MGT 200
Q1. MBO is an important evaluation tool.
a. true
b. false
Q2. Activities carried out by firms in areas like R&D and strengthening corporate infrastructure
should be tracked as profit and loss activities.
a. true
b. false
Q3. Management by exception is a control methodology.
a. true
b. false
Q4. Market research:
a. One way enterprises become lean
b. Number of goods ordered for inventory
c. What do customers want?
Q5. When a product reaches the mature stage in its product life cycle, it is usually a good idea
for the company:
a. to begin developing new products to take up the slack when the old product declines
b. to spend more money advertising the product
c. to pull the product from the market, since the cost of maintaining it is greater than corresponding
benefits
d. to emphasize that maturity is good — it means that the product has withstood the test of time and is
worth buying
Q6. What does "360 degree review" refer to?
a. Profits are examined from the perspective of all players participating in business processes
b. The process of having key stakeholders assess business cases entailing investment in new business
opportunities
c. Employees and managers evaluate each other’s’ performance
d. An inspection of the quality of products by key stakeholders
Q7. When we refer to operations as a "transforming process," we mean that through operations
activities:
a. we transform our views of business activity from traditional perspectives to current perspectives
b. we transform the equipment and tools we use from obsolete equipment and tools to state-of-art
equipment and tools
c. we transform raw materials into finished products
d. we transform ideas into action
Q8. In many enterprises, training initiatives and processes fall under the purview of what
department?
a. Information technology
b. Sales
c. Human resources
d. Operations
Q9. Which of the following management techniques does not directly lead to empowerment?
a. Business process re-engineering
b. MBO
c. Self-managed team’s
d. Management by exception
Q10. Pro forma cash flow statements:
a. can be built directly from balance sheets
b. enable us to identify which assets are productive and which are not
c. show us month-by-month whether our cash position is positive or negative
d. are crucial in calculating net working capital
Q11. Having a high proportion of equity financing is more risky to the viability of a typical
enterprise than having a high proportion of debt financing.
a. true
b. false
Q12. On firm fixed-price contracts:
a. buyers assume most of the contract risk
b. contractors assume most of the contract risk
c. risk is usually split evenly between buyers and contractors
d. ultimate contract price will be increased, if contractors’ expenses increase
Q13. Which of the following is not a characteristic of a general partnership?
a. Limited liability
b. Partners share benefits
c. Actions of one partner commit all partners
d. If partnership agreement does not exist, partnership rules revert to rules established by the state
Q14. We run a consulting company. We would like to expand our business and increase revenues.
We know from past experience that the price elasticity of demand for our services is 0.70. It is
tempting to reduce the price of our services. If we do, what consequence can we anticipate?
a. Business volume and revenue will increase dramatically
b. Business volume and revenue will increase modestly
c. Business volume would not change significantly; the primary consequence of lowering price will be to
experience a loss of revenue
d. Business volume and revenue would both drop
Q15. Strategic plans should focus on details in order to enable enterprises to deal with long term
events.
a. true
b. false
Q16. Strategic planning:
a. Long-term view of operations
b. Predetermined bonus tied to performance
c. A goal of production processes
Q17. Which of the following is not a source of capital that enterprises can tap into?
a. Equity finance
b. Delayed payment terms arranged with supplier’s
c. Treasury bills
d. Loans
Q18. You have been asked to outline a business plan for a new half million dollar venture that will be carried
out by your company. In putting together the business plan, what consideration can you ignore?
a. The impact of the venture on the company’s stock price
b. Cash flow requirements of the venture
c. Operational issues associated with the venture
d. Human resource requirements associated with the venture
Q19. The fundamental accounting relationship underlying balance sheet analysis is:
a. Total assets = Fixed assets plus short term assets
b. Total liabilities = Total liabilities plus total equity
c. Operating revenue = Total sales minus cost of operations
d. Total assets = Total liabilities plus total equity
Q20. LLC:
a. Long-term view of operations
b. One way enterprises become lean
c. Similar to S-corporation
Q21. Company ABC only supports projects whose anticipated benefit-cost ratios are 2.5 or greater. Three
months into Project X (a nine month project), an evaluation of performance indicates that $1.5 million has
been spent on the project to date. This is $200,000 larger than planned. It is anticipated that it will cost $5
million more to complete the project, which would result in a total cost overrun of $1 million. The market
research group predicts that revenues from the project will total to $16 million within a year of the
completion of the project effort. What benefit-cost ratio does ABC’s senior managers encounter at this point
to help them make a decision on whether to move forward with the project?
a. 3.20
b. 2.46
c. 3.00
d. There is not enough information to determine the benefit-cost ratio
Q22. The ISO 9000 quality standards holds that "quality is conformance to specifications."
a. true
b. false
Q23. Which of the following is not a direct consequence of empowerment?
a. You gain employee commitment to doing a good job
b. Your costs drop while your revenues increase
c. You enable employees to make decisions
d. Your enterprise can function more nimbly, because decisions are made by employees interacting
directly with customers
Q24. Management by walking around:
a. Bosses visit employees on the floor
b. Senior management supports employees
c. Employees walk from workstation to workstation
Q25. According to Katzenbach and Smith in their book, The Wisdom of Teams, the primary way to assess the
value of a team is to determine:
a. whether team members have learned to cooperate with each other
b. whether team members know how to handle conflict in order to minimize disruptions to team efforts
c. Whether the team achieved its performance objectives
d. Whether team members value service to the team more highly than serving their self-interests
Q26. The "Can’t we agree to disagree?" perspective best reflects which conflict management strategy?
a. Withdrawal
b. Smoothing
c. Problem solving
d. Compromise
Q27. Process innovation is important because:
a. it can yield dramatic cost savings in business operations
b. it leads to the development of new products
c. expenses incurred lead to tax write-offs
d. it enables companies to charge higher prices for their products
Q28. In the earliest stages of estimating costs of a new venture, estimators will likely depend upon:
a. conceptual estimates
b. preliminary estimates
c. definitive estimates
d. bottom-up estimates
Q29. Economic order quantity (EOQ):
a. Number of goods ordered for inventory
b. One way enterprises become lean
c. A goal of production processes
Q30. Just-in-time (JIT) management focuses primarily on:
a. reducing inventory stores
b. providing customers the finished products they desire according to a schedule
c. using PERT/CPM charts to schedule activities accurately
d. avoiding schedule delays
Q31. By adopting flattened organizational structures, business enterprises can speed up decision
making.
a. true
b. false
Q32. If I put $50,000 into a savings account that grows 5% a year (compounded annually), and if
there are no administrative charges associated with my account, how much money will I have in
the account at the end of four years?
a. $60,000
b. $61,250
c. $60,775
d. $62,225
Q33. Which of the following is not a function of the production/operations effort of a typical
enterprise?
a. managing inventory
b. managing the supply chain
c. Managing quality
d. Managing financial strategy
Q34. Downsizing:
a. One way enterprises become lean
b. Predetermined bonus tied to performance
c. A goal of production processes
Q35. Inverted pyramid:
a. Bosses visit employees on the floor
b. Senior management supports employees
c. Structuring the work environment
Q36. Present value and compound interest are based on the same underlying formula, where the
formula’s terms have been moved around.
a. true
b. false
Q37. It is during the start-up stage of the product life cycle that profits grow most rapidly.
a. true
b. false
Q38. Your budget for task activities in October is $25,000. You find that the actual expenditures
for October is $27,000. What are the management implications of the data?
a. You spent too much in October and face a cost overrun
b. You spent too much in October, but the overrun is not major, so you need not be too concerned
c. You need to cut back on scope in order to bring costs into line with the budget
d. You do not have enough information to determine the true cost status of the October work effort
Q39. According to MBO principles, "Bob will get the job done as quickly as possible" is a good
statement of an objective.
a. true
b. false
Q40. Contract incentive fees:
a. One way enterprises become lean
b. Predetermined bonus tied to performance
c. What do customers want?
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