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Pricing Strategy Financial Analysis Break Even document sample
Pricing Strategy Financial Analysis Break Even document sample
HIGHLINE COMMUNITY COLLEGE BUSN155 - Entrepreneurship Spring - 2005 Question 1 Multiple Choice 10 points A "pushing" promotional strategy is: Designed to promote one item, at a time and place near the actual purchase decision. Designed to encourage the consumer to ask for the product if the retailer does not carry it. Primarily used when goods or services are marketed to the ultimate consumer. Designed to market the product to wholesalers and retailers. Question 2 Multiple Choice 10 points Which of the following groups would have the LEAST interest in the company's financial statements? Creditors Customers Potential investors Management Question 3 Multiple Choice 10 points Which of the following would not normally be considered a part of a promotional strategy? Product packaging Changes in production capacity Advertising Store displays Question 4 Multiple Choice 10 points The paths that goods and services follow from producer to consumer are known as: The wheel of retailing Distribution channels Transportation networks Logistics Question 5 Multiple Choice 10 points In break-even analysis, the costs that change with the level of sales are called: Recoverable costs Variable costs Labor costs Overhead costs Question 6 Multiple Choice 10 points The Social Club is performing a break-even analysis to determine how many tickets it must sell at $15 each to break even on the Holiday Dance. Fixed Costs are $2,000 and the Variable Cost per person is $10. How many tickets must be sold in order to break even? 800 500 400 40 Question 7 Multiple Choice 10 points Pure Products has a new reusable coffee filter that is almost ready to offer for sale. The company believes that the Product Life Cycle will be very long for this item, and because the product is relatively easy to manufacture they believe that competitors could emerge soon after the product introduction. What pricing strategy would you recommend to Pure Products? Skimming Cost-based pricing Penetration pricing Psychological pricing Question 8 Multiple Choice 10 points In which stage of the Product Life Cycle do competitors enter the market with similar products? Introduction Growth Maturity Decline Question 9 Multiple Choice 10 points When a firm uses $100,000 in cash to pay dividends to owners, Assets will _____ by $100,000, and Owners Equity will _____ by $100,000. rise: fall Fall: rise fall: fall rise: rise Question 10 Multiple Choice 10 points Tank Tops Unlimited is conducting a break-even analysis on unbleached cotton tops. Fixed Costs are $100,000 and the per-unit contribution to fixed costs is $20. To break even, how many tank tops must be sold? 20,000 units 5,000 units 500 units 200 units Question 11 Multiple Choice 10 points Which accounting statement is based on the accounting equation? Balance Sheet Income Statement Asset Statement Owners Equity Statement Question 12 Multiple Choice 10 points Betty is considering buying stock in Microsoft. As a user of accounting information, she would be most interested in using this information to do what? Plan and control Improve contract negotiations Evaluate credit ratings In order to make an investment decision Question 13 Multiple Choice 10 points Boring, Inc., has $50 million in assets and $30 million in owners equity. How much does the firm have in liabilities? $20 million $30 million $50 million $80 million Question 14 Multiple Choice 10 points Choktaw Products buys a $500,000 machine by taking out a bank loan. The company's assets will ___ by $500,000, while it's liabilities will ___ by $500,000. increase; decrease increase; increase decrease; increase decrease; decrease Question 15 Multiple Choice 10 points Which of the following assets would be listed first on the assets side of a Balance Sheet? Fixed Assets Prepaid Expenses Accounts Receivable Inventory Question 16 Multiple Choice 10 points By definition, all Current Liabilities are due within what time period? 30 days 90 days 180 days One year Question 17 Multiple Choice 10 points If a company sells products on credit, which Balance Sheet account would be affected? Accounts Payable Accounts Receivable Fixed Assets Sales Question 18 Multiple Choice 10 points Anything of value that is used by a company for periods longer than one year is considered a(n) ______. Fixed Asset Current Asset Accumulated Depreciation Long-term Debt Question 19 Multiple Choice 10 points Which of the following is NOT included when calculating the quick, or "acid-test" ratio? Cash Inventory Accounts Receivable All of these are used to calculate the ratio. Question 20 Multiple Choice 10 points Last year a firm had a Current Ratio of 1.5 and a Quick (Acid-test) Ratio of 0.75. This year the firm's Current Ratio is 2.0 and it's Quick Ratio is 1.0. This firm's ____ has ____. Profitability; Improved Liquidity; Deteriorated. Liquidity; Improved Profitability; Deteriorated Question 21 Multiple Choice 10 points Which of the following are designed to indicate how successful a firm is in terms of its earnings as compared with its assets or owners equity. Liquidity Ratios Activity Ratios Profitability Ratios Debt Ratios. Question 22 Multiple Choice 10 points All of the following are cash inflows except ______. Cash sales. Loan proceeds. Collection of Accounts Receivable Sales on Credit Question 23 Multiple Choice 10 points Many retailers have seasonal sales - sales are heaviest during the last three months of the year. Given that retailers have to build up inventories in anticipation of sales, in which quarter will many retailers experience significantly negative cash flow? First: January through March Second: April through June Third: July though September Fourth: October through December Question 24 Multiple Choice 10 points A Business Plan ________. Is meant to be looked at once a year. Should be used when developing business strategies. Is only needed if you are borrowing money. Is not as important as aMarketing Plan. Question 25 Multiple Choice 10 points At year-end, Cost of Goods Sold is $150,000. Beginning Inventory was $20,000, and Purchases were $160,000 during the year. What is the Inventory Turnover Ratio? 8 10 6 Not enough information Question 26 Multiple Choice 10 points The purpose of Inventory Management is: To have inventory when you need it. To not tie up too much capital in inventory. To make sure quality of purchased items is consistent. All of these. Question 27 Multiple Choice 10 points I have friends across the country who are operating exactly the same type of store as I am, selling the same type of goods. We meet once a year to compare notes, and this year I found out that everyone else has an Inventory Turnover Ratio of 6, while mine is only 3. What might I learn from this? My inventory level is too high compared to my friends. My prices are too high compared to my friends. My sales are lower compared to my friends. All of the above. Question 28 Multiple Choice 10 points The benefits of utilizing a web site include which of these? Increased sales of products, lower marketing costs. I can decrease my sales tax bill. I can decrease my product liability insurance. I can reduce the time I spend managing my business. Question 29 Multiple Choice 10 points The biggest concern of shoppers on the internet is____. That prices will be higher than if they bought the items locally. Privacy and security. Availability of different styles and colors. Shipping costs. Question 30 Multiple Choice 10 points The biggest reason customers are lost is: They move away. They find the item cheaper elsewhere. We ignore them. They have a friend who recommends that they try some other company.
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