Question 1

The fixed asset turnover of a company is 8.3.What do you infer from this?

Accepted Answer

A)  Every dollar spent on the company's fixed assets generates $8.30 of revenue. 
B)  8.3% of the company's revenue is invested in fixed assets. 
C)  The return on fixed assets will break even in 8.3 years. 
D)  The cost of capital invested on fixed assets is 8.3% of the total profit. 
A)  Every dollar spent on the company's fixed assets generates $8.30 of revenue. 
B)  8.3% of the company's revenue is invested in fixed assets. 
C)  The return on fixed assets will break even in 8.3 years. 
D)  The cost of capital invested on fixed assets is 8.3% of the total profit.

Question 2

A firm has 30 million shares outstanding, and each share is traded at $100.Also, each shareholder gets a dividend of $2000 annually.In this case, the market capitalization is _____.

Accepted Answer

A)  30,000 shares, that is, 30 million shares/$100 
B)  $200,000, that is, $2000 × $100 
C)  $3 billion, that is, 30 million shares × $100 
D)  20:1, that is, $2000/$100 
A)  30,000 shares, that is, 30 million shares/$100 
B)  $200,000, that is, $2000 × $100 
C)  $3 billion, that is, 30 million shares × $100 
D)  20:1, that is, $2000/$100

Question 3

In the freemium business model, the:

Accepted Answer

A)  initial product is sold at a premium price and the complementary goods are given free. 
B)  users are free to pay for the services in advance or after using the services. 
C)  users are not charged for the basic features of a product or service, but the user must pay for premium advanced features or add-ons. 
D)  users pay for access to a product or service whether they use it during the payment term or not. 
A)  initial product is sold at a premium price and the complementary goods are given free. 
B)  users are free to pay for the services in advance or after using the services. 
C)  users are not charged for the basic features of a product or service, but the user must pay for premium advanced features or add-ons. 
D)  users pay for access to a product or service whether they use it during the payment term or not.

Question 4

Blue Horizon Inc.is an Internet service provider.It provides a router free of charge when users sign up for a two-year wireless service plan.In this plan, users pay in advance irrespective of whether they use the Internet package during the two-year period or not.Which of the following business models does this scenario best illustrate?

Accepted Answer

A)  A combination of the razor-razor-blade model and the subscription-based business model 
B)  The pay-as-you-go business model 
C)  A combination of the freemium business model and the pay-as-you-go business model 
D)  The direct sales business model 
A)  A combination of the razor-razor-blade model and the subscription-based business model 
B)  The pay-as-you-go business model 
C)  A combination of the freemium business model and the pay-as-you-go business model 
D)  The direct sales business model

Question 5

Discuss the limitations associated with using accounting data to measure competitive performance.

Accepted Answer

Although accounting data tend to be read

Question 6

What do you mean by opportunity costs? What are the opportunity costs for entrepreneurs?

Accepted Answer

Opportunity costs capture the value of t

Question 7

How are the balanced scorecard and triple-bottom-line approaches different from the traditional approaches to measure competitive advantage?

Accepted Answer

Although the three traditional framework

Question 8

What do you mean by triple-bottom line?

Accepted Answer

Triple bottom line is a combination of e

Question 9

How does a firm capture its producer surplus for a good or service?

Accepted Answer

A)  As cost per unit sold 
B)  As profit per unit sold 
C)  As earnings per share 
D)  As market price per share 
A)  As cost per unit sold 
B)  As profit per unit sold 
C)  As earnings per share 
D)  As market price per share

Question 10

Pilot Games Inc.allows users to play the trial versions of its games without any charge.However, users have to purchase the games to access the upgraded version of the games with advanced features.Which of the following business models is Pilot Games using in this scenario?

Accepted Answer

A)  Freemium 
B)  Subscription-based 
C)  Pay-as-you-go 
D)  Razor-razor-blade 
A)  Freemium 
B)  Subscription-based 
C)  Pay-as-you-go 
D)  Razor-razor-blade

Question 11

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

Accepted Answer

A)  Land and building 
B)  Accounts payable 
C)  Patents 
D)  Customer experience 
A)  Land and building 
B)  Accounts payable 
C)  Patents 
D)  Customer experience

Question 12

Which of the following equations best expresses return on revenue?

Accepted Answer

A)  Net profits/Revenue 
B)  Revenue - Cost 
C)  Sales/Revenue 
D)  Revenue - Gross profits 
A)  Net profits/Revenue 
B)  Revenue - Cost 
C)  Sales/Revenue 
D)  Revenue - Gross profits

Question 13

_____, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Accepted Answer

A)  Total return to shareholders 
B)  Earnings per share 
C)  Receivables turnover 
D)  Dividend yield 
A)  Total return to shareholders 
B)  Earnings per share 
C)  Receivables turnover 
D)  Dividend yield

Question 14

Should a firm ideally have a higher or a lower ratio of payables turnover?

Accepted Answer

Payables turnover (Revenue/Accounts paya

Question 15

_____ are best described as the value of the best forgone alternative use of the resources employed.

Accepted Answer

A)  Variable costs 
B)  Opportunity costs 
C)  Social costs 
D)  Switching costs 
A)  Variable costs 
B)  Opportunity costs 
C)  Social costs 
D)  Switching costs

Question 16

A watch-making company has priced one of its wrist watches at $210.Most of its competitors sell similar watches at $180.Selling anything less than $150 would result in a loss for the company.However, the absolute maximum a customer is willing to pay for it is $170.In this scenario, what is the reservation price of the wrist watch?

Accepted Answer

A)  $150 
B)  $180 
C)  $170 
D)  $210 
A)  $150 
B)  $180 
C)  $170 
D)  $210

Question 17

Which of the following is an advantage of the balanced scorecard?

Accepted Answer

A)  It is a tool for both strategic formulation and strategic implementation. 
B)  It allows managers to translate a firm's vision into measureable operational goals. 
C)  The balanced scorecard is independent of the skills of the managers responsible for its implementation. 
D)  Its implementation is a one-time effort and does not require continuous tracking of metrics or updating of strategic objectives. 
A)  It is a tool for both strategic formulation and strategic implementation. 
B)  It allows managers to translate a firm's vision into measureable operational goals. 
C)  The balanced scorecard is independent of the skills of the managers responsible for its implementation. 
D)  Its implementation is a one-time effort and does not require continuous tracking of metrics or updating of strategic objectives.

Question 18

What is the relationship between producer surplus and consumer surplus?

Accepted Answer

The difference between the price charged

Question 19

Unlike the financial ratios based on accounting data, total return to shareholders is:

Accepted Answer

A)  backward-looking and historic in nature. 
B)  an external performance metric. 
C)  an absolute measure of competitive advantage. 
D)  unaffected by market volatility or macroeconomic factors. 
A)  backward-looking and historic in nature. 
B)  an external performance metric. 
C)  an absolute measure of competitive advantage. 
D)  unaffected by market volatility or macroeconomic factors.

Question 20

Which of the following ratios best expresses inventory turnover?

Accepted Answer

A)  Inventory/Working capital 
B)  Annul profits/Inventory 
C)  Inventory/Per unit cost of production 
D)  Cost of goods sold/Inventory 
A)  Inventory/Working capital 
B)  Annul profits/Inventory 
C)  Inventory/Per unit cost of production 
D)  Cost of goods sold/Inventory

The fixed asset turnover of a company is 8.3.What do you infer from this?

A firm has 30 million shares outstanding, and each share is traded at $100.Also, each shareholder gets a dividend of $2000 annually.In this case, the market capitalization is _____.

In the freemium business model, the:

Discuss the limitations associated with using accounting data to measure competitive performance.

What do you mean by opportunity costs? What are the opportunity costs for entrepreneurs?

How are the balanced scorecard and triple-bottom-line approaches different from the traditional approaches to measure competitive advantage?

What do you mean by triple-bottom line?

How does a firm capture its producer surplus for a good or service?

Pilot Games Inc.allows users to play the trial versions of its games without any charge.However, users have to purchase the games to access the upgraded version of the games with advanced features.Which of the following business models is Pilot Games using in this scenario?

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

Which of the following equations best expresses return on revenue?

_____, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Should a firm ideally have a higher or a lower ratio of payables turnover?

_____ are best described as the value of the best forgone alternative use of the resources employed.

Which of the following is an advantage of the balanced scorecard?

What is the relationship between producer surplus and consumer surplus?

Unlike the financial ratios based on accounting data, total return to shareholders is:

Which of the following ratios best expresses inventory turnover?

What Is Strategy

Strategic Leadership: Managing the Strategy Process

External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Internal Analysis: Resources, Capabilities, and Core Competencies

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation, Entrepreneurship, and Platforms

Corporate Strategy: Vertical Integration and Diversification

Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters

Exam 5: Competitive Advantage, Firm Performance, and Business Models

The fixed asset turnover of a company is 8.3.What do you infer from this?

A firm has 30 million shares outstanding, and each share is traded at $100.Also, each shareholder gets a dividend of $2000 annually.In this case, the market capitalization is _____.

In the freemium business model, the:

Discuss the limitations associated with using accounting data to measure competitive performance.

What do you mean by opportunity costs? What are the opportunity costs for entrepreneurs?

How are the balanced scorecard and triple-bottom-line approaches different from the traditional approaches to measure competitive advantage?

What do you mean by triple-bottom line?

How does a firm capture its producer surplus for a good or service?

Pilot Games Inc.allows users to play the trial versions of its games without any charge.However, users have to purchase the games to access the upgraded version of the games with advanced features.Which of the following business models is Pilot Games using in this scenario?

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

Which of the following equations best expresses return on revenue?

_____, which is the return on risk capital, includes stock price appreciation plus dividends received over a specific period.

Should a firm ideally have a higher or a lower ratio of payables turnover?

_____ are best described as the value of the best forgone alternative use of the resources employed.

Which of the following is an advantage of the balanced scorecard?

What is the relationship between producer surplus and consumer surplus?

Unlike the financial ratios based on accounting data, total return to shareholders is:

Which of the following ratios best expresses inventory turnover?

What Is Strategy

Strategic Leadership: Managing the Strategy Process

External Analysis: Industry Structure, Competitive Forces, and Strategic Groups

Internal Analysis: Resources, Capabilities, and Core Competencies

Business Strategy: Differentiation, Cost Leadership, and Blue Oceans

Business Strategy: Innovation, Entrepreneurship, and Platforms

Corporate Strategy: Vertical Integration and Diversification

Corporate Strategy: Strategic Alliances, Mergers and Acquisitions

Global Strategy: Competing Around the World

Organizational Design: Structure, Culture, and Control

Corporate Governance and Business Ethics

Filters