • Customers can track the status of a product delivery. LaBelle, a famous cosmetic brand, introduces a new skin cleanser. Initially, the product does extremely well and reaps huge profits for the company. After using the product for few months, consumers having acne complain of rashes and allergies. An external chemical agency accuses that the company used a harsh chemical that causes allergies to people with acne, and it did not include it on the ingredients list displayed on the product’s label. These harsh chemicals did not cause allergies to people with normal skin. When enquired, the company’s CEO confesses that the products would have not done so well if they had listed the chemical. The company can be charged with __________. • battery • fraud • defamation • Assault Ricalta Inc. earns a total of $500,000 before interest and taxes. Its total


debt is $1,110,000 (costing 5%). It has 150,000 shares of common stock at $5 per share. The firm is considering reducing its debt by $450,000 by issuing an additional 90,000 shares of common stock. The firm is in the 35 percent tax bracket. Its earnings before interest and taxes will remain the same as the new capital structure will not impact the firm’s operations. Which of the following will be a consequence of the change in Ricalta’s capital structure? • The firm’s earnings before taxes (EBT) will remain unchanged. • The firm’s net income will decrease by $14,625. • The firm’s earnings per share (EPS) will be reduced by $0.66. • The firm’s net income will increase by $10,625. The capital structure of Wilken Corporation is given below. Calculate the weighted average cost of capital (WACC).

Additional details are as follows: • 35% • 65% • 75% • 45% Mirabel Inc. has recently ventured into the home cleaning supplies market with its very own floor cleaner, Flofix, which does not contain any harmful chemicals such as phenol. The company has used aggressive marketing strategies and innovative advertising campaigns to promote the product. The company’s revenue analysis shows that the sales for the product are increasing steadily. However, when the market survey team of the company surveyed a large number of consumers in the target market, the consumers mentioned that they had not switched over to the new brand of floor cleaner. Which of the following, if true, best explains how the sales for the company went up in spite of consumers not purchasing the product? • People prefer to use products that they are familiar with rather than


trying out new products. • Organizational buyers purchase new products before consumers do. • Consumers sometimes wait to see how well a product performs in the market before purchasing it. • Mirabel Inc. did not invest equal amounts of money on its different advertising campaigns. A popular hypermarket chain came under criticism for failing to protect the e-mail addresses and credit card details of 50,000 customers. CloudCom Inc., a web services company, identified that the lapse was because of a worm that had breached the hypermarket’s internal servers through an unauthorized e-mail, and that the anti-malware system failed to catch the worm. Which of the following actions should CloudCom take to restrict such malwares from entering the hypermarket’s internal network? • Install a firewall • Use a virtual private network to connect its users • Whitelist the malware • Update the anti-malware system’s database Robert, an ardent blogger, is approached by the marketing manager of LaBelle, a famous cosmetic brand, to write positive reviews about the company’s products. Robert knows that the company’s products cause allergic reactions and to write positive reviews about the products would be unethical. Which of the following decisions will be considered an ethical lapse? • To write positive reviews about the product • To turn down the company’s offer • To write a review after testing the product • To inform people about the products’ allergic reactions After a series of thefts in an organization, the management is considering whether or not to install cameras inside the office. The management is torn between violating the privacy of employees and preventing future thefts from taking place. This scenario illustrates an __________.


• ethical dilemma • ethical lapse • absence of codes of professionalism • absence of codes of ethics Kwalkon Computing released a new software update for their calendar app. The update synchronizes both personal and business calendars seamlessly. The update has all the relevant bug fixes and promises to make the app work faster. Since there have been no recent complaints about the software, the update must have solved all the customers’ issues. Which of the following questions would be most relevant in evaluating the argument? • Has enough time passed after the release of the update? • What is the memory required in order to install the update? • What is the pace at which the updated app will perform its functions? • Has Kwalkon released any updates for their other software applications? 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 of one box of fish sticks to $3.50 while also increasing the package size. • The company will sell fish sticks worth $2.50 at $3.00 per box. • 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. Michael deposits $35,000 today in his bank account. Calculate the approximate amount he will have at the end of six years if interest is 10% per year and is compounded semiannually.


$115,560 $70,060 $50,180 $62,860 Irvin’s Ice Creams, a popular chain of ice cream parlors present only in the United States, is looking for opportunities to grow its business. If the firm conducts a SWOT analysis of its performance, which of the following would be categorized as a threat? • The growing demand for ice creams in international markets • The entry of international ice cream brands in the U.S. market • The firm’s inability to scale up in terms of revenue • The firm’s positive brand value among customers The intensive 45-day training program for new employees at Zed Inc. requires trainees to take several tests that trainers at Zed Inc. have to grade. Recently, there has been a 30% increase in hiring. With the present number of trainers, it is not possible to finish grading all the tests in time. HR manager: The training team should transfer all the tests for the trainees to software that will grade them automatically. Our hiring budget will not allow the hiring of additional people to manage the increased number of trainees. Using auto-grading software will not require any funds from our hiring budget. Which of the following is assumed by the HR manager? • Using auto-grading software will allow Zed Inc. to support all of its potential training needs in the future. • Trainees will need a shorter duration of time to answer the tests after the auto-grading software is implemented. • Zed Inc. will not need to hire additional people to operate the autograding software. • The duration of the training cannot be reduced without negatively affecting the quality of the training.


Hush Sports Inc., sellers of sportswear, transitioned from being just a brick-and-mortar store to an online marketplace for sports goods. Hush Sports still relied on customers to call the store for feedbacks or complaints. To speed up the process, the company updated its Web site with options for the customers to review the products they purchased. Positive reviews attracted more customers, and negative reviews helped the company improve its products. Which of the following strategies has Hush Sports included in its business process? • Crowdsourcing • Cooperative advertising • Blogging • Conversational marketing A shift in the demand curve for pretzels increases the price of pretzels from $1.25 to $1.75 and its quantity demanded from 30 million to 35 million. The price elasticity of demand for pretzels is _____. 5 million pretzels per dollar 2.32 $1.50 per pretzel 0.46 Dupon Inc. is a leading manufacturer of handheld game consoles. Each console manufactured by the firm has a different game. Although the video game industry faced a sharp decline in demand with the introduction of mobile games, Dupon still holds a significant market share for handheld games compared to its competitors. To hold the market share, Dupon provides discounts to customers purchasing more than one console. Which of the following stages of the product life cycle is Dupon’s products going through? • The decline stage • The growth stage • The maturity stage • The introduction stage LaBelle, a famous cosmetic brand, introduces a new skin cleanser. The company pays bloggers to write positive reviews about the product. The


consumers who follow these blogs assume that the bloggers are sharing their personal experiences and decide to try the product. They are unaware that the blogs are part of a marketing campaign. After a few days of using the product, they complain of rashes and allergies. The bloggers can be charged with __________. • assault • negligence • battery • Defamation Mark is expected to receive $950 at the end of two years. Calculate the present value of this amount if the discount rate is 6%. • $1690.99 • $896.23 • $845.50 • $1792.45 Marketers at Cream & Fresh Ice Creams update the company’s web site and online journals regularly with information about new ice creams. Readers who are interested in the articles updated on the company’s web site and online journals share the links with their friends who further share it with more people. Some readers try the ice creams and add their own comments to the web site and online journals. Which of the following strategies is the company using to promote its products? • Telemarketing • Wholesaling • Stealth marketing • Blogging Managers at Hush Sports Inc., leading manufacturers of sports apparel, are contemplating manufacturing high-end maple baseball bats. To understand the existing demand for the product, the marketing managers decide to set an online campaign, promoting the product through blogs, videos, and interactive forums. Which of the following approaches should the company adapt in its campaign?


• Posting messages that the company would not prefer to convey to an audience face-to-face • Replying to the consumer queries about the advantages of using highend maple baseball bats • Restricting the consumers from posting comments on the company’s Web site • Withholding information that would cause potential concern over the product’s quality Sophie owns SugarCream bakery that produces 20 pastries in a day. The price of one pastry is $12. If she hires another worker, she will be able to produce 24 pastries in a day. Assuming that she operates in a competitive market and aims to maximize her profits, she decides not to hire the additional worker. Which of the following explains why Sophie did not hire the additional worker? • The cost of hiring the additional worker was greater than the value of producing additional pastries. • The cost of hiring the additional worker was less than the average product of the additional worker. • The cost of hiring the additional worker was less than the marginal product of the additional worker. • The opportunity cost of hiring the additional worker was zero. Rikan Inc.’s credit sales for the year 2016 are $5,000,000, and its gross profit is $1,500,000. The company’s average inventories are $595,000. Its average accounts receivable is $750,000 and average accounts payable is $640,000. From this information, calculate the company’s cash cycle. (Round the answer to one decimal.) 50.1 days 199.5 days 36.8 days 183.5 days Sam’s stores, a popular retail store, uses barcode scanners to scan each product that it sells. The data generated from the scanners are saved in a database. The database is updated every time a product is scanned and


sold. This computer-based information system helps managers access and analyze sales data. Which of the following systems is the store using for its business? Transaction processing system Supply chain management system Expert system Electronic commerce system Colneith Corp. is a pharmaceutical firm that mainly produces drugs for Alzheimer’s disease. The Medical Association of Zachary Islands conducted a study on the effectiveness of the firm’s drugs and found that multiple dosages of drugs were fatal. This discovery would most likely lead to: • short-run profits for the firm. • a decline in the production of the drug. • an increase the production of the drug. • the exit of the firm from the market. Dupon Inc., a leading manufacturer of handheld game consoles, decides to enter the global marketplace. It decides to sell its products directly in a foreign country. The foreign government denies permission to the company on the grounds of protecting domestic manufacturers. However, the government is willing to change its decision if the company contributes to local employment. Which of the following strategies of entering the foreign market will present the least risk to the company while also meeting the government’s condition? • Direct exporting • Joint venture • Direct investment • Contract assembly Which of the following alternatives will give the lowest present value? • Receiving $650 at the end of three years at an interest rate of 10% compounded annually • Receiving $500 at the end of three years at an interest rate of 11% compounded annually


• Receiving $450 at the end of two years at an interest rate of 9% compounded annually • Receiving $550 at the end of two years at an interest rate of 8% compounded annually Tony holds 350 shares of a company’s stock. At the end of 2015, the market price of each share was $32. During the year 2016, the company pays $2.25 in dividends per share. At the end of 2016, the company’s stock is priced at $39.50. Calculate the percentage return for holding the company’s stock during the year 2016. (Round the answer to one decimal place.) • 8% • 5% • 6% • 4% Rodriquez works as a scriptwriter in an advertising agency. He has been assigned the task of developing a script for a television commercial. He prepares a rough draft of the script and submits it to his manager, Carl. Carl reads the script but derives a different meaning from it than what Rodriquez intended. According to the basic communication model, which of the following will be the next step? • Carl will refuse to provide feedback to Rodriquez. • Carl will respond with his interpretation of the script. • Rodriquez will be asked to narrate his script to an audience. • Rodriquez will choose a communication channel to transmit his message. The owners of Brizzels’ Food Truck send live notifications to their customers when their truck is close to the customers’ locations. Their strategy was in response to a customer’s blog post about having to wait for long hours till the truck arrives. Which of the following strategies does this scenario illustrate? • Social commerce • Social intelligence


• Social publishing • Social analytics Managing Director: Our business has expanded over the past couple of years. The profit margin and revenue earned have both gone up. On careful analysis of our client base, we have found that all of our clients belong to the same culture as us. They also hold ethical values that are similar to ours. Based on this finding, it would be best if our company stops training our employees on cultural sensitivity and instead gives our employees specialized training in market research analysis. The Managing Director’s argument is flawed because it: • disregards the influence that a training on cultural sensitivity could have on the company’s profit margin. • fails to consider that the suppliers for the company might belong to a different culture than the clients. • takes for granted the continued increase in revenue that the company will experience. • assumes that training in market research analysis is less expensive than training in cultural sensitivity. Calculate the cost of preferred stock from the information given below: • 73% • 27% • 45% • 98% When Ronike Ltd. decided to change its logo, it encouraged its employees to get involved in the decision-making process. Employees were asked to engage in brainstorming sessions by forming groups and working together in teams. Which of the following is a likely outcome of their teamwork? • Increased diversity of views among team members will help improve decision making.


• The dangers of groupthink will be reduced. • Team members are less likely to support the final decision regarding the change in logo. • Team members who have hidden agendas will be automatically filtered and removed. Harry is receiving a loan of $3,000 from his friend to pay off some outstanding bills. The loan is structured in such a manner that the interest rate is 6% for the first year, after which the interest rate increases by 2% per year until the loan is paid. Calculate the amount that Harry will have to pay his friend if he waits for a period of four years to pay off the loan. (Round the answer to one decimal place.) • $4,231.20 • $4,005.50 • $3,777.80 • $2,127.10 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? • Market surveys are not a reliable method to determine the stages in a product’s life cycle. • Consumers have realized that the presence of caffeine in energy drinks is detrimental to their health. • Both products were not well received in the market. • White Unicorn did not spend more time in the maturity stage than Energize did. Rosa Maria attends an interview for a sales manager position at Pixxels Inc. As part of the interview process, she is asked to reveal personal


information. The company gets Rosa’s consent to share the information with a security company for background verification. Which of the following actions, if taken by the security company, will be unethical? • Contacting Rosa’s previous employer for verification • Selling Rosa’s personal information to a third party • Requesting for additional information • Providing Pixxels Inc. reports on Rosa’s online behavior The government of Seronia is deeply concerned about the rate of obesity in the country. It has framed a policy that requires food and beverage manufacturers to be taxed according to the sugar and fat content in their products. This will make high-sugar and high-fat products more expensive for consumers. The government believes that this policy will surely benefit the health of Seronian citizens. Which of the following statements, if true, would undermine the government’s argument? • The policy is not applicable to food products that are not manufactured within Seronia. • Recent campaigns done by nutritionists have increased consumer awareness about the adverse effects of a high-calorie diet. • The Seronian government’s expenditure on providing health care to its citizens has steadily increased over the last ten years. • Consumers tend to decrease the consumption of some healthy food products to afford the prices of high-sugar and high-fat products, which are tastier. Marketing head of Tosel Inc.: Our company has been using an advanced CRM platform, Inito, which is popular among businesses for its sophisticated functionality. Inito allows us to store customers’ psychographic data as well as their recent shopping behavior. However, since we began using Inito, we have not been able to generate a significant greater number of leads. Clearly then, using CRM software does not help in generating any business. Which of the following statements, if true, would weaken the argument


above? • It is difficult to create a successful marketing strategy for a customer base that greatly varies in demographic and psychographic factors. • Inito is the most commonly used CRM platform. • Tosel has integrated Inito into the other information systems used by the company. • Tosel has not invested the resources required to maintain its database of customers’ psychographic data and shopping behavior. Cream & Fresh Ice Creams pays bloggers to write positive reviews about its ice creams. Readers who are interested in the product read these reviews and share the link with their friends who further share the reviews with more people. Some readers try the ice creams and add their own comments to the blog. Which of the following strategies is the company using to promote its products? • Stealth marketing • Wholesaling • Online word-of-mouth marketing • Telemarketing In 2005, Susana purchased a 7-year zero coupon bond for $967.23. The face value of the bond was $1,200. Calculate the capital gain on this bond in 2006. • $42.56 • $30.75 • $78.56 • $23.56 Truno Corp. plans to purchase new project management software. There are three available choices in the market: Telpro, Morse, and Verla. Systems manager: I have compared the three available choices. All three choices are similar in quality, features, and usability. However, Morse is the most commonly used software, and it also has the lowest purchase price. Therefore, the best choice of project management software for us would be Morse.


Which of the following statements, if true, would strengthen the systems manager’s argument? • Morse is easily customized to fit individual customer needs. • Employees at Truno Corp. do not support the idea of using project management software. • The project management requirements of other users of Morse are not similar to those of Truno Corp. • The prices of Verla and Telpro have fluctuated considerably over the past 5 years. MaxSale, a popular supermarket, is approached by Hartane’s, an organic food producer, to sell its products through the supermarket’s stores. MaxSale demands a substantial amount of money to display these products for a minimum duration. MaxSale uses this strategy to charge premium amounts to a select few producers as a means to reduce competition. By doing so, which of the following consumer rights is MaxSale violating? • The right to be informed • The right to be heard • The right to choose • The right to safety ------------------------------------------------------------------------

BUS 475 Capstone Final Examination Part 2 (New, 2018)

For more course tutorials visit www.newtonhelp.com


BUS 475 Capstone Final Examination Part 2 A company declared a cash dividend of $8560 on December 5 2015. The company made a cash dividend payment on January 8, 2016. What is the cumulative effect of the declaration and payment of the cash dividend on the company’s financial statements? Total liabilities will remain the same, and total assets will increase by $8,560. Stockholders’ equity and total assets will decrease by $8,560. Stockholders’ equity will increase by $8,560, and total assets will remain the same. Total assets and liabilities will increase by $8,560.

Rilm Corporation has been recording investment income as revenue for the past year with the aim of making the financial condition of the company appear better than it actually is. Jon, one of the company’s employees, becomes aware of this fraudulent activity and immediately reports it to the appropriate authorities. After conducting several investigations, the authorities book the company under the SarbanesOxley Act. Which of the following statements best explains why Jon did not hesitate to alert the authorities about the company’s fraudulent activity? Under the Sarbanes-Oxley Act, whistleblowers who suffer retaliation are allowed to recover criminal damages but not civil damages. The Sarbanes-Oxley Act requires accounting firms to separate their auditing and consulting functions. There are no limitations to the protections offered by the Sarbanes-Oxley


Act to whistleblowers. The Sarbanes-Oxley Act provides for the reinstatement of whistleblowers in cases of improper termination. LaBelle a famous cosmetic brand introduces a new skin cleanser. The product does extremely well and reaps huge profits for the company. After using the product for a few months, consumers complain of rashes and allergies. An external chemical agency accuses the company of using banned substances in its products. When investigated, the company’s CEO confesses that he knew about the substance but did not act because of the product’s initial success. Which of the following could be the cause for the CEO’s unethical behavior? The slippery slope Overvaluing outcomes Indirect blindness Ill-conceived goals Elena Corporation owes Volmare Inc. an advertising agency a sum of $42000 for services rendered. When Elena Corporation goes public it offers the agency 7000 shares of its common stock in exchange for the payable service cost. The agency accepts the offer. The stock trades at $6 per share and the par value of the stock is $1. Which of the following is the correct journal entry to record this transaction in the books of Elena Corporation?

CoolWindows Corp. produces 2000 air conditioners per week in three plants: Plant I, Plant II, and Plant III. Plant I produces 800 air conditioners per week, Plant II produces 500 air conditioners per week, and Plant III produces 700 air conditioners per week. The probability of an air conditioner being defective is 7% for Plant I, 5% for Plant II, and 6% for Plant III, respectively. In a random check, a defective air conditioner is found. What is the probability that the air conditioner was produced in Plant II?


25 18 20 75 Calculate the expected return for a stock based on the following information.

Expected dividend $2.20 Current price $47.82 Expected growth rate 5.67% 6% 27% 87% 46%

As a common practice Rova Inc. mostly collects upfront payments for goods that will be delivered to customers in the future. Unearned revenues contribute significantly to the company’s current liabilities. Commentator A: The advance cash received from customers can be used to finance the company’s operations, and the corresponding liabilities that are recorded will appear as sales in future financial statements. Therefore, this practice is beneficial to Rova Inc. and should be continued.

Which of the following statements, if true, weakens commentator A’s argument? Rova Inc.’s ability to deliver exactly as per its commitments to its customers is frequently impacted by its unreliable suppliers.


Rova Inc.’s long-term liabilities are not offset by its current assets. Rova Inc.’s cash flow statement shows that the company does not have enough cash to scale up its operations in the next year.

A majority of the orders received by Rova Inc. from its customers are for customized products. The senior management of Reska Corp. realizes the importance of encouraging employees to be creative. In the previous year, the company organized quarterly town hall meetings, where employees were given the opportunity to share innovative ideas to tackle the issues faced by the company and to improve the company’s overall performance. However, this plan did not yield the desired result. The CEO of Reska Corp.: This plan failed because employees tended to be apprehensive about expressing their ideas in public as they did not know how the ideas would be received. We must change our strategy and give employees the opportunity to express their ideas to their managers in person. This will make the employees feel comfortable expressing their creativity. Which of the following is assumed by the CEO? Unless the employees of Reska share their creative ideas, the company’s overall performance is unlikely to improve. Employees feel less apprehensive about expressing their ideas to their managers than about expressing them in public. Reska’s employees want to be creative at their jobs. Companies with a creative workforce are less resistant to change than those lacking creativity.

Melanie and Peter are discussing the limitations of internal control


systems in organizations. Melanie believes that the human element is an insignificant factor in internal control systems. If Peter wants to refute this view, which of the following points should he put forth? Small companies have more efficient internal control systems as they do not need to segregate duties or provide for independent internal verification. Collusion between two individuals can eliminate the protection offered by segregation of duties in an internal control system. A well-built internal control system has inbuilt controls to reverse the results of employee indifference and carelessness. The size of an organization determines the expectations from an internal control system in the organization.

Cryser Inc. specializes in manufacturing wind turbines. In order to increase the efficiency of its manufacturing process, the management decides to restructure its shop floor into several workshops. Each workshop specializes in a specific function. The engineers working in the company raise concerns that their jobs will become monotonous if each employee performs only one of those functions. Which of the following is a soft tactic that the management can use to influence the engineers? Convincing the union leader to persuade other engineers Explaining the benefits of the new structure Demanding the engineers to comply with the authority Promising monetary benefits

Jeremia joins as the new marketing manager in a leading multinational company. The company usually advertises its products through newspapers, television, or trade fairs. Jeremia invites different product


managers within the company to discuss and find out new ways of creating consumer awareness for the company’s products. Several members of the group are inclined toward Jeremia’s idea of using social media, while others are content with the present promotional strategies. Which of the following stages of the group development process are the managers experiencing? Performing Forming Storming Norming

Vonik Solvers Inc. receives $40,000 in cash by issuing 15,000 shares of common stock at the par value of $2 per share.Which of the following is the correct journal entry to record this transaction? Cash

80,000

Common Stock

30,000

Additional Paid-in Capital Common Stock

50,000 40,000

Cash

30,000

Additional Paid-in Capital Cash Common Stock Additional Paid-in Capital

10,000 40,000 30,000 10,000


Common Stock Cash Additional Paid-in Capital

80,000 30,000 50,000

Cero Inc. is an oil and gas company that operates in the nation of Lumnia. Cero has incurred unforeseen expenses this year because of an environmental lawsuit filed against the company for accidentally causing an oil spill in a marine area in Lumnia. Therefore, despite Cero’s earnings being high, the company’s net income is much lower than what the company anticipated. CFO of Cero Inc.: Our operations are compliant to the current environmental laws. Accidents such as the oil spill caused by Cero Inc. are extremely rare. Therefore, the consequences of the environmental impacts of our operations should be categorized as nonrecurring costs in our financial statements. Cero’s shareholder: Cero Inc.’s earnings steadily increase every year. Since the oil spill is a onetime incident, there is no need to worry about its impact on next year’s profits.

Which of the following statements, if true, weakens the CFO’s argument? Cero Inc. categorizes any change in accounting principles as a nonrecurring expense. A change in the taxes applicable to Cero Inc. cannot be listed as a nonrecurring expense unless it is unanticipated. In the future, Lumnia’s environmental laws are likely to undergo


frequent changes because of increasing environmental activism in Lumnia. Cero Inc.’s earnings come from many other operations that are based outside Lumnia. Telda Corp. is a large accounting firm. It has an office in each of the 27 states of Kavenia.

The chairperson of Telda Corp.: I believe that if employees work in the same office for a long time, issues like favoritism, complacency, and misuse of authority are likely to develop. Therefore, I propose a policy that requires at least the employees in managerial positions and above to be transferred to a different office every five years. This policy will be well received by our employees and discourage them from leaving our company. Which of the following statements, if true, would most seriously weaken the chairperson’s policy? The cost of living in Kavenia varies from state to state. Employees are more likely to switch jobs within their city than to relocate to a new city for their current jobs. The employees of Telda Corp. would have to be paid a relocation allowance if they are transferred to a different city. There is a high rate of attrition among Telda Corp.’s employees who are not in managerial positions.

The HR manager of Delta Corp.: According to our rewards and recognition program, employee achievements are acknowledged and employees are given gift vouchers through emails on reaching milestones and targets. I feel this is not enough to make employees feel appreciated. In my previous company, work anniversaries and


professional achievements were celebrated in organization-wide meetings, where the concerned employee would be publicly rewarded. After all, I would love it if my efforts were recognized like this! Therefore, such an idea would be a great success in our company. The HR manager’s argument is flawed because it: dismisses the possibility of increasing the value of the gift vouchers that are given to the employees at present. fails to prove that employees of Delta Corp. feel unappreciated. fails to recognize the effort put in by his team to implement the existing rewards and recognition program. fails to consider that other people might perceive appreciation differently than him.

The management team at Cryser Inc., manufacturer of wind turbines, aims to increase the company’s market share by 20% by the end of 2017. The respective functional heads in the company inform their teams that they will get a substantial bonus if they are able to achieve this target. Which of the following stages of the goal-setting process is the company in? Providing support and feedback Creating action plans Promoting goal commitment Setting goals calculate the cash flows from investing activities based on the following information. Cash received from customers $67,550 Cash paid to suppliers 24,000 Purchase of equipment 230,000 Income tax paid 2,800


Payment of dividends 115,000 Proceeds from sale of machinery 105,000 Interest paid 1,500 Proceeds from issue of long-term debt 84,000 Purchase of stocks 87,500 Receipts from sale of equity instruments 177,300 $(35,200) $39,250 $(31,000) $125,000 Raubac Inc. has an earnings before interest and taxes (EBIT) of $350,000. Raubac Inc.’s capital structure consists of a long-term debt of $950,000 (costing 4%) and 110,000 issued shares of common stock at a market price of $6 per share. To bring down Raubac’s dependence on debt, the company is planning to reduce its debt by $200,000 by selling additional shares of common stock. Raubac’s EBIT will not change with the change in capital structure and will remain in the 40 percent tax bracket. Which of the following is a result of the change in Raubac’s capital structure? Raubac’s earnings before taxes (EBT) will remain unchanged. Raubac’s earnings per share (EPS) will increase by $0.57. Raubac’s earnings before taxes (EBT) will reduce by $8,000. Raubac’s net income will increase by $4,800.

The management team at Cryser Electronics Inc., manufacturer of electrical generators, aims to increase the company’s market share by 20% by the end of 2017. To achieve this target, Marcus, the marketing manager, assigns specific sales targets to individual salespeople and retailers. In this scenario, the sales target is a(n) __________. behavioral goal project goal


task goal objective goal

The CEO of Wrenn Corporation is convicted of committing accounting fraud. After several in-depth investigations, it is found that although the CEO of the company was not aware of the fraud, he received 1.5 million dollars in the form of bonuses and stock profits during the company’s fraudulent period. The Securities and Exchange Commission orders the company to restate its financial position and furnish the correct financial statements. As per the Sarbanes-Oxley Act, which of the following is a likely consequence that will follow? The CEO will be held personally liable for the company’s misconduct during the fraudulent period. The CEO will be asked to return the money that he or she received during the company’s fraudulent period. The company will be allowed to grant personal loans to its executives provided that it can prove the creditworthiness of the executives. The company will be asked to merge its auditing and consulting functions. Calculate the cash flows from financing activities based on the information given below. Depreciation $ 770 Purchase of machinery 4,000 Increase in fixed asset 900 Payment of dividend 600 Issuance of short-term debt 1,500 Repayment of long-term debt 5,700 Increase in bank borrowings 6,200

$1,400


$630 $2,000 $4,130 Calculate the net income of Tinekal Corporation from the following information. Depreciation expense $ 850 Rent expense 500 Salaries expense 700 Supplies expense 650 Interest expense 400 Revenue from sales 5,000 Profit from sale of assets 1,000 Dividend 700

$2,600 $3,600 $2,900 $1,900

Omega Corp. released the unaudited financial statement prepared by its accountants. According to the statement, the profit margin of the company has increased. The sales of its electronic appliances have also increased. Based on the unaudited financial statement, buying Omega Corp. shares would be a good investment.

Which of the following, if true, casts the most doubt on the conclusion? Omega Corp. does not maintain more than a month’s supply of


inventory. The sales of other products of Omega Corp. have not shown the increase that the sales of electronic appliances have shown. The earnings reported in the audited financial statement for Omega Corp. are lower than that reported in the unaudited financial statement. The fixed expenses of the company have increased significantly.

BrightLife, a leading insurance company, provides incentives to salespeople based on the number of prospective customers they meet in a day. The salespeople, however, often spend time with their friends and then claim to have met the prospective customers. They are paid incentives based on their claims. The company’s CEO realizes that the number of customers the company has is significantly less compared to the number of prospective customers that the salespeople claim to have met. To rectify the unethical behavior of the salespeople, the company now pays incentives based on the number of sales each person makes. Which of the following could be a cause for the salespeople’s unethical behavior? Motivated blindness Indirect blindness Ill-conceived goals

Maertge Airlines purchases an aircraft for $84,000,000 on January 1, 2016. The residual value of the aircraft is estimated at $7,500,000, and its useful life is estimated at 25 years. Applying the double-decliningbalance method of depreciation, the depreciation expense recognized for the year ended December 31, 2018 will be __________. $6,182,400 $3,096,576


$5,687,808 $6,720,000

Luisana runs a clothing boutique that sells designer clothes. In order to expand the clothing collection in the boutique, Luisana wants to buy some clothes from a fashion designer. After examining Luisana’s audited financial statements, the fashion designer concludes that she is assured a collection from Luisana.

Which of the following statements will weaken the argument? The fashion designer makes her collections within two months of sale. Luisana’s liquid assets are just enough to meet her current liabilities. Luisana’s boutique faces increased competition from other designer boutiques. Luisana has owned the boutique for only three years and has no prior experience of running a business.

WarmLiquid Corp., a manufacturer of water heaters, produces 30 water heaters per week. Past records indicate that 10% of total water heaters produced in a week are likely to be defective. Suppose a quality check was conducted on a sample of six water heaters. What is the probability that four out of six water heaters will be defective? 0.08 0.56 0.46 0.76


In an apparel store, one individual is assigned the task of recording the cash received from customers. Another individual is responsible for the creation and handing over of credit memos to customers. These measures are taken to avoid the risk of fraud. Which of the following principles of internal control activities does this scenario best illustrate? Physical controls Documentation procedures Segregation of duties Independent internal verification Gharial LLC is a company that manufactures and leases cars. To increase its production capacity, the CEO of Gharial LLC has decided to build a new manufacturing plant. The company requires a loan from a bank, and submits its financial statements to the bank. The CEO believes that the loan will be approved because of the company’s liquidity.

Which of the following strengthens the CEO’s argument? The cost of building the manufacturing plant will be offset by the profit Gharial LLC earns. Gharial LLC’s financial statements show a positive working capital. The manufacturing plant will be amortized over the next thirty years. Gharial LLC’s earnings per share are equal to that of other similar companies.

Telda Corp. is a large accounting firm. It has an office in each of the 27 states of Kavenia.


The chairperson of Telda Corp.: I believe that if employees work in the same office for a long time, issues like favoritism, complacency, and misuse of authority are likely to develop. Therefore, I propose a policy that requires at least the employees in managerial positions and above to be transferred to a different office every five years. This policy will be well received by our employees and discourage them from leaving our company.

Which of the following statements, if true, would strengthen the chairperson’s argument? Cultural differences may lead to different working styles in the different office locations of Telda Corp. Introducing policy changes without consulting the relevant stakeholders is against the work culture of Telda Corp. The technical skills required to work vary from team to team in Telda. Rotating employees among different office locations leads to greater employee cohesion in companies. Secaucuss Co. has been in the business of manufacturing office supplies for the last five years. Recently, the company issued more shares to the public to raise capital for its expansion. Expanding its operations into office maintenance helped it generate additional cash inflows. Since the company expanded and issued more shares, the stockholders’ equity should also have increased. However, the stockholders’ equity went down this year.

Which of the following statements best explains why the stockholders’ equity went down?


The company purchased some new machines to speed up its manufacturing process. The company employed a predatory pricing strategy to increase its market share. The company collected revenue from services provided on an accrual basis. The company declared a 2-for-1 stock split during the current year. Reinek Company sold a fixed asset for $25,000. The asset was originally purchased at a cost of $64,000. On the date of sale, the accumulated depreciation was $53,000. Calculate the gain or loss on the sale of the asset. Loss of $39,000 Gain of $14,000 Loss of $36,000 Gain of $25,000 Cardice Services Inc. employs more than 5,000 telephone operators globally to address customer complaints. To improve the response time for addressing these complaints, the management decides to automate the responses to all the frequently asked queries. The management predicts that at least 60% of the customer queries will be resolved without the need for human intervention. If the company implements the process, at least 2,500 telephone operators will lose their jobs. To oppose the management’s decision all the employees threaten go on an indefinite strike. Which of the following contingency approaches is commonly used to overcome resistance in such situations? Explicit coercion Facilitation and support Participation and involvement


Negotiation and agreement From the information given below, calculate the net cash flows from operating activities using the indirect method. Net income $170,000 Depreciation 5,750 Loss on disposal of plant asset 4,000 Increase in inventory 7,500 Increase in prepaid expenses 5,460 Decrease in accounts payable 6,750 $160,040 $152,040 $173,540 $176,460 Elanke, an owner of a restaurant, has the following financial information for the year ending December 31, 2016.

Revenue earned $410,000 Cash received from customers 300,000 Expenses incurred in the purchase of ingredients 250,000 Depreciation incurred during the year 700 Cash paid for miscellaneous expenses incurred in the year 2015 120,000

Based on the accrual basis of accounting, Elanke’s net income for the year is __________. $159,300 $39,300 $339,300 $459,300


A company issues 100,000 shares at $50 per share. It has a debt-equity ratio of 2:1. If the company announces a 3-for-1 stock split, what will be the result? The total stockholder’s equity will increase and the debt-equity ratio will decrease. The total stockholder’s equity will decrease and the debt-equity ratio will remain unchanged. The total stockholder’s equity and the debt-equity ratio will decrease. The total stockholders’ equity and the debt-equity ratio will remain unchanged. Calculate the operating profit or (loss) from the information given below.

Sales revenue $320,000 Sales returns 11,000 Cost of goods sold 210,000 Selling expense 23,520 Administrative expense 46,270 Marketing expense 26,880 Research and development 6,300

($3,970) $3,970 $7,030 ($7,030)

The HR manager of Delta Corp.: According to our rewards and recognition program, employee achievements are acknowledged and


employees are given gift vouchers through emails on reaching milestones and targets. I feel this is not enough to make employees feel appreciated. In my previous company, work anniversaries and professional achievements were celebrated in organization-wide meetings, where the concerned employee would be publicly rewarded. After all, I would love it if my efforts were recognized like this! Therefore, such an idea would be a great success in our company.

Which of the following statements, if true, weakens the HR manager’s argument? The HR manager of Delta Corp.: According to our rewards and recognition program, employee achievements are acknowledged and employees are given gift vouchers through emails on reaching milestones and targets. I feel this is not enough to make employees feel appreciated. In my previous company, work anniversaries and professional achievements were celebrated in organization-wide meetings, where the concerned employee would be publicly rewarded. After all, I would love it if my efforts were recognized like this! Therefore, such an idea would be a great success in our company. Employees are not motivated to perform well at their jobs if their work is not appreciated and rewarded. The HR manager’s previous company did not offer promotions to its employees easily. Delta Corp.’s policy requires the CEO of the company to be present in every town hall. Delta Corp. does not have sufficient funds to organize frequent town halls. Calculate the cost of goods sold based on the following information.


Inventory at the beginning of 2016 $ 54,000 Purchases 450,000 Purchase returns 12,800 Inventory at the end of 2016 60,000

$443,200 $431,200 $491,200 $444,000 Earnings per share (EPS) is an indicator of a company’s profitability and how its stocks are valued. EPS of a company is directly proportional to its net income. The net income of Tolut Inc. for this year has decreased by 10 percent from last year’s figures. Therefore, the company’s EPS would be less than what it was last year.

Which of the following statements, if true, strengthens the argument? Tolut Inc.’s stocks were undervalued in the market last year. A high EPS indicates that the company has a high potential for growth in the future. Tolut Inc. has issued additional common shares in the current year. Earnings per share do not necessarily fall every time there is a rise in the taxes paid by the company. Raetal Inc. acquired 2,000 shares of its own stock of par value $1 for $20 per share. Which of the following is the correct journal entry to record this transaction? Treasury Stock

40,000

Cash

40,000

Treasury Stock

2,000


Common Stock Treasury Stock Cash Cash

2,000 2,000 2,000 40,000

Treasury Stock 40,000 Leadership roles require the display of classic extrovert behavior such as speaking confidently in public, building large social networks, and allowing your successes as well as failures to be scrutinized by your stakeholders. These abilities are so integral to leadership roles that people who step into such roles learn to master extrovert behavior regardless of their actual personalities.

Which of the following can be inferred from the given passage? One can acquire extrovert behavior by becoming a leader. Having large social networks helps in the development of publicspeaking skills. Leaders should learn from both their successes and their failures. People who are extroverted become successful leaders. Janet works as a senior software developer in a multinational IT firm. She prefers to work as an individual contributor and volunteers to work on challenging projects. The firm encourages Janet and other people like her by assigning them to projects that require a great deal of innovation. The firm motivates Janet by appealing to her need for __________. power security achievement


affiliation Calculate the revenue for the year ending December 31, 2016, based on the information given below.

2016 2017 Retained earnings, January 1 $14,500 Revenue for the year Y 48,500 Expenses for the year 44,800 42,700 Dividends paid 3,500 5,700

$

X

The ending balance of retained earnings on December 31, 2017, is $18,500. $15,400 $52,200 $18,400 $33,800 The board of directors of Yudel Corp. is looking for a new managing director for the company. They find a candidate, Linda, who is hardworking, passionate, and confident. These are the characteristics that all the past leaders of Yudel Corp. had in common. Therefore, the board concludes that hiring Linda as the new managing director will contribute positively to the company’s success.

The board of directors relies on the assumption that: Linda has worked in companies similar to Yudel Corp. in the past. the leaders of other companies have characteristics in common with the leaders of Yudel Corp. Linda will not have any other job offer to consider when Yudel Corp.


offers her the position of managing director. Linda’s goals, as a leader, are compatible with the culture and vision of Yudel Corp. Financial analyst: Linksus Tech is a company that manufactures drill bits and screwdrivers. Over the last year, its sales have not shown a significant increase. The company has a large quantity of inventory on hand, its accounts receivable have doubled, and its accounts payable have increased threefold. Given this, the company should try to realize its current assets at the earliest to stay afloat.

Which of the following, if true, would strengthen the argument? Linksus Tech has applied for a short-term loan to meet its working capital requirements. The current liabilities are expected to be due within the next three months. The demand for the products sold by the company is expected to increase. The company will introduce a much-awaited new product into the market in the following year. Neha is a communications manager in a reputed software company. She firmly believes that men do not prefer working with women supervisors because they think women are inferior to them. Jordon is Neha’s manager and elder to her by 10 years. Every time Neha interacts with Jordon, she downplays her dominant nature by acting naive. However, she is aggressive and dominant with younger employees. Which of the following approaches to managing diversity should be used to help Neha overcome her prejudiced attitude? Educating Neha about stereotyping people of different age and sex Isolating Neha by putting her in special projects that require minimum interaction with other employees Acknowledging Neha’s beliefs but not valuing or accepting them


Hiring more women employees to create an environment that is more diverse Aaron has recently been recruited as the managing director of Ikara Corp., which is a leading accounting firm with a global presence. He learns that the employees of Ikara felt that the previous managing director was unapproachable and did not encourage employees to express their problems or ideas to him. Aaron does not want to be perceived the same way. To appear friendlier toward his employees, he decides to use a bit of humor in his electronic communication. This will surely enable him to build a good rapport with the employees of Ikara Corp.

Which of the following, if true, most seriously undermines Aaron’s argument? Aaron has previously worked in companies where communication between employees was informal. Aaron’s electronic communication is mostly directed to the senior management of the company. Managers must seem approachable to their teams, especially when their teams are spread across the globe. Some employees of Ikara belong to cultures where humor is likely to be perceived as ridicule. Gharial LLC is a company that manufactures and leases cars. To increase its production capacity, the CEO of Gharial LLC has decided to build a new manufacturing plant. The company requires a loan from a bank, and submits its financial statements to the bank. The CEO believes that the loan will be approved because of the company’s liquidity. Which of the following, if true, weakens the CEO’s argument?


The price of Gharial LLC’s shares has remained constant over the past year. Gharial LLC specializes in high-end cars. The current ratio of Gharial LLC is higher than one. A majority of Gharial LLC’s current assets are in the form of inventory. CodeGiant Inc. is a startup company that specializes in software development. The government levies a sales tax of 7.5% on the sale of the company’s services. Mathew, the company’s CTO, decides to introduce a new functional structure that will reduce the time taken to develop each software. He believes that this will reduce the company’s costs and compensate for the taxes. When he presents his idea to the company’s investors, they become apprehensive that such changes may lead to internal conflicts. The respective department heads are also apprehensive because they do not know whether they will fit into the new structure. They question the validity of Mathew’s suggestion. Which of the following stages of the group development process does this scenario portray? Adjourning Norming Storming Forming ------------------------------------------------------------------------

BUS 475 Learn/newtonhelp.com  

For more course tutorials visit www.newtonhelp.com BUS 475 Capstone Final Examination Part 1 (New, 2018) BUS 475 Capstone Final Examin...

BUS 475 Learn/newtonhelp.com  

For more course tutorials visit www.newtonhelp.com BUS 475 Capstone Final Examination Part 1 (New, 2018) BUS 475 Capstone Final Examin...

Advertisement