Question 1

Which TWO of the following statements are MOST likely to be correct in relation to the three financial management decisions?

Options :

A : High-growth companies are likely to need high levels of capital investment, use low levels of debt and pay out relatively high proportions of their profits as dividends.

B : High-growth companies are likely to need high levels of capital investment, use high levels of debt finance and retain high proportions of profits rather than pay out dividends.

C : Mature companies tend not to require high levels of capital investment, they use high levels of debt and make high dividend payouts.

D : Mature companies tend not to require high levels of capital investment, they use low levels of debt and make high dividend payouts.

E : High-growth companies are likely to need high levels of capital investment, use low levels of debt finance and retain high proportions of profits rather than pay out dividends.

Answer: D,E

Question 2

When evaluating the cost of quality in an organization, which one of the following would be considered an internal failure cost?

Options :

A : Product testing.

B : The warranty repair costs.

C : The cost to inspect units produced.

D : The cost to rework defective units.

Answer: D

Question 3

A firm wishing to sell its well-known brand of men's clothing in a certain foreign country redesigned the products because of the greater average size of consumers in that country. However, the firm retained the same basic advertising campaign. This firm has adopted which adaptation strategy?

Options :

A : Product adaptation.

B : Backward invention.

C : Straight extension.

D : Forward invention.

Answer: A

Question 4

Which of the following correctly orders the steps in the Strategic Planning Process?

Options :

A : Environmental Scanning, Vision and Mission, Strategy Design, Strategy Implementation, Evaluation and Control

B : Vision and Mission, Environmental Scanning, Strategy Design, Strategy Implementation, Evaluation and Control

C : Vision and Mission, Environmental Scanning, Strategy Design, Evaluation and Control, Strategy Implementation

D : Vision and Mission, Environmental Scanning, Strategy Implementation, Strategy Design, Evaluation and Control

Answer: B

Question 5

A global shipping company applied an advanced information technology system to all its operations to ensure timely delivery. The proprietary information technology system is an example of

Options :

A : market position.

B : core competency.

C : vertical integration.

D : operating leverage.

Answer: B