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BA 101|123 Final Questions Containing
Answers| MIDTERM
__________ is an ethical or ideological theory that an entity or individual has a responsibility to society at large. - โ โ Social Responsibility ___________ measures profit on a per share basis. - โ โ Earnings Per Share ____________ warranty stipulates the specific terms the seller will honor beyond basic buyer assumptions. - โ โ An expressed _____________compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account - โ โ Net Present Value _____________compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account: - โ โ Net Present Value "Whistleblowers" are protected by the: - โ โ 2002 Sarbanes-Oxley Act 3 forms of law - โ โ Common law Judges interpret laws based on precedent (earlier verdicts) to resolve disputes.
Statutory law Laws enacted by a federal or state legislature.
Administrative law Regulations passed by state and federal administrative agencies (e.g. the EPA). A ________ is created when two or more individuals agree to create a business and jointly own the assets, be responsible for the liabilities, and share both the profits and the losses. - โ โ partnership A disadvantage of the break-even analysis is that break-even: - โ โ does not specify a time frame. considers that all products have the same price. considers that all products have the same variable costs. does not account for the Net Present Value. ALL OF THE ABOVE
A form of dispute resolution where the parties submit their case to a neutral third party that acts somewhat like a judge is: - โ โ arbitration A form of negotiated resolution to help two parties reach a negotiated settlement where the third party functions more like a counselor that a judge is: - โ โ mediation A Limited Liability Company (LLC) is an attractive choice for many business owners because it offers: - โ โ key advantages of a corporation and the simplicity of a partnership. A person's contractual capacity may be limited or nonexistent if he/she is: - โ โ a minor A purposeful unlawful act to deceive or manipulate in order to damage others is called: - โ โ Fraud A trial court deals solely with appeals relating to the interpretation of law. - โ โ False A(n) _______ typically occurs when one party makes an offer and the other accepts - โ โ contract All contracts must meet certain requirements. The three elements that are enforceable by the courts include. - โ โ voluntary agreement, consideration and contractual capacity All sales are covered by ________ warranty. - โ โ an implied An implied warranty allows the buyer to assume that: - โ โ The seller has a clear title to the product (the seller owns the product), the product will perform the function for which it was produced and sold, and the product will perform as advertised. arbitration - โ โ both binding and non-binding Articles of partnership are required by many states for businesses that have two or more co-owners. - โ โ True Book Value - โ โ (Total shareholder equity - preferred equity ) / total outstanding shares = book value Breach of contract - โ โ A violation of a valid contract where the injured party goes to court to enforce contract and (sometimes) collect damages Chris and Kelly want to open a business in the most efficient way possible with the least interference from government regulation. Which choice might they consider as the most attractive? - โ โ Partnership or Limited Liability Company Competition puts pressure on sellers to offer their customers a higher quality product at an attractive price. - โ โ True
Civil law - A dispute between two individuals Fine may be imposed, but no imprisonment Current Ratio - โ โ Current Ratio = Current Assets/ Current Liabilities Debt to Asset Ratio - โ โ (Short Term + Long term Debt) / Total Assets Debt to total assets - โ โ Debt to Total Assets Ratio = Total Debt/Total Assets Earnings Per Share - EPS - โ โ ( net income - dividends) / outstanding shares = EPS EBIT - โ โ Earnings Before Interest and Taxes Elements of a contract - โ โ Legal purpose (offer and acceptance)
Consideration
Voluntary agreement Examples of torts - โ โ Assault
Slander (making a false spoken statement damaging to a person's reputation)
Libel (making a false published statement damaging to a person's reputation)
Product Liability
Fraud (someone "hurts" another by deception or manipulation)
Falsification of records involves: - โ โ Manipulating records to present an inaccurate set of information to managers, owners and/or potential investors. From the in-class video, which is also available on Canvas, how are Second Chance's products produced?
- โ โ By the organization itself with their own employees From the in-class video, which is also available on Canvas, who is the primary target market for Second Chance? - โ โ Law Enforcement From the stock table, such as found in FastTrack on page 2, what is the best measurement of the greatest increase in wealth last year? - โ โ Change in stock price how do you protect your work and property? - โ โ Patent, trademark, service mark, and copyrigh
How is the acquisition of capital managed through the finance department? - โ โ Purchase inventory on credit. Arrange for a short term loan to be paid back in one year. Issue bonds for a long term loan. Issue stock. ALL OF THE ABOVE How would you describe Milton Friedman's view of the role of business in society? - โ โ The role of business is to maximize returns for its owners. In Foundation, what decisions can you make to improve your contribution margin without having a negative impact on the number of units you sell? - โ โ Increase automation In Foundation, what decisions can you make to improve your contribution margin? - โ โ raise your price. make your product bigger make your product slower. increase your automation ALL OF THE ABOVE In its most simplistic form, social responsibility involves four steps in this order: - โ โ Be profitable, obey the law, be ethical, and be a good corporate citizen. In selecting the board of directors, common stockholders have the opportunity to: - โ โ vote
If the NPV of a prospective project is positive, it should be accepted, If NPV is negative, the project should be rejected. Net Present Value is the difference between: - โ โ the present value of the future cash flows from an investment and the cost of that investment. One assessment of the general financial health of a business is to look at how much debt the business has in relation to the assets it controls. The ratio that determines this is the: (Refer to the "Financial Ratios and Ratio Analysis" section of Chapter 5 in "An Introduction to Business.") - โ โ Total-Debt- to-Total-Assets Ratio Only contracts that meet certain requirements called ________ are enforceable by the courts. - โ โ elements Private Enterprise - โ โ The market turns self-interest into social good.
To work, the system has to have: Private property Freedom of choice Right to keep profits Fair competition Public corporations must file reports with the: - โ โ state Public corporations must file reports with the: - โ โ State Quick or Acid Ratio - โ โ (Cash + Accounts Receivable + Short Term Investments) / Current Liabilities Return on Assets - ROA - โ โ Net Income / Total Assets Return on Equity (ROE) - โ โ Net Income / Owners' Equity How much profit did you create using the owners' investment? Return on Sales - โ โ Net Income/Sales
How much of your sales dollar is profit? Return on Sales - ROS - โ โ Net Income (before interest and taxes) / Sales SG&A - โ โ Selling, general & admin = period costs The _____ was enacted to simplify commerce. - โ โ Uniform Commercial Code The alternative dispute resolution method involves submission of a dispute to one or more third parties, usually chosen by the disputing parties, whose decision is final is: - โ โ binding arbitration The concept that money in-hand and available for use today is worth more than the same amount that will be received at some future date is explained by: - โ โ Net Present Value The federal organization that oversees corporate securities trading and that was impacted by Sarbanes- Oxley Act of 2002 is the: - โ โ Securities and Exchange Commission (SEC) The group of individuals elected by the stockholders to oversee the general operation of a corporation is known as the: - โ โ Board of Directors The primary method of conflict resolution and business disputes is through lawsuits, where one individual or organization takes another to court using criminal laws. - โ โ False The primary purposes of the law of bankruptcy are to: - โ โ give a business a "second chance" when they are unable to meet their contractual obligations. The two parties involved in an agency relationship are the ______ and the ______. - โ โ principal: agent The Uniform Commercial Code was enacted to simplify commerce from state to state. - โ โ True This is the point where total revenues equal total expenses and the next dollar of revenue will result in a profit. This is the: - โ โ Break-even point Tort is a civil wrong and includes all wrongs that are not breach of contract that may be intentional or result from negligence. - โ โ True Torts - โ โ A tort is a civil wrong inflicted on other people or their property.
Tort is a form of negligence
Intentional often punishable by imprisonment
What are some attributes that "should" be incorporated into and ethics policy? - โ โ Have the policy in writing and communicating those same standards verbally Monitor performance by management Provide information that is easily understandable and "doable" Impose consequences for non-compliance with the policy ALL OF THE ABOVE What are some opposing views to corporate policies govern ethical conduct? - โ โ Ethics cannot be mandated and a business is not a "mini-state" or a platform for social justice. What business entity requires the owner to perform the most functions and possess the broadest range of skills to manage the business? - โ โ Sole Proprietorship What company's Current Ratio with be the same as their Quick Ratio? (Refer to the "Financial Ratios and Ratio Analysis" section of Chapter 5 in "An Introduction to Business.") - โ โ Andrews what does the government do? - โ โ protects private enterprises What does the term "tort" mean? - โ โ A civil wrong inflicted on others or their property. What form of business ownership restrict the number and type of shareholders? - โ โ S Corporation What is a "social contract" and how might that impact the behavior of business? - โ โ It is when a business is more democratic and there are universal principles and actual agreements among the parties involved. What is a code of conduct violation? - โ โ Acting in a way that is inconsistent with an organization's ethical standards. what is a complement? - โ โ # of workers you have for the 1st shift What is a potential competitive ramification to U.S. businesses that do not offer bribes when competing in the internationally? - โ โ It can be a potential competitive disadvantage. What is an alternative dispute resolution method is a form of negotiation involving one or more third- parties, usually chosen by the disputing parties, to help reach a non-binding settlement? - โ โ mediation What is an example of mutual agency? - โ โ Any partner can bind the partnership to contracts or legal obligations without the approval of the other partners.
What is an expressed warranty? - โ โ A warranty that covers any additional terms the seller will honor. What ratio measure how much profit was created with owner's investments? - โ โ Return on Equity - ROE What ratio measures how much profit was created for each share of stock? - โ โ Earnings Per Share
- EPS What ratio measures how much profit was created for each share of stock? (Refer to the "Financial Ratios and Ratio Analysis" section of Chapter 5 in "An Introduction to Business.") - โ โ Earnings Per Share - EPS What ratio measures how much profit was created for every dollar of sales? - โ โ Return on Sales - ROS What ratio measures how much profit was created for every dollar of sales? (Refer to the "Financial Ratios and Ratio Analysis" section of Chapter 5 in "An Introduction to Business.") - โ โ Return on Sales - ROS What ratio measures how much profit was created in relation to the accumulated assets? - โ โ Return on Assets - ROA What statement best defines common law? - โ โ Unwritten laws that are established by judicial decisions and inherited from English law What statement best defines contract law? - โ โ The mutual agreement between two or more parties whose terms are enforceable in court. What type of disputes does criminal law address? - โ โ Disputes between the government and an individual Which of the following is an example of an ethics issue relating to the field of human resource management? - โ โ Global standards to protect against child labor and occupational safety and health issues Which of the following is an example of an ethics issue relating to the field of human resource management? - โ โ Privacy issues Which of the following is an example of an ethics issue relating to the field of sales and marketing? - โ โ Presenting accurate information in advertising and packaging Which of the following statements best describes the term ethicism? - โ โ The demand for ethical business processes and actions
