All else equal, an increase in customers' reservation prices will have what effect on the value generated by a business?

It will be unaffected

It will decrease

It will increase

Question 2

An increase in the value of resources in an alternate use will have what effect on the ability of a company to generate value using those resources?

it will be unaffected

It will decrease

It will increase

Question 3

Which sequence of planning communication is most appropriate?

Analyze the audience, organize the talk, prepare the presentation

Prepare the presentation, analyze the audience, make the presentation

Analyze the audience, determine the purpose, prepare the presentation

Question 4

Customers of Company Y become frustrated with Company Y's poor customer service and so switch to Company Z. Using the Supply and Demand model, what happens to price and sales of Company Y's product?

Price and sales decrease

Price decreases but sales increase

Price increases but sales decrease

IncorrectQuestion 5

Company X sees a disruption in its supply chain at the same time it sees a decrease in customer demand. What do we know for certain?

Price will increase

Price will decrease

Sales will decrease

Question 6

An increase in product price, all else equal, will have what effect on producer surplus?

Producer surplus will be unaffected

Producer surplus will decrease

Producer surplus will increase

Question 7

At what price is consumer surplus maximized, at least in the short run?

At price equal to marginal cost

At price equal to zero

At price equal to total cost

Question 8

For a business to remain viable, it must price high enough to cover...

Marginal (i.e. variable) costs

Fixed costs

Marginal (i.e. variable) and fixed costs

Question 9

All else equal, increased product elasticity will have what effect on product profitability?

Allow the firm to decrease price and so increase profit

Impair the ability to increase price and so decrease profitability

Allow the firm to increase price and so increase profit

Question 10

Increasing positive brand perception should have what effect on the elasticity of a product?

Elasticity will decrease decreasing price sensitivity

Elasticity will decrease increasing price sensitivity

Elasticity will increase increasing price sensitivity

Question 11

A hinderance to creative problem solving is...

mental rigidity

brainstorming

unstructured thinking

Question 12

A good value proposition identifies a market problem, offers a solution, and provides a basis for trust. What is the missing step?

articulates points of distinction from other solutions

describes the pricing schema

fully defines the promotion strategy

Question 13

Firm X increases inventory in anticipation of a supply chain disruption during the next reporting period. What effect does this have on assets in the current reporting period?

increases total assets if they use debt to pay for it

increases total assets if they use cash to pay for it

Decreases total assets if they use debt to pay for it

Question 14

3 / 3 pts

Assets are worth $50 million and owner's equity is $20 million. Debt is...

$30 million

$50 million

$70 million

Question 15

A decrease in depreciation expense will have what impact on net income in the current reporting period?

Net income decrease

Net income increases

Net income is unaffected

Question 16

0 / 3 pts

Firm X increases inventory in anticipation of a supply chain disruption during the next reporting period. What effect does this have on cash flow in current reporting period?

Decrease cash balances

Cash balances is unaffected

Increases cash balances

Question 17

Firm Y issues new debt in order to finance the acquisition of a new piece of equipment. What effect does this have on the cash flow in the current reporting period?

Overall cash balance is unaffected

Cash balances increase

Cash balances decrease

Question 18

Firm Z managed to increase sales revenue without a proportionate increase in operating cost. What is the impact on Return on Equity?

Return on Equity increases

Return on Equity decreases

Return on Equity is unaffected

Question 19

Adam borrows $10,000 against his home equity at 4% interest. He combines this with another $5,000 he has in cash in order to invest in an investment with expected return of 7%. His overall expected return on the investment is...

Greater than 7%

Between 4% and 7%

Less than 4%

Question 20

Which of the following will result from decreasing the amount of financial leverage?

Decrease in expected return and a decrease in risk

Increase in expected return and an increase in risk

Decrease in expected return but an increase in risk

Question 21

Firm A has increased its Debt-to-Asset ratio. All else equal, what should be the effect on the expected Return on Equity?

Expected Return on Equity will be unaffected

Expected Return on Equity will decrease

Expected Return on Equity will increase

Question 22

Firm B sold off unused assets and the proceeds to pay off some debt. All else equal, what is the effect on Total Asset Turnover.

Total Asset Turnover will increase

Total Asset Turnover will decrease

Total Asset Turnover is unaffected

Question 23

Firm C paid cash for new equipment. The equipment doesn't become operational during the current reporting period. What is the effect on Total Asset Turnover?

Total Asset Turnover will decrease

Total Asset Turnover is unaffected

Total Asset Turnover will increase

Question 24

An increase in Total Asset Turnover, all else equal, will have what effect on Return on Equity?

Return on Equity will increase

Return on Equity will be unaffected

Return on Equity will decrease

Question 25

According to the article on the ESG framework, one reason for the superior performance of socially conscious firms is...

Decrease in labor force size

Increased productivity

Increase in regulatory cost

Question 26

Price increases while sales decrease for Firm J. Provide the following information: 1) whether it was the demand line or supply line that shifted in the demand and supply diagram, 2) whether that line shifted left or right, and 3) and a story about Firm J that explains why that curve shifted the way it did.

Question 27

Company X has seen a sharp decline in Return on Equity. Briefly explain how ratio analysis (or DuPont analysis) can be used to investigate the source of this decline.

Question 28

Company X produces a product, GlueX3, that Company X sales for $5. An opportunity presents itself to reallocate its manufacturing facility and related resources to produce Epoxy10. It believes it can sell Epoxy10 for $8. Explain how this switch creates “value”. Be sure to include for whom.

Question 29

In normal circumstances the airline industry creates value, a portion of which the airlines capture for themselves. Explain what we mean by value capture and how increased competition in the industry might impact the ability of airlines to capture value.