Question 1

________ is the amount that is left over after deducting all other business expenses but before deducting interest and taxes.

Accepted Answer

A) Sales revenue 
B) Operating income 
C) Net marketing contribution 
D) Marketing expenses 
E) Gross profit 
A) Sales revenue 
B) Operating income 
C) Net marketing contribution 
D) Marketing expenses 
E) Gross profit B

Question 2

Service quality affects customer retention and profit in the numerator and ________ in the denominator of the return on assets equation.

Accepted Answer

A) total income generated 
B) return on sales 
C) customer satisfaction 
D) accounts receivable 
E) accounts payable 
A) total income generated 
B) return on sales 
C) customer satisfaction 
D) accounts receivable 
E) accounts payable D

Question 3

A company's return on capital is ________.

Accepted Answer

A) invested capital divided by net marketing contribution 
B) net profit multiplied by invested capital 
C) net profit divided by invested capital 
D) net marketing contribution divided by invested capital 
E) invested capital divided by net profit 
A) invested capital divided by net marketing contribution 
B) net profit multiplied by invested capital 
C) net profit divided by invested capital 
D) net marketing contribution divided by invested capital 
E) invested capital divided by net profit C

Question 4

________ represents the net marketing contribution as a percentage of sales.

Accepted Answer

A) Return on equity 
B) Marketing ROS 
C) Gross profit 
D) Marketing ROI 
E) Market demand 
A) Return on equity 
B) Marketing ROS 
C) Gross profit 
D) Marketing ROI 
E) Market demand

Question 5

MINI-CASE
Zitko Inc.is a manufacturer of consumer goods products.It has 75 million shares in the market and generates a net profit of $125 million.Its stock price is $60 and it has a capital cost of 10% for $850 million of capital invested.Its other expenses,including interest and taxes,amount to $240 million.
-Mini-Case Question.Calculate the earnings per share of Zitko Inc.

Accepted Answer

A) $2.5 per share 
B) $1.7 per share 
C) $3.8 per share 
D) $4.5 per share 
E) $6 per share 
A) $2.5 per share 
B) $1.7 per share 
C) $3.8 per share 
D) $4.5 per share 
E) $6 per share

Question 6

Calculate the economic profit generated by a business with a capital cost of 10% for $2 billion of capital invested.Its net marketing contribution is $450 million and its other expenses,including interests and taxes,amount to $200 million.

Accepted Answer

A) $250 million 
B) $200 million 
C) $50 million 
D) $100 million 
E) $150 million 
A) $250 million 
B) $200 million 
C) $50 million 
D) $100 million 
E) $150 million

Question 7

The financial metric of return on equity has owner's equity as its basis.

Accepted Answer

A) True 
 B)False

Question 8

Calculate the return on sales for Matt-Brine Inc. ,which has a net marketing contribution of $450 million and total sales of $800 million.The other expenses,including interest and taxes,amount to $250 million.

Accepted Answer

A) 25% 
B) 20% 
C) 30% 
D) 10% 
E) 45% 
A) 25% 
B) 20% 
C) 30% 
D) 10% 
E) 45%

Question 9

Companies cannot enjoy high levels of customer retention without having high levels of customer satisfaction.

Accepted Answer

A) True 
 B)False

Question 10

________ is the ratio of net marketing contribution to a company's investment in marketing and sales expenses.

Accepted Answer

A) Gross profit 
B) Marketing ROI 
C) Return on equity 
D) Marketing ROS 
E) Market demand 
A) Gross profit 
B) Marketing ROI 
C) Return on equity 
D) Marketing ROS 
E) Market demand

Question 11

Milton-Normand Inc.obtains a return of 13.5% from total invested capital of $790.6 million.Calculate the net profit it generates.

Accepted Answer

A) $325.3 million 
B) $159 million 
C) $84.7 million 
D) $233.5 million 
E) $106.7 million 
A) $325.3 million 
B) $159 million 
C) $84.7 million 
D) $233.5 million 
E) $106.7 million

Question 12

Calculate the return on capital of a business whose net marketing contribution is $300 million and total invested capital is $900 million.The other expenses,including interest and taxes,amount to $120 million.

Accepted Answer

A) 40% 
B) 15% 
C) 5% 
D) 30% 
E) 20% 
A) 40% 
B) 15% 
C) 5% 
D) 30% 
E) 20%

Question 13

Economic profit is calculated from the ratio of net profit to the number of shares.

Accepted Answer

A) True 
 B)False

Question 14

The economic profit generated by a company is its ________.

Accepted Answer

A) (capital x cost of capital)/ net profit 
B) net profit / (capital x cost of capital) 
C) net profit + (capital x cost of capital) 
D) net profit - (capital x cost of capital) 
E) (capital x cost of capital)- net profit 
A) (capital x cost of capital)/ net profit 
B) net profit / (capital x cost of capital) 
C) net profit + (capital x cost of capital) 
D) net profit - (capital x cost of capital) 
E) (capital x cost of capital)- net profit

Question 15

Service quality affects customer retention and profit in the numerator and accounts receivable in the denominator of the return on assets equation.

Accepted Answer

A) True 
 B)False

Question 16

The net and economic profits generated by Hoddle Inc.are $320 million and $16 million,respectively,at 8% cost of capital.Calculate the total capital invested.

Accepted Answer

A) $3.8 billion 
B) $5.6 billion 
C) $1.25 billion 
D) $8.8 billion 
E) $840 million 
A) $3.8 billion 
B) $5.6 billion 
C) $1.25 billion 
D) $8.8 billion 
E) $840 million

Question 17

Calculate a business's return on sales when it makes a net profit of $500,000 from sales of $3 million.

Accepted Answer

A) 60% 
B) 16.7% 
C) 30.5% 
D) 50.5% 
E) 24.8% 
A) 60% 
B) 16.7% 
C) 30.5% 
D) 50.5% 
E) 24.8%

Question 18

A company's return on equity is equal to ________.

Accepted Answer

A) net profit divided by retention equity 
B) net profit divided by value equity 
C) net profit divided by customer's equity 
D) net profit divided by owner's equity 
E) net profit divided by company's liability 
A) net profit divided by retention equity 
B) net profit divided by value equity 
C) net profit divided by customer's equity 
D) net profit divided by owner's equity 
E) net profit divided by company's liability

Question 19

The higher the price-earnings ratio,the greater the risk to investment.

Accepted Answer

A) True 
 B)False

Question 20

Kindest Inc.generates a net profit of $345.1 million from 17 million shares.Calculate the earnings per share of the company.

Accepted Answer

A) $20,300 per share 
B) $2,030 per share 
C) $203 per share 
D) $2.3 per share 
E) $20.3 per share 
A) $20,300 per share 
B) $2,030 per share 
C) $203 per share 
D) $2.3 per share 
E) $20.3 per share

________ is the amount that is left over after deducting all other business expenses but before deducting interest and taxes.

Service quality affects customer retention and profit in the numerator and ________ in the denominator of the return on assets equation.

A company's return on capital is ________.

________ represents the net marketing contribution as a percentage of sales.

Calculate the economic profit generated by a business with a capital cost of 10% for $2 billion of capital invested.Its net marketing contribution is $450 million and its other expenses,including interests and taxes,amount to $200 million.

The financial metric of return on equity has owner's equity as its basis.

Calculate the return on sales for Matt-Brine Inc. ,which has a net marketing contribution of $450 million and total sales of $800 million.The other expenses,including interest and taxes,amount to $250 million.

Companies cannot enjoy high levels of customer retention without having high levels of customer satisfaction.

________ is the ratio of net marketing contribution to a company's investment in marketing and sales expenses.

Milton-Normand Inc.obtains a return of 13.5% from total invested capital of $790.6 million.Calculate the net profit it generates.

Calculate the return on capital of a business whose net marketing contribution is $300 million and total invested capital is $900 million.The other expenses,including interest and taxes,amount to $120 million.

Economic profit is calculated from the ratio of net profit to the number of shares.

The economic profit generated by a company is its ________.

Service quality affects customer retention and profit in the numerator and accounts receivable in the denominator of the return on assets equation.

The net and economic profits generated by Hoddle Inc.are $320 million and $16 million,respectively,at 8% cost of capital.Calculate the total capital invested.

Calculate a business's return on sales when it makes a net profit of $500,000 from sales of $3 million.

A company's return on equity is equal to ________.

The higher the price-earnings ratio,the greater the risk to investment.

Kindest Inc.generates a net profit of $345.1 million from 17 million shares.Calculate the earnings per share of the company.

Customer Focus, customer Performance, and Profit Impact

Marketing Metrics and Marketing Profitability

Market Potential, market Demand, and Market Share

The Customer Experience and Value Creation

Market Segmentation and Segmentation Strategies

Competitive Position and Sources of Advantage

Product Positioning, branding, and Product Line Strategies

Value-Based Pricing and Pricing Strategies

Marketing Channels and Channel Mapping

Marketing Communications, social Media, and Customer Response

Portfolio Analysis and Strategic Market Planning

Offensive Strategies

Defensive Strategies

Building a Marketing Plan

Marketing Metrics,performance,and Strategy Implementation

Filters

Exam 16: Market-Based Management and Financial Performance

________ is the amount that is left over after deducting all other business expenses but before deducting interest and taxes.

Service quality affects customer retention and profit in the numerator and ________ in the denominator of the return on assets equation.

A company's return on capital is ________.

________ represents the net marketing contribution as a percentage of sales.

Calculate the economic profit generated by a business with a capital cost of 10% for $2 billion of capital invested.Its net marketing contribution is $450 million and its other expenses,including interests and taxes,amount to $200 million.

The financial metric of return on equity has owner's equity as its basis.

Calculate the return on sales for Matt-Brine Inc. ,which has a net marketing contribution of $450 million and total sales of $800 million.The other expenses,including interest and taxes,amount to $250 million.

Companies cannot enjoy high levels of customer retention without having high levels of customer satisfaction.

________ is the ratio of net marketing contribution to a company's investment in marketing and sales expenses.

Milton-Normand Inc.obtains a return of 13.5% from total invested capital of $790.6 million.Calculate the net profit it generates.

Calculate the return on capital of a business whose net marketing contribution is $300 million and total invested capital is $900 million.The other expenses,including interest and taxes,amount to $120 million.

Economic profit is calculated from the ratio of net profit to the number of shares.

The economic profit generated by a company is its ________.

Service quality affects customer retention and profit in the numerator and accounts receivable in the denominator of the return on assets equation.

The net and economic profits generated by Hoddle Inc.are $320 million and $16 million,respectively,at 8% cost of capital.Calculate the total capital invested.

Calculate a business's return on sales when it makes a net profit of $500,000 from sales of $3 million.

A company's return on equity is equal to ________.

The higher the price-earnings ratio,the greater the risk to investment.

Kindest Inc.generates a net profit of $345.1 million from 17 million shares.Calculate the earnings per share of the company.

Customer Focus, customer Performance, and Profit Impact

Marketing Metrics and Marketing Profitability

Market Potential, market Demand, and Market Share

The Customer Experience and Value Creation

Market Segmentation and Segmentation Strategies

Competitive Position and Sources of Advantage

Product Positioning, branding, and Product Line Strategies

Value-Based Pricing and Pricing Strategies

Marketing Channels and Channel Mapping

Marketing Communications, social Media, and Customer Response

Portfolio Analysis and Strategic Market Planning

Offensive Strategies

Defensive Strategies

Building a Marketing Plan

Marketing Metrics,performance,and Strategy Implementation

Filters