BUS 475 Capstone Final Examination Part 2
1. Which of the following is the most important factor that affects a firm's financing mix?
a) The predictability of cash flows
b) the number of shares that are outstanding
c) The amount of EPS
d) the amount of operating income
2. When an accountant makes an adjusting entry for accrued expenses, which statement best
reflects what the accounts look like before the adjustment?
a) Assets overstated; expenses understated
b) Assets understated; revenues understated
c) Expenses understated; liabilities understated
d) Liabilities overstated; revenues understated
3. Which account will have a zero balance after a company has journalized and posted
closing entries?
a) Accumulated Depreciation
b) Prepaid Insurance
c) Service Revenue
d) Supplies
4. A __________ is an articulation of a simple criterion or characterization of what the leader
sees the company must become to establish and sustain global leadership.
a) Mission
b) leader's principle
c) leader's vision
d) strategic intent
5. The market opportunities most relevant to a particular company are those that
a) Offer the best growth and profitability.
b) Provide avenues for taking market share away from close rivals.
c) Hold the most potential for product innovation.
d) Provide a strong defense against threats to the company's profitability..
6. Internal control is used in a business to enhance the accuracy and reliability of its
accounting records and to
a) Analyze financial statements.
b) Create a system of audit review.
c) Safeguard its assets.
d) Protect investments by the public.
7. What principle dictates that efforts (expenses) be recorded with results (revenues)?
a) Periodicity principle
b) Expense recognition principle
c) Cost principle
d) Revenue recognition principle
8. The Oviedo Thespians are planning to present performances of their Florida Revue on two
consecutive nights in January. It will cost them $5,000 per night for theater rental, event
insurance, and professional musicians. The theater will also take 10% of gross ticket sales.

How many tickets must they sell at $10.00 per ticket to break even?
a) 1,223 tickets
b) 1,112 tickets
c) 1000 tickets
d) There is not enough information.
9. Which of the four basic financial statements adds net income and subtracts dividends to
arrive at its key data element at the end of each period?
a) Balance Statement
b) Retained Earnings Statement
c) Income Statement
d) Statement of Cash Flows
10. H&R Block wants to analyze its clients’ tax returns over the past 10 years for each of the
client’s tax filings. The type of data generated will be ______________.
a) time series data
b) observation data
c) meta data
d) cross-sectional data
11. A distribution center for a chain of electronics supply stores fills and ships orders to retail
outlets. A random sample of orders is selected as they are received and the dollar amount of
the order (in thousands of dollars) is recorded, and then the time (in hours) required to fill the
order and have it ready for shipping is determined. A scatterplot showing the times as the
response variable and the dollar amounts (in thousands of dollars) as the predictor shows a
linear trend. The least squares regression line is determined to be: yˆ= 0.76 +1.8x. A plot of
the residuals versus the dollar amounts showed no pattern, and the following values were
reported: Correlation r + 0.90; R 2 = 0.81; standard deviation of the residuals is 0.48. What
percentage of the variation in the times required to prepare an order for shipping is accounted
for by the fitted line?
a) 48%
b) 81%
c) 90%
d) 76%
12. National Printing Equipment (NPE) produces equipment that helps to print newspapers
and magazines. The company sells directly to printers and through wholesalers. Its
salespeople negotiate prices with individual customers and often have to match competitors'
prices. NPE has a new product, the Gutenberg NP201, with some competitive advantages
now, but competitors are expected to follow quickly with similar products. The new product
is being introduced into a market with elastic demand. In regard to freight charges for its
equipment, NPE's invoice reads, "Seller pays the cost of loading equipment onto a common
carrier. At the point of loading, title to such products passes to the buyer, who assumes
responsibility for damage in transit, except as covered by the transportation agency."
National Printing Equipment's new Gutenberg NP201 should probably use
________________.
a) introductory pricing
b) price fixing

c) penetration pricing
d) skimming pricing
13. __________ is the intentional coordination of every communication from a firm to a
target customer to convey a consistent and complete message.
a) Integrated marketing communications
b) Online marketing
c) Product positioning
d) Digital marketing
14. Identifying and assessing a company's resource strengths and weaknesses and its external
opportunities and threats is called a __________________.
a) strategic resource assessment
b) competitive asset/liability analysis
c) SWOT analysis
d) competitive positioning analysis
15. Suppose Stock A has had a mean price of $6.58 per share with a standard deviation of
$1.88, while Stock B has had a mean price of $10.57 per share with a standard deviation of
$3.02. Which stock shows a higher coefficient of variation or volatility?
a) Stock B
b) Stock A
c) Both stocks have the same coefficient of variation.
d) The coefficients are incomparable.
16. Which of the following will decrease the nominal deficit?
a) An increase in the debt
b) An increase in interest rates
c) An increase in government expenditures
d) An increase in taxes
17. When predicting grade point average from the number of hours spent studying per week,
the equation for the best fit line was found to be yˆ = 0.0855x + 0.944. What is the predicted
grade point average of a student that studies 26 hours per week?
a) 25
b) 2.99
c) 3.17
d) 24.63
18. The main reason that vertical marketing systems are becoming more common is that
a) Firms increasingly understand that competition among channel members is profitable.
b) It is easy for multiple firms to coordinate a single marketing mix for a common target
market.
c) Firms realize that working independently has advantages for channel members.
d) Firms recognize that coordination among channel members can increase sales for each
channel member.
19. The appropriate alternative hypothesis for a two-tail test to determine if mean body
weight of all the men who have joined a health club is the same as 185 pounds would be
a) Ho: μ = 185 lbs.
b) Ho: μ? 185 lbs.

BUS 475 Capstone Final Examination Part 2

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