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Q:
A nested process refers to a process within a process.
Q:
Every process has a customer.
Q:
A process involves transforming inputs into outputs.
Q:
What are the three key functions of a firm and what is each responsible for?
Q:
The three mainline functions of any business are ________, ________, and ________.
Q:
Operations management refers to the systematic design, direction, and control of ________ that transform ________ into products and services.
Q:
Which of these Great Moments in Operations and Supply Chain Management did not occur in the 20th century?
A) invention of the assembly line
B) publication of the Toyota Production Systems book
C) establishment of railroads
D) strategic planning for achieving product variety
Q:
The foundations of modern manufacturing and technological breakthroughs were inspired by the creation of the mechanical computer by:
A) Charles Babbage.
B) James Watt.
C) Eli Whitney.
D) Frederick Taylor.
Q:
Regardless of how departments like Accounting, Engineering, Finance, and Marketing function in an organization, they are all linked together through:
A) management.
B) processes.
C) customers.
D) stakeholders.
Q:
Support functions in an organization include Accounting, Human Resources and Engineering.
Q:
The three main line functions of any business include Operations, Finance and Marketing.
Q:
As a functional area of a business, Operations translates materials and services into outputs.
Q:
Operations management refers to the direction and control of inputs that transform processes into products and services.
Q:
An observer has recorded the following select ( ) for a five-part task and has applied a rating factor (RF) to each. The times are in seconds. If there is a 15 percent allowance for "nonproductive" activities, compute the standard time for the total task. Element RF 1 6.2 0.9 2 1.7 1.1 3 4.5 1.2 4 1.2 0.8 5 5.0 1.2 The standard time for the task is: A) fewer than or equal to 21 seconds. B) greater than 21 seconds but fewer than or equal to 23 seconds. C) greater than 23 seconds but fewer than or equal to 25 seconds. D) greater than 25 seconds.
Q:
The methods time measurement system is a predetermined data system.
Q:
With the use of the elemental standard data approach: A) there is no need to estimate allowances. B) managers can develop standards for new work before production begins. C) time studies are not needed. D) the need to specify job variables that affect times for each work element is eliminated.
Q:
Which of the following statements regarding linear programming is not true? A) A linear programming problem can have more than one optimal solution. B) Most real-world linear programming problems are solved on a computer. C) If a binding constraint were relaxed, the optimal solution wouldn't change. D) A surplus variable is added to a > constraint to convert it to an equality.
Q:
A strain is placed on the supply chain during the ramp-up stage of the development process due to changing volumes, quality issues and last minute design changes.
Q:
3) The ramp-up stage of the development process precedes the full launch stage.
Q:
2) Concurrent engineering helps firms avoid the costly mismatch between the design of a new offering and the capability of the processes required to produce it.
Q:
Assume the real return in the economy is 5.0%. It is anticipated that the consumer price index will go from 340 to 363.8. Shares of common stock for the market in general are assumed to have a required rate of return one-fourth higher than the risk-free rate. Compute the required return on common stock..1583 or 15.83%
Q:
Assume the real rate of return for the economy is 3.75% and the expected rate of inflation is 6.75%. What is the risk-free rate?
Q:
___________ represent permanent capital funds that are donated to universities, churches, or civic organizations.
A.Trusts
B.Endowments
C.Commingled funds
D.Annuities
Q:
Assume the real rate of return in the economy is 4.25%, the expected rate of inflation is 3.5%, and the risk premium is 6.75%. Compute the risk-free rate and required rate of return.Risk free rate = .079 or 7.9%orRf = 7.75%Required Rate of Return =.1518 or 15.18%orRequired Rate of Return = 14.50%
Q:
(a) The stock of Furniture Unlimited went from $90 to $99 last year. The firm also paid 80 cents in dividends. Compute the rate of return.(b) During the next year, the dividend paid was $1.60 per share and the stock closed at $93 per share, down from $99 per share at the beginning of the year. Compute the annual gain or loss for the second year holding period.(a) 10.9%(b) (4.4%) loss
Q:
Organizations responsible for bringing together large pools of capital for purposes of reinvestment are called:
A.individual investors.
B.institutional investors.
C.social security clubs.
D.B and C
Q:
The largest category of institutional investors is:
A.foundations.
B.personal trusts.
C.mutual savings banks.
D.pension funds.
Q:
For which year were estate taxes eliminated under the Economic Growth and Tax Reconciliation Act of 2001?A.2008B.2009C.2010D.2019E.The estate tax will not be eliminated.
Q:
Which of the following are NOT examples of institutional investors?
A.Mutual funds and pension funds
B.Insurance companies
C.Commercial banks
D.All of the above are institutional investors
Q:
Which of the following is not a form of real asset?
A.Rare paintings
B.Baseball cards
C.Diamonds
D.Real estate
E.Commodity futures
Q:
Foundations represent profitable organizations set up to accomplish social, educational, or charitable purposes.
Q:
Historically, the real rate of return in the U.S. economy has been:
A.1-2%.
B.2-3%.
C.3-4%.
D.4-5%.
E.5-6%.
Q:
Which of the following is not a form of a financial asset?
A.Commercial paper
B.Commodity futures
C.Warrants
D.Personal residence
E.Money market fund
Q:
Pension funds represent a declining segment of the institutional market.
Q:
The two types of investments that provide the highest and lowest yields in the Ibbotson study of Stocks, Bonds, Bills and Inflation are:
A.large company stocks and U.S. treasury bills.
B.large company stocks and long-term government bonds.
C.small company stocks and U.S. treasury bills.
D.small company stocks and preferred stock.
E.U.S. treasury bills and small company stocks.
Q:
A duplex was purchased for $120,000, and depreciation of $3,300 has been taken for the last seven years. The net proceeds from the sale of the property were $135,000.
a) Assuming the property qualifies for capital gains treatment at a 15% rate, what is the tax owed?
b) What are the net funds from the sale?
Q:
Because most investors are risk averse,
A.the riskier the investment, the more the investor will pay for it.
B.the riskier the investment, the less compensation the investor requires.
C.only financial institutions invest in risky assets.
D.they will require a higher rate of return for a riskier investment.
Q:
An apartment complex has net operating income of $15,000, depreciation of $8,000, and interest expense of $13,000. The tax rate is 30%.
a) What is taxable income or loss?
b) What is the tax shield benefit or tax owed?
Q:
An investor in Duke Energy can expect:
A.low dividends.
B.high dividends.
C.low inflation.
D.fast stock price growth.
E.None of the above
Q:
An investment requires a total return that comprises:
A.a real rate of return and compensation for inflation.
B.a real rate of return, compensation for inflation, and a risk premium.
C.compensation for inflation and a risk premium.
D.a real rate of return, compensation for inflation, a risk premium, and compensation for time and effort devoted to researching alternative investments.
E.None of the above
Q:
Which of the following investments would theoretically always carry the highest risk premium?
A.U.S. treasury bill
B.Common stock
C.Preferred stock
D.Corporate bond
E.Any one of the above
Q:
Deposits in an IRA are:
A.allowed to grow tax free until withdrawal.
B.deducted from current income tax due.
C.deducted from current income to reduce income tax due.
D.A and C
Q:
What is the risk-free rate in an environment where the real rate is 3% and inflation is running at 3%? Use either method found in chapter one.
A.14.5% or just 14%
B.10.21% or just 10%
C.6.09% or just 6%
D.9.09% or just 9%
E.0%
Q:
What are the components in determining the real rate of return?
A.The risk premium
B.The inflation factor
C.The required rate of return
D.Both a) and b) above
E.None of the above
Q:
A stock that pays low or no cash dividends is:
A.eBay.
B.Duke Power.
C.AT&T.
D.All of the above
Q:
Stocks and bonds are preferred during periods of:
A.higher inflation.
B.lower inflation.
C.rising stock prices.
D.higher risk premiums.
E.None of the above
Q:
An investment in common stock carries a higher return than a bank certificate of deposit. The difference in returns is called:
A.the risk-free rate.
B.the real rate of return.
C.the risk premium.
D.the beta.
E.None of the above
Q:
Common stock dividends are now taxed at a maximum rate of:
A.10%.
B.15%.
C.20%.
D.30%.
E.38.8%.
Q:
What would be the rate of return for a stock that increased in value from $60 per share to $63 per share and paid a $3 dividend?
A.12%
B.11%
C.10%
D.1.5%
E.5%
Q:
The holding period to qualify for long-term capital gains is:
A.at least 6 months.
B.at least 9 months.
C.at least 18 months.
D.at least 2 years.
E.more than one year.
Q:
What is the rate of return on a share of common stock that increased in value from $40 to $50?
A.5%
B.10%
C.20%
D.25%
E.None of the above
Q:
Wealthy investors may prefer the favorable tax treatment of investments such as:
A.corporate bonds.
B.municipal bonds.
C.common stock.
D.preferred stock.
Q:
One of the reasons a short-term trader has difficulty in beating the market is because of:
A.risk.
B.lack of information.
C.large institutional investors.
D.commissions.
Q:
The ability of the investor to convert an investment into cash in a short period of time is called:
A.short-term orientation.
B.low investment risk.
C.liquidity.
D.capital appreciation.
E.None of the above
Q:
Which of the following is not one of the considerations in setting investment objectives?
A.Risk versus safety of principal
B.Maximize wealth versus minimize expenses
C.Current income versus capital appreciation
D.Short-term versus long-term orientation
E.Taxes
Q:
What factors must be considered in choosing between investment alternatives?
A.Risk and liquidity
B.Interest or dividends versus capital gains
C.Time frame for managing funds and evaluating performance and tax effects
D.Safety of principal
E.All of the above
Q:
The two components that make up the risk-free rate are:
A.real rate of return and capital gains.
B.risk-free assets and capital gains.
C.real rate of return and the inflation factor.
D.real assets and the inflation factor.
E.capital gains and the inflation factor.
Q:
Investment in a mutual fund results in:
A.an indirect equity claim.
B.a direct equity claim.
C.a creditor claim.
D.None of the above
Q:
____, because of increasing replacement value and scarcity, perform(s) best in periods of high inflation.
A.Real assets
B.Common stock
C.Preferred stock
D.Financial assets
E.More than one of the above
Q:
Every investment requires a total return comprised of a real rate of return, compensation for inflationary expectations, and a risk premium.
Q:
A direct equity claim arises through investment in:
A.bonds and other debt instruments.
B.common stocks, warrants, and options.
C.preferred stock and commodity futures.
D.mutual funds.
E.None of the above
Q:
One of the problems that investors face in determining required rates of return is forecasting errors involving interest rates and inflation.
Q:
Which of the following statements is the most accurate concerning security returns over the eight decades since the 1920s?
A.Returns on large common stocks were very stable.
B.Returns on long-term corporate bonds were very stable.
C.Returns on long-term government bonds were very stable.
D.Returns on treasury bills were very consistent from period to period.
E.All securities exhibited very unstable returns over the eight decades in question.
Q:
Real assets, because of increasing replacement value and scarcity, tend to perform better than financial assets during periods of high inflation.
Q:
When ranking the riskiness of securities using the standard deviation, the highest risk security to the lowest risk security is as follows:
A.Small stocks, large stocks, long-term government bonds, U.S. treasury bills.
B.Long-term government bonds, small stocks, large stocks, U.S. treasury bills.
C.Large stocks, small stocks, long-term government bonds, U.S. treasury bills.
D.Small stocks, long-term government bonds, large stocks, U.S. treasury bills.
E.U.S. treasury bills, long-term government bonds, large stocks, small stocks.
Q:
When ranking security returns, the data shows that the annualized returns are as follows (ranked from highest return to lowest return):
A.Large stocks, small stocks, long-term corporate bonds, long-term government bonds, treasury bills.
B.Small stocks, large stocks, long-term corporate bonds, long-term government bonds, treasury bills.
C.Small stocks, large stocks, treasury bills, long-term government bonds, long-term corporate bonds.
D.Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks.
E.Large stocks, small stocks, long-term government bonds, long-term corporate bonds, treasury bills.
Q:
Liquidity can be measured by the ability of the investor to convert an investment into cash within a relatively long period of time, at its fair book value.
Q:
Research has shown that it is not that difficult to beat the market on a risk-adjusted basis.
Q:
A(n) _____ is a legally documented claim on an asset, while a(n) _____ is an actual, tangible asset which may be seen, felt, held, or collected.
A.Real asset; financial asset
B.Financial asset; real asset
C.Indirect equity claim; direct equity claim
D.Direct equity claim; indirect equity claim
E.None of the above
Q:
The commitment of current funds in anticipation of receiving a larger future flow of funds is called:
A.a financial asset.
B.a real asset.
C.an investment.
D.gambling.
E.None of the above
Q:
Those who attempt to engage in short-term market tactics are termed traders.
Q:
In managing a personal portfolio, an investor should consider opportunity costs.
Q:
When comparing returns by decade, the Ibbotson study shows that small company stocks outperformed large company stocks in every decade since the 1920s.
Q:
The Stocks, Bonds, Bills and Inflation Yearbook is an annual reference book that publishes return data on a variety of securities. The data shows that the large company category had a negative return in only one decade, and that was the 1930s.
Q:
The Tax Relief Act of 2003 has made stocks that pay high dividends more attractive than they previously were.
Q:
The Tax Act of 2001 lowered the capital gains tax rate.
Q:
Retirement questions should be asked 5-10 years before retirement.
Q:
Prior to the Taxpayer Relief Act of 1997, long-term capital gains were taxed at ordinary income tax rates.
Q:
Finding high income (yield) and growth in the same investment is a relatively standard practice.
Q:
Beta measures a security's return relative to the market.