Questions

Chapter 1:   The Role of Financial Management

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1. "Shareholder wealth" in a firm is represented by:

the number of people employed in the firm.

the book value of the firm's assets less the book value of its liabilities.

the amount of salary paid to its employees.

the market price per share of the firm's common stock.

2. The long-run objective of financial management is to:

maximize earnings per share.

maximize the value of the firm's common stock.

maximize return on investment.

maximize market share.

3. What are the earnings per share (EPS) for a company that earned $100,000 last year in after-tax profits, has 200,000 common shares outstanding and $1.2 million in retained earning at the year end?

$100,000

$6.00

$0.50

$6.50

4. A(n)                  would be an example of a principal, while a(n)                  would be an example of an agent.

shareholder; manager

manager; owner

accountant; bondholder

shareholder; bondholder

5. The market price of a share of common stock is determined by:

the board of directors of the firm.

the stock exchange on which the stock is listed.

the president of the company.

individuals buying and selling the stock.

6. The focal point of financial management in a firm is:

the number and types of products or services provided by the firm.

the minimization of the amount of taxes paid by the firm.

the creation of value for shareholders.

the dollars profits earned by the firm.

7. The decision function of financial management can be broken down into the                  decisions.

financing and investment

investment, financing, and asset management

financing and dividend

capital budgeting, cash management, and credit management

8. The controller's responsibilities are primarily                  in nature, while the treasurer's responsibilities are primarily related to                 .

operational; financial management

financial management; accounting

accounting; financial management

financial management; operations

9. In the US, the                  has been given the power to adopt auditing, quality control, ethics, and disclosure standards for public companies and their auditors as well as investigate and discipline those involved.

American Institute of Certified Public Accountants (AICPA)

Financial Accounting Standards Board (FASB)

Public Company Accounting Oversight Board (PCAOB)

Securities and Exchange Commission (SEC)

10. A company's                  is (are) potentially the most effective instrument of good corporate governance.

common stock shareholders

board of directors

top executive officers

11. The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to:

a series of corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and numerous others.

a dramatic rise in the US trade deficit.

charges of excessive compensation to top corporate executives.

rising complaints by investors and security analysts over the financial accounting for stock options.

The following item is NEW to the 13th edition.

12. ___________ refers to meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Corporate Social Responsibility (CSR)

Sustainability

Convergence

Green Economics

Multiple choice questions

This activity contains 29 questions.

Top of Form

strategic planning

target markets

the marketing environment

the marketing mix

none of the above

A company's marketing environment includes various ________ that are made up of groups that have an actual or potential interest in, or impact on, an organization's ability to achieve its objectives.

markets

  audiences

  publics

  intermediaries

  teams

A radio station that carries news, features, and editorial opinions about your area is which type of public?

regional

  local

  financial

  citizen-action

  media

Workers, managers, and members of the board of directors are all part of a company's ________.

intermediary public

  internal public

  general public

  local public

  market public

Research has shown that the most important demographic trend in Europe is the ________.

aging population

  slowing birth rate

  increase in professional jobs

  mobility of people

  changing age structure of the population

Which demographic group has a relatively cautious economic outlook, cares about the environment, and responds favorably to socially responsible companies?

Millennials

  teenagers

  baby boomers

  Generation X

  Generation Y

Which demographic group has created large tween and teen markets?

  the elderly

  Millennials

  baby busters

  Generation X

  baby boomers

Which demographic group is characterized by a total fluency and comfort with computer, digital, and Internet technology?

baby boomers

  Millennials

  the elderly

  Generation X

  Generation Z

Which of the following demographic groups has not seen a percentage increase in the past 50 years?

nontraditional households

  women staying at home with their children

  nonfamily households

  women working outside of the home

  men staying at home with their children

Europeans are very mobile. In the early years of 21st century there was a net migration towards the ________ member states of the EU.

Eastern

  Sunbelt

  Southeastern

  Western

  Northeastern

Over the past 50 years, which of the following groups of workers has become smaller?

service

  telecommuters

  professional

  manual

  restaurant employees

With an expected increase in minority ethnic populations, marketers are likely to place a greater emphasis on ________.

mass marketing

  geographic segmentation

  cause-related marketing

  targeted advertising messages

  mainstream advertising

The diversity segment of ________ is expected to grow as a result of the aging baby boomer population.

Asians

  the LGBT (lesbian, gay, bisexual, and transgender) community

  EU member states residents

  Chinese

  adults with disabilities

A country with a(n) ________ economy consumes most of is own agricultural and industrial outputs and offers few market opportunities.

rural

  technological

  subsistence

  industrial

  service

Which of the following groups of expenses uses up most household income?

food, travel, savings

  food, housing, transportation

  housing, insurance, taxes

  housing, taxes, transportation

  food, housing, retirement planning

The natural resources that are needed as inputs by marketers or that are affected by marketing activities are referred to as the ________.

raw material market

  endangered environment

  factors of production

  green movement

  natural environment

Which of the following represents the most dramatic force shaping a modern marketer's destiny?

the political environment

  the natural environment

  the technological environment

  partnership marketing

  deregulation

Marketers should be aware of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. This is the ________ environment.

socio-legal

  legal-technological

  cultural

  economic

  political

As marketing manager for Laser Industries, you should be aware that legislation affecting business around the world will continue to ________.

threaten the American domestic economy

  exist

  remain steady

  increase

  decrease

The recent rash of business scandals and increased concerns about the environment have created fresh interest in the issues of ________ and ________.

promotion; pricing

  management ethics; insider trading

  finances; employee discrimination

  ethics; promotion responsibility

  ethics; social responsibility

The primary concern with the boom in e-commerce and Internet marketing is ________.

privacy

  theft

  ethics

  pornography

  false advertising

A society's basic values, perceptions, preferences, and behaviors are all part of its ________ environment.

cultural

  cultural-economic

  social

  natural

  political

A society's ________ are expressed in how people view themselves, organizations, society, nature, and the universe.

social codes

  public policies

  economies

  cultural values

  demographics

Marketers can take a(n) ________ by taking positive action to affect the publics and forces in their marketing environments.

environmental perspective

  proactive stance

  natural management perspective

  natural perspective

  relationship building perspective

Currently, Diego Calabresa is employed by a firm that conducts marketing research and creates ads for other companies that help them target and promote their products to the right markets. Who is Diego's employer?

a physical distribution firm

  a reseller

  a financial intermediary

  a green marketer

  a marketing service agency

1. Which of the following terms is used to describe the factors and forces outside marketing that affect marketing management's ability to build and maintain successful relationships with target customers? 

Your Answer:

the marketing environment

2. You are directed to study the factors that are larger societal forces that affect your company–demographic, economic, natural, technological, political, and cultural. What are you studying? 

Your Answer:

the macroenvironment

3. All of the groups within a company are called the ________. 

Your Answer:

internal environment

4. Banks, credit companies, insurance companies, and other businesses that help finance transactions or insure against the risks associated with the buying and selling of goods and services are referred to as ________. 

Your Answer:

financial intermediaries

5. Which type of market buys goods and services for further processing or for use in the production process? 

Your Answer:

business

6. A company's marketing environment includes various ________ that are made up of groups that have an actual or potential interest in, or impact on, an organization's ability to achieve its objectives. 

Your Answer:

publics

7. A radio station that carries news, features, and editorial opinions about your area is which type of public? 

Your Answer:

media

8. Workers, managers, and members of the board of directors are all part of a company's ________. 

Your Answer:

internal public

9. Research has shown that the most important demographic trend in Europe is the ________. 

Your Answer: mobility of people

Correct Answer:

changing age structure of the population

10.

Which demographic group has a relatively cautious economic outlook, cares about the environment, and responds favorably to socially responsible companies? 

Your Answer:

Generation X

11.

Which demographic group has created large tween and teen markets? 

Your Answer:

Millennials

12.

Which demographic group is characterized by a total fluency and comfort with computer, digital, and Internet technology? 

Your Answer: Generation Z

Correct Answer:

Millennials

13 Which of the following demographic groups has not seen

. a percentage increase in the past 50 years? 

Your Answer: men staying at home with their children

Correct Answer:

women staying at home with their children

14.

Europeans are very mobile. In the early years of 21st century there was a net migration towards the ________ member states of the EU. 

Your Answer: Southeastern

Correct Answer:

Western

15.

Over the past 50 years, which of the following groups of workers has become smaller? 

Your Answer:

manual

16.

With an expected increase in minority ethnic populations, marketers are likely to place a greater emphasis on ________. 

Your Answer: geographic segmentation

Correct Answer:

targeted advertising messages

17.

The diversity segment of ________ is expected to grow as a result of the aging baby boomer population. 

Your Answer: Chinese

Correct Answer:

adults with disabilities

18.

A country with a(n) ________ economy consumes most of is own agricultural and industrial outputs and offers few market opportunities. 

Your Answer: rural

Correct Answer:

subsistence

19.

Which of the following groups of expenses uses up most household income? 

Your Answer:

food, housing, transportation

20.

The natural resources that are needed as inputs by marketers or that are affected by marketing activities are referred to as the ________. 

Your Answer: factors of production

Correct Answer:

natural environment

21.

Which of the following represents the most dramatic force shaping a modern marketer's destiny? 

Your Answer:

the technological environment

22.

Marketers should be aware of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society. This is the ________ environment. 

Your Answer:

political

23.

As marketing manager for Laser Industries, you should be aware that legislation affecting business around the world will continue to ________. 

Your Answer: exist

Correct Answer:

increase

24.

The recent rash of business scandals and increased concerns about the environment have created fresh interest in the issues of ________ and ________. 

Your Answer:

ethics; social responsibility

25.

The primary concern with the boom in e-commerce and Internet marketing is ________. 

Your Answer: ethics

Correct Answer:

privacy

26.

A society's basic values, perceptions, preferences, and behaviors are all part of its ________ environment. 

Your Answer:

cultural

27.

A society's ________ are expressed in how people view themselves, organizations, society, nature, and the universe. 

Your Answer:

cultural values

28.

Marketers can take a(n) ________ by taking positive action to affect the publics and forces in their marketing environments. 

Your Answer:

proactive stance

29.

Currently, Diego Calabresa is employed by a firm that conducts marketing research and creates ads for other companies that help them target and promote their products to the right markets. Who is Diego's employer?

Your Answer:

a marketing service agency