MGT 465 WEEK 5 final examination



1. Return on sales is also known as:

a. ☐Return on investment

b. ☐Profit margin

c. ☐Cost of goods sold

d. ☐None of the above



2. One way for a business to raise the capital it needs to grow it finance with:

a. ☐Earnings

b. ☐Debt

c. ☐Equity

d. ☐All of the above



3. An example of a company where revenue is primarily from the production of a tangible product is:

a. ☐Ford Motor Company

b. ☐Ernst & Young

c. ☐Massage Envy

d. ☐Netflix



4. One disadvantage of corporations is that their profits are subject to double-taxation, taxed once on the corporate level and again when investors receive their share of profits.

a. ☐True

b. ☐False



5. Examples of variable costs include:

a. ☐Commissions

b. ☐Shipping

c. ☐Cost for materials

d. ☐All of the above



6. Payment of a percentage of the revenue generated by the sale of each unit is known as:

a. ☐Royalty

b. ☐Franchise

c. ☐Diversification

d. ☐Line extension



7. Which kind of company acts as a middleman, buying goods from a manufacturer and selling them on to a retailer?

a. ☐Retail

b. ☐Wholesale

c. ☐Manufacturing

d. ☐Service



8. A cash flow statement provides the same information as an income statement.

a. ☐True

b. ☐False



9. A company codifies its reason for existence in the form of a:

a. ☐Performance objective

b. ☐Mission statement

c. ☐Profit statement

d. ☐None of the above



10. What is the final step in the employee recruitment process?

a. ☐Salary negotiation

b. ☐Hiring

c. ☐Orientation

d. ☐None of the above



11. In 2013, Ken invested $20,000 in his company. In the same year, his net profits were $3,500. What was his annual ROI in 2013?

a. ☐17.5%

b. ☐5.7%

c. ☐1.75%

d. ☐57.1%



12. A free enterprise system is also known as:

a. ☐Economics

b. ☐Market system

c. ☐Production economy

d. ☐Free-trade system



13. The opposite of the skimming strategy of pricing is the:

a. ☐Penetration strategy

b. ☐Skimming strategy

c. ☐Meet-or-beat the competition

d. ☐Cost-plus

14. A reward for becoming an entrepreneur is:

a. ☐Control over time

b. ☐Control over compensation

c. ☐Control over working conditions

d. ☐All of the above



15. Lee has $255,000 in current assets and $175,000 in current liabilities. How much working capital does she have?

a. ☐$85,000

b. ☐$430,000

c. ☐$80,000

d. ☐None of the above



16. How often should you rebalance your investment portfolio?

a. ☐Monthly

b. ☐Bi-annually

c. ☐Annually

d. ☐Every three years



17. Net worth is also known as owner’s equity.

a. ☐True

b. ☐False



18. Franchising and licensing are examples of what kind of strategies?

a. ☐Harvest

b. ☐Diversification

c. ☐Replication

d. ☐None of the above



19. Which of the following telephone behaviors is NOT a hallmark of a successful salesperson?

a. ☐Waiting to offer solution or products until later in the call.

b. ☐Letting the customer talk less than you do.

c. ☐Asking the right questions.

d. ☐None of the above.



20. Using orders as a unit of sale is most commonly associated with which kind of business?

a. ☐Retail

b. ☐Wholesale

c. ☐Manufacturing

d. ☐Service



21. The giving of resources to charities in an effort to help solve a social or environmental problem is known as:

a. ☐Philosophy

b. ☐Mission

c. ☐Philanthropy

d. ☐Vision Statement



22. If furniture store buys a sofa from the wholesaler for $600 and sells it for $2,500, what is the retailer’s gross profit per unit?

a. ☐$3,100

b. ☐25%

c. ☐$1,900

d. ☐4.16



23. Four out of five small firms fail in the first five years of operation.

a. ☐True

b. ☐False



24. According to the principle of compounding interest, if you invest $1.00 at 10 percent over five years, how much will you have at the end of those five years?

a. ☐$1.50

b. ☐$1.61

c. ☐$1.51

d. ☐$1.10



25. Which one of the following is NOT one of the five roots of opportunity?

a. ☐Problems

b. ☐Inventions

c. ☐Competition

d. ☐None of the above
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MGT 465 WEEK 5 final examination

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