Question 1

Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method?
A) Cost of goods sold
B) Selling expense
C) Administrative expense
D) Interest expense
E) All of these items can be forecasted using the percentage-of-sales method.

Accepted Answer

Interest expense is not directly related to sales, so it cannot be forecasted using the percentage-of-sales method. It depends on factors such as interest rates, debt levels, and financing decisions.

Question 2

Multidimensional scaling is used to determine
A) the size of a new building.
B) the size of a new department.
C) the amount of high-tech equipment a firm needs.
D) product positioning.
E) market segmentation.

Accepted Answer

Multidimensional scaling is commonly used for product positioning analysis to understand how consumers perceive a product relative to other products in the market. It helps to identify the underlying dimensions that consumers use to evaluate products, and then positions each product in a multi-dimensional space based on those dimensions.

Question 3

Which variable would be considered part of the "place" element of the marketing mix?
A) Product line
B) Service level
C) Personal selling
D) Sales territory
E) Discounts and allowances

Accepted Answer

Sales territory is directly related to the location or place where the product or service is being marketed, making it a part of the "place" element of the marketing mix. Product line, service level, personal selling, and discounts and allowances are all related to other elements of the marketing mix such as product, quality, promotion, and price, respectively.

Question 4

Which of these is NOT a rule of thumb when using product positioning as a strategy-implementation tool?
A) "The best opportunity might be an unserved segment."
B) "Look for the hole or vacant niche."
C) "Try to serve more than one segment with the same strategy."
D) "Don't position yourself in the middle of the map."
E) All of these are valid rules of thumb.

Accepted Answer

Serving more than one segment with the same strategy can lead to a lack of focus and ineffective targeting. It's important to tailor the positioning strategy for each segment to ensure maximum effectiveness.

Question 5

Looking for a vacant niche helps a company determine
A) its advertising budget.
B) the size of the marketing department.
C) the best place to position a product.
D) the best place to locate a new facility.
E) its projected R&D expenditures.

Accepted Answer

Finding a vacant niche in the market helps a company determine the best place to position its product. This can include identifying gaps or areas where competitors are not satisfying customer needs, and positioning the company's product to fill that gap. This can help the company to differentiate itself from competitors and target a specific customer base, ultimately leading to increased sales and profitability.

Question 6

Which is NOT a required step in product positioning?
A) Select key criteria that effectively differentiate products or services in the industry.
B) Serve two segments with the same strategy.
C) Plot major competitors' products or services in the resultant matrix.
D) Identify areas in the positioning map where the company's products or services could be most competitive in the given target market.
E) Develop a marketing plan to position the company's products and services appropriately.

Accepted Answer

Serving two segments with the same strategy is not a required step in product positioning. It is important to identify the key criteria for differentiation, analyze competitors, identify areas for competitiveness, and develop a marketing plan accordingly. However, serving multiple segments with the same strategy can lead to ineffective positioning for both segments. Each segment may have unique needs and preferences that require a different approach to positioning.

Question 7

In preparing projected statements, to project cost of goods sold and the expense items in the income statement, which of these methods is recommended?
A) Determining the net worth method
B) What a firm earns method
C) Percentage-of-sales method
D) Price-earnings ratio method
E) Outstanding shares method

Accepted Answer

The Percentage-of-sales method is recommended for projecting cost of goods sold and expense items in the income statement because it calculates these items as a percentage of the projected sales. This method allows for a more accurate reflection of the expected costs than simply using a flat dollar amount or a ratio derived from other financial statements like net worth or earnings.

Question 8

What entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry?
A) Positioning
B) Segmentation
C) Penetration
D) Diversification
E) Budgeting

Accepted Answer

Developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry is known as positioning. This involves understanding the competitive landscape and identifying ways to differentiate your product or service from others in the market.

Question 9

Which of the following is true about two different market segments?
A) They can usually be served with the same marketing strategy.
B) They usually require different marketing strategies.
C) They are always in different geographic locations.
D) They are usually interchangeable.
E) All of the above

Accepted Answer

Two different market segments usually require different marketing strategies because their needs, preferences, and behavior differ. A one-size-fits-all approach is not effective in targeting different market segments. Option A, C, and D are incorrect as they do not reflect the reality of segmenting markets.

Question 10

Projected financial analysis is an important strategy-implementation technique because
A) it is an exact measurement of financial costs in the future.
B) it is an exact measurement of future company profits.
C) it allows an organization to examine the expected results of various actions and approaches.
D) insurance needs can be computed.
E) none of the above

Accepted Answer

Projected financial analysis allows an organization to examine the expected results of various actions and approaches. It helps in making informed decisions about resource allocation, budgeting, and financing. It also helps in identifying potential risks and opportunities and devising strategies to address them. However, it is not an exact measurement of financial costs or profits in the future, and it does not directly compute insurance needs.

Question 11

What is the most widely used technique for determining the best combination of debt and stock?
A) Debt-to-stock ratio
B) Earnings per share/earnings before interest and tax analysis
C) Gross profit analysis
D) Capital asset pricing model
E) Present value analysis

Accepted Answer

Earnings per share/earnings before interest and tax analysis is commonly used to determine the optimal capital structure by analyzing the impact of different financing options on a company's earnings.

Question 12

Which of the following is NOT true regarding stock issuances?
A) They are always better than debt for raising capital.
B) Their effect on stock price is a concern.
C) They can require a company to share future earnings with all new shareholders.
D) Dilution of ownership is a special concern.
E) All of the above statements are true.

Accepted Answer

Stock issuances are not always better than debt for raising capital. The choice between issuing stock or taking on debt depends on various factors, including the cost of capital and the company's borrowing capacity.

Question 13

What becomes a more attractive financing technique when cost of capital is high?
A) Stock issuance
B) Debt
C) Cost cutting
D) Borrowing
E) Staying privately owned

Accepted Answer

The answer of What becomes a more attractive financing technique...

Question 14

Which of the following is NOT given as an example of a decision that may require finance/accounting policies?
A) To extend the time of accounts receivable
B) To establish a certain percentage discount on accounts within a specified period of time
C) To lease or buy fixed assets
D) To use LIFO, FIFO, or a market-value accounting approach
E) To determine the amount of product diversification

Accepted Answer

Product diversification is not a decision that requires finance/accounting policies. It is a strategic decision that involves market research, customer preferences, and competitive analysis. The other options listed involve financial decisions that require accounting policies to ensure accurate record-keeping, compliance with tax laws, and optimal financial outcomes for the business.

Question 15

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?
A) Debt appears to be the best financing alternative.
B) Stock would be the best financing alternative.
C) A combination of debt and stock is probably the best financial alternative.
D) Dividends must be considered before conclusions can be made.
E) The company should be privately owned.

Accepted Answer

The answer of After completing an EPS/EBIT analysis, what conclusions...

Question 16

What is a drawback of using only equity to raise capital?
A) The cost
B) Fluctuations in the stock market
C) Dilution of the control of the company
D) That it will cause EPS to roller coaster
E) That it doesn't raise as much capital as debt financing

Accepted Answer

Using only equity to raise capital can lead to dilution of the control of the company as more shares are issued to investors. This means that the original owners or shareholders will have a smaller proportion of the company and may lose decision-making power.

Question 17

The first step in performing projected financial analysis is to
A) prepare the projected balance sheet.
B) take an inventory of goods.
C) estimate increases in debt.
D) prepare the projected income statement.
E) calculate the projected net income.

Accepted Answer

The first step in performing projected financial analysis is to prepare the projected income statement. This statement helps to estimate revenues, expenses, and net income for a given period, which is the basis for projecting other financial statements such as the balance sheet and cash flow statement.

Question 18

A benefit of using projected balance sheets and income statements is that
A) an organization can compute projected financial ratios under various scenarios.
B) money can be put aside to pay future income taxes.
C) insurance needs can be computed.
D) it is useful in analyzing past performance.
E) all of the above

Accepted Answer

Projected balance sheets and income statements allow an organization to estimate future financial performance and compute projected financial ratios under different scenarios. This can be helpful in making decisions and planning for the future. While the other options may also be relevant, they are not specifically benefits of using projected financial statements.

Question 19

In the low earnings period, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.
A) debt
B) liquidity
C) equity
D) cash
E) tax liability

Accepted Answer

During a period of low earnings, if a company has too much debt in its capital structure, it may struggle to meet its interest and principal payments. This can result in a lower return for stockholders and potentially even bankruptcy for the company. Therefore, excessive debt can jeopardize both stockholder returns and company survival during a low earnings period.

Question 20

What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches?
A) EPS/EBIT
B) Financial budgeting
C) TOWS analysis
D) Projected financial statement analysis
E) External analysis

Accepted Answer

The answer of What is a central strategy-implementation technique that...

Quiz 8: Implementing Strategies: Marketing, Financeaccounting, RD, and MIS Issues

Which element in the projected income statement CANNOT be forecasted using the percentage-of-sales method?

Multidimensional scaling is used to determine

Which variable would be considered part of the "place" element of the marketing mix?

Which of these is NOT a rule of thumb when using product positioning as a strategy-implementation tool?

Looking for a vacant niche helps a company determine

Which is NOT a required step in product positioning?

In preparing projected statements, to project cost of goods sold and the expense items in the income statement, which of these methods is recommended?

What entails developing schematic representations that reflect how your products or services compare to competitors' on dimensions most important to success in the industry?

Which of the following is true about two different market segments?

Projected financial analysis is an important strategy-implementation technique because

What is the most widely used technique for determining the best combination of debt and stock?

Which of the following is NOT true regarding stock issuances?

What becomes a more attractive financing technique when cost of capital is high?

Which of the following is NOT given as an example of a decision that may require finance/accounting policies?

After completing an EPS/EBIT analysis, what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

What is a drawback of using only equity to raise capital?

The first step in performing projected financial analysis is to

A benefit of using projected balance sheets and income statements is that

In the low earnings period, too much ________ in the capital structure of an organization can endanger stockholders' return and jeopardize company survival.

What is a central strategy-implementation technique that allows an organization to examine the expected results of various actions and approaches?