Anda di halaman 1dari 18

BUS 475 Final Exam Study Guide 2012 Set 1

100 Answers from 2012 BUS/475 Final Exam


Reviewed and Prepared by ACCNerd.com. Thank you!
1) Although the U.S. has had a longstanding agreement with _____ after
the passage of NAFTA, _____ became the United States' second largest
trading partner.
A. Mexico, Venezuela
B. Canada, Venezuela
C. Great Britain, Paraguay
D. Mexico, Canada
E. Canada, Mexico
2) "Generally accepted" in the phrase generally accepted accounting
principles means that the principles __________.
A. have been approved for use by the managements of business firms
B. have been approved by the Internal Revenue Service
C. have substantial authoritative support
D. are proven theories of accounting
30) Building a dynamic organization is another way of describing which
function of management?
A. Staffing
B. Organizing
C. Leading
D. Controlling
E. Planning
4) Sam's Used Cars uses the specific identification method of costing
inventory. During March, Sam purchased three cars for $6,000, $7,500,
and $9,750, respectively. During March, two cars are sold for $9,000
each. Sam determines that at March 31, the $9,750 car is still on hand.
What is Sams gross profit for March?
A. $8,250
B. $750
C. $4,500
D. $5,250
5) Hess, Inc. sells a single product with a contribution margin of $12 per
unit and fixed costs of $74,400 and sales for the current year of
$100,000. How much is Hesss break even point?
A. 2,133 units
B. 6,200 units
C. $25,600
D. 4,600 units

6) As Plant Controller, you are trying to determine which costs over


which you have the most control on a day to day basis. Your goal is to
achieve better profitability. The Plant Operations Manager suggests that
overhead is the easiest area to directly reduce costs. Which of the
following items would be classified as manufacturing overhead?
A. The western divisions vice presidents salary
B. Cost of landscaping the corporate office
C. General corporate liability insurance
D. Factory janitor
7) What is the preparation of reports for each level of responsibility in
the companys organization chart called?
A. Master budgeting analysis
B. Exception reporting
C. Responsibility reporting
D. Static reporting
8) Disneys variable costs are 30% of sales. The company is
contemplating an advertising campaign that will cost $22,000. If sales
are expected to increase $40,000, by how much will the company's net
income increase?
A. $6,000
B. $12,000
C. $28,000
D. $18,000
9)
A.
B.
C.
D.

The cost of an asset and its fair market value are __________.
never the same
irrelevant when the asset is used by the business in its operations
the same on the date of acquisition
the same when the asset is sold

10) Which one of the following is a product cost?


A. Indirect labor
B. Sales persons salaries
C. Advertising costs
D. Office salaries
11) What exists when budgeted costs exceed actual results?
A. A budgeting error
B. An unfavorable difference
C. An excess profit
D. A favorable difference
12) The income statement and balance sheet columns of Pine Company's
worksheet reflects the following totals:
Income Statement
Balance Sheet
Dr. Cr.
Dr. Cr.
Totals
$58,000 $48,000
$34,000 $44,000

Closing entries are necessary for __________.


A. permanent accounts only
B. both permanent and temporary accounts
C. permanent or real accounts only
D. temporary accounts only
13) Managerial accounting __________.
A. is concerned with costing products
B. pertains to the entity as a whole and is highly aggregated
C. places emphasis on special-purpose information
D. is governed by generally accepted accounting principles
14) H55 Company sells two products, beer and wine. Beer has a 10
percent profit margin and wine has a 12 percent profit margin. Beer has
a 27 percent contribution margin and wine has a 25 percent contribution
margin. If other factors are equal, which product should H55 push to
customers?
A. Beer
B. Selling either results in the same additional income for the company
C. It should sell an equal quantity of both
D. Wine
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A. saver who demands money from the financial system
B. borrower who demands money from the financial system
C. borrower who supplies money to the financial system
D. saver who supplies money to the financial system
16) Maurice receives $100 as a birthday gift. In deciding how to spend
the money, he narrows his options down to four choices: Option A,
Option B, Option C, and Option D. Each option costs $100. Finally he
decides on Option B. The opportunity cost of this decision is __________.
A. the value to Maurice of the option he would have chosen had Option
B not been available
B. $100
C. $300
D. the value to Maurice of Options A, C and D combined
17) A production possibilities frontier will be a straight line if __________.
A. the economy is producing efficiently
B. the economy is engaged in trade with at least one other economy
C. increasing the production of one good by x units entails no opportunity cost in
terms of the other good
D. increasing the production of one good by x units entails a constant
opportunity cost in terms of the other good
18) In economics, the cost of something is __________.
A. what you give up to get it
B. often impossible to quantify, even in principle

C. the dollar amount of obtaining it


D. always measured in units of time given up to get it
19) A tax on an imported good is called a __________.
A. supply tax
B. trade tax
C. quota
D. tariff
20) Which of the following statements about GDP is correct?
A. GDP is to a nations economy as household income is to a household.
B. GDP increases if the total population increases.
C. GDP measures two things at once: the total income of everyone in the
economy and the unemployment rate.
D. Money continuously flows from households to government and then
back to households, and GDP measures this flow of money.
21) In computing GDP, market prices are used to value final goods and
services because __________.
A. if market prices are out of line with how people value goods, the government
sets price ceilings and price floors
B. Market prices are not used in computing GDP
C. market prices reflect the values of goods and services
D. market prices do not change much over time, so it is easy to make
comparisons between years
22) Which of the following statements about GDP is correct?
A. Nominal GDP values production at market prices, whereas real GDP values
production at the cost of the resources used in the production process.
B. Nominal GDP consistently underestimates the value of production, whereas
real GDP consistently overestimates the value of production.
C. Nominal GDP values production at current prices, whereas real GDP
values production at constant prices.
D. Nominal GDP values production at constant prices, whereas real GDP values
production at current prices.
23) Which of the following is not correct?
A. The U.S. debt per-person is large compared with average lifetime
income.
B. In 2005, the U.S. government had a deficit.
C. A potential cost of deficits is that they reduce national saving, thereby
reducing growth of the capital stock and output growth.
D. Deficits give people the opportunity to consume at the expense of their
children, but they do not require them to do so.
24) The part of the balance of payments account that lists all long-term
flows of payments is called the:
A. balance of trade.
B. financial and capital account.
C. government financial account.

D. current account.
25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics
in 2004. One of their contributions was to argue that if a central bank
could convince people to expect zero inflation, then the Fed would be
tempted to raise output by increasing inflation. This possibility is known
as __________.
A. the sacrifice ratio dilemma
B. the monetary policy reaction lag
C. the time inconsistency of policy
D. inflation targeting
26) In general, the longest lag for __________.
A. fiscal policy is the time it takes to change policy, while for monetary
policy the longest lag is the time it takes for policy to affect aggregate demand
B. both fiscal and monetary policy is the time it takes for policy to affect
aggregate demand
C. monetary policy is the time it takes to change policy, while for fiscal policy the
longest lag is the time it takes for policy to affect aggregate demand
D. both fiscal and monetary policy is the time it takes to change policy
27) Consider two items that might be included in GDP: (1) The estimated
rental value of owner-occupied housing; and (2) purchases of newlyconstructed homes. How are these two items accounted for when GDP is
calculated?
A. Only item (2) is included in GDP and it is included in the investment
component.
B. Item (1) is included in the consumption component, while item (2) is
included in the investment component.
C. Item (1) is included in the investment component, while item (2) is included in
the consumption component.
D. Both item (1) and item (2) are included in the consumption component of
GDP.
28) Managers will utilize __________ skills with increasing frequency as
they rise within an organization.
A. Professional
B. Interpersonal and communication
C. Technical
D. Professional
E. Conceptual and decision
29) Which of these represent skills that managers need?
A. Interpersonal, quantitative, and professional
B. Technical, interpersonal & communication and conceptual & decision
making
C. Professional, technical and interpersonal & communication
D. Conceptual & decision making, professional and technical
E. Interpersonal & communication, conceptual & decision making and
professional

30) The standards and rules that are recognized as a general guide for
financial reporting are called __________.
A. standards of financial reporting
B. operating guidelines
C. generally accepted accounting principles
D. generally accepted accounting standards

31) Your roommate is interested in starting a business and everybody


has been giving him different information about being an entrepreneur.
Since you have been studying about entrepreneurship and new
ventures, which of these would you tell him is true?
A. Anyone can start a business
B. All entrepreneurs need venture capital in order to get started
C. Successful entrepreneurs take very careful, calculated risks
D. Entrepreneurs are their own bosses and completely independent
E. Money should not be considered a start-up ingredient
32) The term used to refer to all kinds of differences including religious
affiliation, age, disability status, economic class and lifestyle in addition
to gender, race, ethnicity and nationality is:
A. Diversity
B. Managerial ethics
C. Recruiting
D. Employment
E. Selection
33) A manager's ability to stimulate people to be high performers is
referred to as:
A. Planning
B. Supervising
C. Controlling
D. Organizing
E. Leading
34) A series of quality standards developed by a committee working
under the International Organization for Standardization to improve
total quality in all businesses for the benefit of both producers and
consumers is:
A. Total quality management
B. Customer-based integration
C. Computer-integrated manufacturing (CIM)
D. Just-in-time control (JIT)
E. ISO 9000
35) Japanese manufacturers' kaizen (continuous improvement) programs
enable them to maintain:
A. A strategic alliance

B. A homogeneous workforce
C. Positive working relationships with all employees
D. A Learning advantage over their competition
E. Larger, faster facilities
36) Listening to employee suggestions, gaining support for
organizational objectives and fostering an atmosphere of teamwork are
all considered:
A. Technical skills
B. Conceptual
C. Professional skills
D. Interpersonal/communication skills
E. Diagnostic skills
37) The basic components of an effective sexual harassment policy
include the following EXCEPT:
A. To develop an organization wide policy on sexual harassment
B. To establish a means for ongoing training
C. To act immediately when employees complain of sexual harassment
D. To establish a performance appraisal system
E. To establish a formal complaint procedure
38) Teams that operate separately from the regular work structure and
exist temporarily are known as:
A. Management teams
B. Transnational teams
C. Self-managed teams
D. Parallel teams
E. Self-designing teams
39) The Aquatic Center, Inc. periodically reviews the goals of the
company. During the process, The Aquatic Center managers analyze
their current strategies as compared to their competitors, determine
goals that they will pursue and decide upon specific actions for each
area of the company to take in pursuit of these goals. The Aquatic
Center managers have been engaged in the management function of:
A. Goal Coordination
B. Controlling
C. Organizing
D. Staffing
E. Planning
40) As related to managing of human resources, diversity refers to:
A. Differences in demographics (such as age, race, gender, disability
status, lifestyle, veteran status, educational level, etc.)
B. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay,
commissioned, etc.)
C. Differences in employee benefit plans (such as pensions, insurance, vacations,
memberships, etc.)
D. Differences in retention strategies (such as training, hiring, incentives, etc)

E. Differences in recruiting methods (such as newspapers, schools, flyers,


magazines, agencies, etc.)
41) __________ is the process of working with people and resources to
accomplish organizational goals.
A. Controlling
B. Decision making
C. Planning
D. Supervising
E. Management
42) Twelve randomly-chosen students were asked how many times they
had missed class during a certain semester, with this result: 2, 1, 5, 1, 1,
3, 4, 3, 1, 1, 5, 18.
For this sample, the median is _____.
A. 3
B. 3.5
C. 2.5
D. 2
43) Use the following table to answer question:
P(S | W) is approximately _____.
A. .40
B. .30
C. .12
D. .58
44) Use the following table to answer question:
P(M A) is approximately _____.
A. .50
B. .625
C. .125
D. .25
45) Dullco Manufacturing claims that its alkaline batteries last forty
hours on average in a certain type of portable CD player. Tests on a
random sample of 18 batteries showed a mean battery life of 37.8 hours
with a standard deviation of 5.4 hours.
In determining the p-value for reporting the study's findings, which of
the following is true?
A. The p-value is equal to .05.
B. The p-value is greater than .05.
C. The p-value cannot be determined without specifying .
D. The p-value is less than .05.
46) William used a sample of 68 U.S. cities to estimate the relationship
between Crime (annual property crimes per 100,000 persons) and
Income (median income per capita). His estimated regression equation
was Crime = 428 + .050 Income.

Which outcomes would be likely in a bivariate regression on 45 randomly


chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A. High R2 (due to city size).
B. Positive slope (due to city size).
C. No correlation.
D. Autocorrelation.
47) Twelve randomly-chosen students were asked how many times they
had missed class during a certain semester, with this result: 2, 1, 5, 1, 1,
3, 4, 3, 1, 1, 5, 18.
For this sample, which measure of central tendency is least
representative of the typical student?
A. Midrange
B. Mean
C. Mode
D. Median
48) Likely reasons for inaccurate control limits would include which of
the following?
A. Process variation was not zero, as expected.
B. The engineering parameter for variance is unknown.
C. There was insufficient preliminary sampling.
D. The engineers were underpaid for their work.
49) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the
shadow price for Constraint B is 0. Which of these statements is TRUE?
A. The most you would want to pay for an additional unit of A would be $7.50.
B. You can change quantities of X and Y at no cost for Constraint B.
C. For every additional unit of the objective function you create, the price of A
rises by $7.50.
D. For every additional unit of the objective function you create, you lose 0 units
of B.
50) A project has three paths. ABC has a length of 25 days. ADC has a
length of 15 days. Finally, AEC has a length of 20 days. Which one of
the following statements is TRUE?
A. The expected duration of this project is 25 + 15 + 20 = 60 days.
B. ADC is the critical path.
C. The expected duration of this project is 25 days.
D. ABC has the most slack.

51) Which one of the following statements concerning production and


staffing plans is best?
A. A master production schedule is a projected statement of income, costs, and
profits.
B. Aggregation can be performed along three dimensions: product
families, labor, and time.
C. Production plans are based primarily on information from the master
production plan.
D. A staffing plan is the intermediate link between the business plan and the
master production schedule.
52) While glancing over the sensitivity report, you note that the
stitching labor has a shadow price of $10 and a lower limit of 24 hours
with an upper limit of 36 hours. If your original right hand value for
stitching labor was 30 hours, you know that:
A. you would lose $80 if one of your workers missed an entire 8 hour shift.
B. the next worker that offers to work an extra 8 hours should receive at least
$80.
C. you would be willing pay up to $60 for someone to work another 6
hours.
D. you can send someone home 6 hours early and still pay them the $60 they
would have earned while on the clock.
53) The costs of delivering products in the _____ channel are much higher
than delivering products in the _____ channel.
A. physical, digital
B. e-commerce, digital
C. physical, financial
D. digital, e-commerce
E. digital, physical
54) When customers access a Web site and make purchases, they
generate __________.
A. Tracking cookies
B. Web data
C. Information
D. Clickstream data
E. Hyperlink data
55) _____ is the integration of economic, social, cultural, and ecological
facets of life, enabled by information.
A. regionalization
B. globalization
C. nationalization
D. business environment
56) Various organizations that promote fair and responsible use of
information systems often develop __________.
A. a code of ethics
B. responsibility charters

C. a strategic plan
D. a mission statement
E. a goals outline
57) What is _____ is not necessarily _____.
A. Illegal, unethical
B. Unethical, legal
C. Ethical, illegal
D. Unethical, illegal
E. Ethical, legal
58) _____ provides users with a view of what is happening, where _____
addresses why it is happening.
A. Multidimensional data analysis, structured query language
B. Multidimensional data analysis, neural networks
C. Data mining, multidimensional data analysis
D. Data mining, expert system
E. Multidimensional data analysis, data mining
59) Computer support is greatest for which of the following problems?
A. Semistructured and strategic planning
B. Semistructured and management control
C. Unstructured and operational control
D. Structured and operational control
E. Structured and management control
60) The management cockpit best exemplifies which type of system?
A. Decision support system
B. Functional area information system
C. Expert system
D. Digital dashboard
E. Group decision support system
61) _____ is the efficient and effective execution of specific tasks.
A. Operational control
B. Expertise
C. Management control
D. Strategic planning
E. Wisdom
62) Geocoding is __________.
A. accessing geographical information
B. integrating maps with spatially oriented databases and other
databases
C. integrating organizational transactions with spatially oriented databases
D. programming spatially oriented databases
E. encrypting spatial information
63) At 8% compounded annually, how long will it take $750 to double?
A. 48 months

B. 6.5 years
C. 9 years
D. 12 years
64) Which of the following represents an attempt to measure the
earnings of the firms operations over a given time period?
A. Cash flow statement
B. Balance sheet
C. Income statement
D. Quarterly statement
65) A machine costs $1,000, has a three-year life, and has an estimated
salvage value of $100. It will generate after-tax annual cash flows (ACF)
of $600 a year, starting next year. If your required rate of return for the
project is 10%, what is the NPV of this investment? (Round your
answerwer to the nearest $10.)
A. $570
B. $490
C. $900
D. -$150
66) Disadvantages of using current liabilities as opposed to long-term
debt include:
A. higher cash flow exposure
B. greater risk of illiquidity, and uncertainty of interest costs
C. decreased risk of liquidity
D. certainty of interest costs
E. uncertainty of future liabilities
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of
$1.70 per share. If the stock is currently selling for $21.25 per share,
what is the expected rate of return on this stock?
A. 12.5%
B. 36.13%
C. 8.0%
D. 13.6%
68) Which of the following is most consistent with the hedging principle
in working capital management?
A. Fixed assets should be financed with short-term notes payable.
B. Inventory should be financed with preferred stock.
C. Accounts receivable should be financed with short-term lines of
credit.
D. Borrow on a floating rate basis to finance investments in permanent assets.
69) An increase in future value can be caused by an increase in the
__________.
A. original amount invested
B. annual interest rate and number of compounding periods
C. rate of return

D. dividends paid
E. starting value
70) If the quote for a forward exchange contract is greater than the
computed price, the forward contract is:
A. at equilibrium.
B. undervalued.
C. a good buy.
D. overvalued.
71) Your company is considering an investment in a project which would
require an initial outlay of $300,000 and produce expected cash flows in
Years 1 through 5 of $87,385 per year. You have determined that the
current after-tax cost of the firms capital (required rate of return) for
each source of financing is as follows:
Cost of debt
8%
Cost of preferred stock
12%
Cost of common stock
16%
Long-term debt currently makes up 20% of the capital structure,
preferred stock 10%, and common stock 70%. What is the net present
value of this project?
A. $1,568
B. $871
C. $1,241
D. $463
72) Suppose you determine that the NPV of a project is $1,525,855.
What does that mean?
A. The projects IRR would have to be less that the firms discount rate.
B. The project would add value to the firm.
C. Under all conditions, the projects payback would be less than the profitability
index.
D. In all cases, investing in this project would be better than investing in a
project that has an NPV of $850,000.
73) The common stockholders are most concerned with:
A. the spread between the return generated on new investments and the
investors required rate of return.
B. the size of the firms beginning earnings per share.
C. the risk of the investment.
D. the percentage of profits retained.
74) PepsiCo calculates unlevered betas for each peer group in order to:
A. eliminate different financial risks.
B. eliminate competitive factors.
C. eliminate judgment factors.
D. eliminate different business risks.
75) Which of the following best represents operating income?
A. Income from discontinued operations

B. Earnings before interest and taxes


C. Income from capital gains
D. Income after financing activities
76) In comparison to the buying of final consumers, the purchasing of
organizational buyers:
A. is even less predictable.
B. leans basically toward economy, quality, and dependability.
C. is always emotional.
D. is strictly economic and not at all emotional.
E. is always based on competitive bids from multiple suppliers.
77) The basic objective of the U.S. market-directed economic system is
to:
A. achieve an annual growth rate of at least 10 percent.
B. provide each person with an equal share of the economic output.
C. make the most efficient use of the country's resources.
D. minimize inflation.
E. satisfy consumer needs as they--the consumers--see them.
78) Comparing GDP for foreign countries can help a marketing manager
evaluate potential markets if the manager remembers that:
A. GDP measures show people's tendency to buy particular products.
B. income tends to be evenly distributed among consumers in most countries.
C. GDP estimates may not be very accurate for very different cultures and
economies.
D. Other countries most likely dont use the US Dollar as their primary currency.
E. GDP measures show the degree of competition in a market.
79) A firm's "marketing mix" decision areas would NOT include:
A. Promotion.
B. People.
C. Price.
D. Place.
E. Product.
80) __________ is a marketing management aid which refers to how
customers think about proposed and/or present brands in a market.
A. Brand familiarity
B. Positioning
C. Market scanning
D. Customer relationship management (CRM)
E. Market segmentation
81) The "four Ps" of a marketing mix are:
A. Production, Personnel, Price, and Physical Distribution
B. Promotion, Production, Price, and People
C. Potential customers, Product, Price, and Personal Selling
D. Product, Price, Promotion, and Profit
E. Product, Place, Promotion, and Price

82) When evaluating macro-marketing:


A. the evaluation is necessarily subjective.
B. the best approach is to consider the profit generated by individual firms within
the overall system.
C. one must determine how efficiently the society's resources are used.
D. one must consider the societys role in the marketing system.
E. one must consider each individual firm's role in the marketing system.
83) A cluster analysis of the "toothpaste market" would probably show
that:
A. the broad product-market can be served effectively with one marketing mix.
B. most consumers are mainly concerned about brightness of teeth.
C. factors such as taste, price, and "sex appeal" are not important.
D. most consumers are concerned about cost.
E. different market segments seek different product benefits.
84) Clustering techniques applied to segmenting markets __________.
A. usually require computers to group people based on data from
market research
B. remove the need for managerial judgment
C. eliminate the need for marketing managers to specify in advance what
dimensions might be relevant for grouping consumers
D. doesnt apply to demographic data
E. is time consuming and expensive
85) The three basic tasks of ALL managers, according to the text, are:
A. planning, staffing, and evaluating.
B. marketing, production, and finance.
C. execution, feedback, and control.
D. planning, implementation, and control.
E. hiring, training, and compensating.
86) The difference between target marketing and mass marketing is that
target marketing:
A. means focusing on a small market.
B. focuses on short-run objectives, while mass marketing focuses on long-run
objectives.
C. focuses on specific customers, while mass marketing aims at an
entire market.
D. aims at increased sales, while mass marketing focuses on increased profits.
E. does not rely on e-commerce but mass marketing does.
87) When one considers the strategy decisions organized by the four Ps,
branding is related to packaging as:
A. store location is to sales force selection.
B. personal selling is to mass selling.
C. production is to marketing.
D. branding is to pricing.
E. pricing is to promotion.

88) Which of the following statements is not true under the Fair Labor
Standards Act?
A. Children ages 16 and 17 may work unlimited hours in nonhazardous jobs.
B. Persons age 18 or over may work unlimited hours in nonhazardous jobs.
C. Children ages 14 and 15 may work limited hours in nonhazardous jobs.
D. Children under 14 cannot work at all, except on farms.
E. Persons age 18 or over may work unlimited hours in hazardous jobs.
89) Probable cause is most directly associated with which step of the
criminal process?
A. Plea bargaining
B. Arraignment
C. Indictment
D. Arrest
E. Jury deliberations
90) Which of the following statements is generally not true about state
intermediate appellate courts?
A. The appellate court allows the parties to make oral arguments outlining their
position.
B. The appellate court allows the parties to introduce new evidence so
long as it was not previously introduced at the original trial.
C. The appellate court usually allows the parties to file briefs outlining support
for their positions.
D. The appellate court reviews the record of the trial court.
E. Appellate court decisions are final and further appeal is not possible.
91) Which of the following terms need not be disclosed under Truth-inLending Act?
A. The terms available from competitors.
B. The total finance charge.
C. The cash price of the product.
D. The annual percentage rate (APR).
E. Amount of payments.
92) Which of the following activities by an administrative agency
requires public notice and participation?
A. Substantive rule making and statements of policy only.
B. Statements of policy only.
C. Substantive rule making and interpretive rule making only.
D. Substantive rule making only.
E. Substantive rule making, interpretive rule making, and statements of policy.
93) Which of the following is not one of the Caux Round Table Principles
for International Business?
A. Promotion of Multiculturalism.
B. Respect for the Environment.
C. Support for Multilateral Trade.
D. Avoidance of Illicit Operations.

E. Responsibility of Business Beyond Shareholders Toward Stakeholders.


94) The theory of business social responsibility that holds that a
business owes duties solely to produce the highest return for its
shareholders is:
A. The corporate citizenship theory.
B. The moral minimum theory.
C. The social audit theory.
D. The stakeholder interest theory.
E. The maximizing profits theory.
95) Which social responsibility theory has been advocated by Novel
Prizewinning economist Milton Friedman?
A. Corporate citizenship.
B. Maximizing profits.
C. Corporate social audit.
D. Stakeholder interest.
E. Moral minimum.
96) Which of the following lists, in descending priority, of sources
considered by most courts in settling questions of international law?
A. Conventions, treaties, comity, customs
B. Treaties, customs, conventions, comity
C. Treaties, customs, conventions, comity
D. Conventions, comity, customs, general principles of law
E. Treaties, customs, general principles of law, judicial decisions and
teachings
97) If the value of the collateral is less than the debt owed to the
secured party, then:
A. The secured party gets to take some other property as collateral so his entire
debt is secured.
B. The secured party is still secured for the entire debt owed him.
C. The secured party is unsecured for the entire debt.
D. The secured party loses the excess of debt over the value of the security.
E. The secured party is unsecured for the excess of debt over the value
of the security.
98) One study found that manufacturing labor costs about _____ an hour
in China, compared to _____ dollars in the United States.
A. $2; about 25
B. Less than $1; about 15
C. Less than $1; about 40
D. Less than $1; about 25
E. About $2; about 15
99) Which country does the text describe as becoming the largest
producer and consumer of many of the world's goods?
A. China
B. Japan

C. Ecuador
D. Mexico
E. Canada
100) The cost principle requires that when assets are acquired, they be
recorded at __________.
A. list price
B. selling price
C. exchange price paid
D. appraisal value