Question 1

Generating capital by means of debt financing:

Accepted Answer

A)  Involves borrowing money, either from a bank loan or from the use of corporate bonds. 
B)  Means that the firm borrowing the money will have to pay interest charges. 
C)  May be worth it if the borrowed money is used to implement a marketing plan that earns a return greater than the cost of borrowing the money. 
D)  Means that the firm will have to put up some of its assets as a loan guarantee. 
E)  All of the above. 
A)  Involves borrowing money, either from a bank loan or from the use of corporate bonds. 
B)  Means that the firm borrowing the money will have to pay interest charges. 
C)  May be worth it if the borrowed money is used to implement a marketing plan that earns a return greater than the cost of borrowing the money. 
D)  Means that the firm will have to put up some of its assets as a loan guarantee. 
E)  All of the above.

Question 2

Each month the billing department of Phoenix Enterprises processes an average of 51 orders from customers at a cost of about $612 (in salaries and supplies). What is the average cost per order for this department (to the nearest dollar amount)?

Accepted Answer

A)  $4 
B)  $6 
C)  $8 
D)  $10 
E)  $12 
A)  $4 
B)  $6 
C)  $8 
D)  $10 
E)  $12

Question 3

Which of the following is associated with debt financing?

Accepted Answer

A)  Dividends 
B)  Stock appreciation 
C)  Interest cost 
D)  Bonus shares 
E)  Stock split 
A)  Dividends 
B)  Stock appreciation 
C)  Interest cost 
D)  Bonus shares 
E)  Stock split

Question 4

A firm with a great strategy will always attract investors.

Accepted Answer

A) True 
 B)False

Question 5

Examples of functional accounts include taxes, supplies, and wages.

Accepted Answer

A) True 
 B)False

Question 6

Regarding the use of funds generated within the firm:

Accepted Answer

A)  Reinvesting cash generated from operations is usually more expensive than borrowing money. 
B)  A company with a product that has significant growth potential should invest the earnings from that product to salvage declining products. 
C)  Indirect distribution usually requires more investment capital for a producer than does direct distribution. 
D)  When finances are tight, companies should look for strategy alternatives that help get a better return on money already invested. 
E)  All of the above. 
A)  Reinvesting cash generated from operations is usually more expensive than borrowing money. 
B)  A company with a product that has significant growth potential should invest the earnings from that product to salvage declining products. 
C)  Indirect distribution usually requires more investment capital for a producer than does direct distribution. 
D)  When finances are tight, companies should look for strategy alternatives that help get a better return on money already invested. 
E)  All of the above.

Question 7

Just as a firm has a social responsibility in the country where it sells products, it also has a social responsibility to the people who produce its products.

Accepted Answer

A) True 
 B)False

Question 8

"Working capital" is the money needed to pay for investments in facilities, equipment and other "fixed assets" needed to do the firm's basic work.

Accepted Answer

A) True 
 B)False

Question 9

Each month the sales staff of Capital Plumbing Supplies, Inc., makes an average of 125 sales calls on prospective customers at a cost of about $3,500 (salary plus expenses). What is the average cost of a sales call (to the nearest dollar amount)?

Accepted Answer

A)  $22 
B)  $25 
C)  $28 
D)  $31 
E)  $34 
A)  $22 
B)  $25 
C)  $28 
D)  $31 
E)  $34

Question 10

Internal sources for capital include loans, stocks, and bonds.

Accepted Answer

A) True 
 B)False

Question 11

A virtual corporation is likely to look for a capable supplier to produce a product that meets the specs laid out in the firm's marketing plan.

Accepted Answer

A) True 
 B)False

Question 12

A strategy that's expected to "pay it's own way" must be based on a plan that generates the working capital needed to implement the plan.

Accepted Answer

A) True 
 B)False

Question 13

Compared to most U.S. firms, Japanese firms have a reputation for expecting a marketing plan to be profitable in a much shorter period of time.

Accepted Answer

A) True 
 B)False

Question 14

Selling stock is a common way to raise money for capital and involves selling shares in the ownership of the company.

Accepted Answer

A) True 
 B)False

Question 15

The first step in marketing cost analysis is to:

Accepted Answer

A)  Reclassify the dollar cost entries in the functional accounts into natural cost accounts. 
B)  Use the entries in the functional accounts to evaluate the profitability of profit centers. 
C)  Allocate the entries in the functional accounts to specific customers. 
D)  Reclassify the dollar cost entries in the natural accounts into functional cost accounts. 
E)  None of the above. 
A)  Reclassify the dollar cost entries in the functional accounts into natural cost accounts. 
B)  Use the entries in the functional accounts to evaluate the profitability of profit centers. 
C)  Allocate the entries in the functional accounts to specific customers. 
D)  Reclassify the dollar cost entries in the natural accounts into functional cost accounts. 
E)  None of the above.

Question 16

A virtual corporation:

Accepted Answer

A)  has strong capital, but it can only survive if it develops a close relationship (i.e., a partnership) with another firm that has developed a good marketing plan. 
B)  looks for capable suppliers who can meet the specs it lays out. 
C)  handles all of its sales using the Internet. 
D)  all of the above 
E)  none of the above 
A)  has strong capital, but it can only survive if it develops a close relationship (i.e., a partnership) with another firm that has developed a good marketing plan. 
B)  looks for capable suppliers who can meet the specs it lays out. 
C)  handles all of its sales using the Internet. 
D)  all of the above 
E)  none of the above

Question 17

In general, the greater the risk that the lender takes on to provide the loan, the greater the interest rate charge will be.

Accepted Answer

A) True 
 B)False

Question 18

Capital comes from external sources and working capital comes from internal sources.

Accepted Answer

A) True 
 B)False

Question 19

It would probably be a bad idea to go to work as a salaried salesperson selling installations for a firm that didn't have any working capital.

Accepted Answer

A) True 
 B)False

Question 20

A firm's working capital may come from either internal sources--such as company bonds--or external sources--such as money paid by customers.

Accepted Answer

A) True 
 B)False

Exam 20: Managing Marketings Link With Other Functional Areas

Generating capital by means of debt financing:

Each month the billing department of Phoenix Enterprises processes an average of 51 orders from customers at a cost of about $612 (in salaries and supplies). What is the average cost per order for this department (to the nearest dollar amount)?

Which of the following is associated with debt financing?

A firm with a great strategy will always attract investors.

Examples of functional accounts include taxes, supplies, and wages.

Regarding the use of funds generated within the firm:

Just as a firm has a social responsibility in the country where it sells products, it also has a social responsibility to the people who produce its products.

"Working capital" is the money needed to pay for investments in facilities, equipment and other "fixed assets" needed to do the firm's basic work.

Each month the sales staff of Capital Plumbing Supplies, Inc., makes an average of 125 sales calls on prospective customers at a cost of about $3,500 (salary plus expenses). What is the average cost of a sales call (to the nearest dollar amount)?

Internal sources for capital include loans, stocks, and bonds.

A virtual corporation is likely to look for a capable supplier to produce a product that meets the specs laid out in the firm's marketing plan.

A strategy that's expected to "pay it's own way" must be based on a plan that generates the working capital needed to implement the plan.

Compared to most U.S. firms, Japanese firms have a reputation for expecting a marketing plan to be profitable in a much shorter period of time.

Selling stock is a common way to raise money for capital and involves selling shares in the ownership of the company.

The first step in marketing cost analysis is to:

A virtual corporation:

In general, the greater the risk that the lender takes on to provide the loan, the greater the interest rate charge will be.

Capital comes from external sources and working capital comes from internal sources.

It would probably be a bad idea to go to work as a salaried salesperson selling installations for a firm that didn't have any working capital.

A firm's working capital may come from either internal sources--such as company bonds--or external sources--such as money paid by customers.

Marketings Value to Consumers, Firms, and Society

Marketing Strategy Planning

Evaluating Opportunities in the Changing Marketing Environment

Focusing Marketing Strategy With Segmentation and Positioning

Demographic Dimensions of Global Consumer Markets

Final Consumers and Their Buying Behavior

Business and Organizational Customers and Their Buying Behavior

Improving Decisions With Marketing Information

Elements of Product Planning for Goods and Services

Product Management and New-Product Development

Place and Development of Channel Systems

Distribution Customer Service and Logistics

Retailers,wholesalers,and Their Strategy Planning

Promotion-Introduction to Integrated Marketing Communications

Personal Selling and Customer Service

Advertising, Publicity, and Sales Promotion

Pricing Objectives and Policies

Price Setting in the Business World

Implementing and Controlling Marketing Plans: Evolution and Revolution

Ethical Marketing in a Consumer-Oriented World: Appraisal and Challenges

Economics Fundamentals

Marketing Arithmetic

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