1.A medium-sized consumer products company is not reaching its sales goals. The leadership team cant understand why theyre not reaching their sales goals after having put in place an impressive incentive structure. One member of the team has suggested that perhaps the issues with the sales people are related to more intrinsic issues and have nothing to do with compensation. Which organizational theory could help the team diagnose their issues?

2.Gross profit is equal to

a. profits plus depreciation.

b. revenues - expenses.

c. earnings before taxes minus taxes payable.

d. sales - cost of goods sold.

3.Which of the following represents an attempt to measure the net results of the firm's operations (revenues versus expenses) over a given time period?

a. Balance Sheet

b. Statement of Cash Flows

c. Income Statement

d. Sources and Uses of Funds Statement

4.Company A and Company B both report the same level of sales and net income. Therefore,

a. both A and B will report the same Earnings Per Share.

b. both A and B will report the same Gross Profit Margin.

c. both A and B will report the same Net Profit Margin.

d. both A and C are true.

5.What information does a firm's income statement provide to the viewing public?

a. an itemization of all of a firm's assets and liabilities for a defined period of time

b. a complete listing of all of a firm's cash receipts and cash expenditures for a defined period of time

c. a report of revenues and expenses for a defined period of time

d. a report of investments made and their cost for a specific period of time

6.Li Retailing reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000. Li's operating income is equal to

a. $770,000.

b. $1,070,000.

c. $1,100,000.

d. $1,500,000.