Globus Quiz 2 Questions And Answers (Complete Solutions)

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Globus-Quiz-2 1. Which of the following is NOT an action company co-managers can take to help meet or beat the investor-expected increases in the company's stock price in upcoming years? - Making i... t company practice to issue additional shares of stock each year and use the proceeds to pay down the debt outstanding until the company's debt-equity percentages reach 20% or lower for debt and 80% or more for equity - Increasing annual dividend payments to shareholders most every year - Making it a frequent management practice to allocate a portion of internal cash flows from operations to repurchasing shares of the company's common stock - Putting increased attention on boosting operating profits in all four geographic regions -- the resulting growth in operating profits companywide will act to increase total net profits and EPS; higher earnings per share are an important driver of the company's stock price - When the company's stock price drops because of unexpectedly weak company performance in the prior year but is expected to recover and rise in the next several decision rounds. opting to borrow money preferably in the form of 1-year loans from the Global Community Bank (but not so much as to impair the company's credit rating) and using the borrowed funds to repurchase outstanding shares of common stock 2. Which of the following is NOT an action company co-managers can take that has good potential for increasing the company's average ROE and helping the company meet or beat the investorexpected ROE targets in upcoming years? - Pursuing efforts to boost total operating profits in all four geographic regions -- the resulting growth in operating profits companywide will increase total net profits (a company's net profits are the numerator in calculating the company's ROE) - Paying a small annual dividend to shareholders (less than $0.50 per share) which is increased annually by about $0.05 per shares; a small but growing dividend provides the company with more cash to fund capital expenditures and/or pay down bank borrowings ahead of schedule - Using a portion of the company's internal cash flows from operations for the next several years to repurchase shares of common stock - Borrowing money from the Global Community Bank (preferably in the form of a 1-year loan that can be fully or mostly repaid the following year) and using the proceeds to repurchase outstanding shares of common stock: such action makes considerable financial sense when the company's stock price is expected to rise substantially in future years and/or when unexpectedly weak company performance in the prior year causes a drop in its stock price - Increasing annual dividend payments to shareholders (because all net profits not paid out as dividends are treated as retained earnings and because bigger retained earnings have the effect of increasing shareholders equity) 3. Which one of the following is NOT a way to improve the P/Q rating of a company's brand of action-capture cameras? - Adding one or two more extra performance features - Increasing the image sensor size and the resolution of the LCD display screen - Increasing expenditures for camera R&D - Spending several more dollars on the camera housing and on included accessories - Increasing the number of models in the company's lineup of multi-featured cameras 4. If a company pays each camera PAT member a base wage of $21,000, thereby resulting in base wages of $84,000 per 4-person PAT, and if camera PATs work an average of 2,000 hours per year to assemble 3,000 cameras annually, it follows that - the hourly base wage cost for a PAT to assemble a camera would be $30.00 and that the labor cost of assembling a camera at overtime would be $60.00 per PAT. - the hourly base wage cost for a PAT to assemble a camera would be $28.00 and that the labor cost of assembling a camera at overtime would be $42.00 per PAT. - the hourly base wage cost for a PAT to assemble a camera would be $24.00 and that the labor cost of assembling a camera at overtime would be $36.00 per PAT. - the hourly base wage cost for a PAT to assemble a camera would be $10.50 and that the labor cost of assembling a camera at overtime would be $15.75 per PAT. - the hourly base wage cost of assembling a camera would be $28.00 and that the labor cost of assembling a camera at overtime cannot be determined from the available information due to the lack of information about compensation payments for assembly quality incentives. perfect attendance bonuses, and the cost of fringe benefit packages 5. Actions that can lead to higher labor productivity in assembling cameras/drones do NOT include - increasing the annual bonus for perfect attendance paid to cameraidrone PAT members from $800 to $875. - reducing the number of camera/drone models being assembled. - boosting the minimum number of cameras/drones that camera/drone PATs are expected to assemble each week -- such failure to achieve the weekly quota in as many as 4 weeks a year constitutes automatic disqualification for year-end perfect attendance bonuses. - increasing total annual compensation per camera/drone PAT member by a minimum of 2% and a maximum of 5% annually. - increasing annual expenditures to train camera/drone PATs in best practice assembly methods and ways to improve productivity from S2.000 per PAT to $2,250 per PAT 6. The website prices virtually all companies in the industry charge Asia-Pacific buyers for UAV drones are likely to be higher than the website prices they charge UAV drone buyers in North America because the administrative costs per drone sold that companies incur on sales to buyers in the Asia-Pacific region are over $10 higher than those incurred on sales to buyers in North America. because unfavorable exchange rate adjustments are consistently $10 to $30 higher on sales to buyers in the Asia-Pacific region than for buyers in North America. because the corporate profits taxes that all companies have to pay to governments in the Asia-Pacific region are 35% higher on average than the corporate profits companies have to pay governments in North America. when the import duties on shipments of UAV drones to buyers in the Asia-Pacific region are significantly bigger than the import duties on shipments of UAV drones to buyers in North America. because the production/assembly costs per drone that companies incur on UAV drones shipped to the Asia-Pacific region are many dollars higher than production/assembly costs per drone shipped to North America. 7. After each decision round, company managers should make a point of examining the information on p. 2 of the Company Operating Report that concerns the company's profitability in the action camera segment in each geographic region because total operating profits and operating profit margins are very likely to be lower in some regions than others and because management needs to take actions to boost its profitability in the underperforming regions in the upcoming decision round. this report provides the company's management team with convincing documentation of the precise reasons why the company's camera-related operating profits and operating profit margins were bigger in some regions than in others. this report provides superb guidance about how much the company needs to raise/lower its average wholesale camera prices in each geographic region. this report provides superb documentation about whether the company spent too much or too little in each region on advertising, retailer support, and website product displays/info in the just-completed decision round. the information in this report allows managers to see in which regions the company was most competitively successful and least competitively successful, competitive factor by competitive factor. 8. Which one of the following actions helps boost a company's image rating/brand reputation? Using environmentally friendly camera components and recycled materials for manuals and packaging for the company's action cameras Charging camera retailers an average wholesale price that is typically 10% or more below the highest price being charged in the region Paying camera/drone PAT members attractively high total annual compensation packages. thereby enabling them to enjoy a standard of living well above the Taiwan average Making it standard practice for the company to offer all buyers of its camera and drones a full 1-year warranty Increasing the PIQ rating of the company's UAV drones 9. Which of the following combinations of actions will likely provide the LEAST competitive benefits in helping a company catch the eye of action camera shoppers. significantly boost overall buyer appeal for its cameras versus rival brands, and cause more camera shoppers to purchase its brand instead of rival brands in each of the four geographic regions? Increasing expenditures for website product displays/info $100,000 in all four regions and increasing advertising expenditures by $250,000 in all four regions Increasing the warranty period from 90 days in each region to 180 days in each region and increasing the number of camera models from 4 to 6 Boosting spending for retailer support by $500,000 in all four geographic regions and instituting $7 reductions in the average wholesale prices charged to camera retailers in each geographic region Boosting its P/Q rating from 5.5 stars to 6.3 stars and increasing spending for advertising from levels that are $1,000,000 above the prior-year regional averages to levels about $3,000,000 above the prior-year regional averages in all four geographic regions. Boosting the number of weekly sales promotion from 4 to 7 in all four regions and also increasing the percentage discounts to camera retailers during these promotions from 11% to 15% 10. If a company earns net income of $40 million in Year 8, has 10 million shares of common stock outstanding, pays a dividend of $1.00 per share, and has annual interest costs of $10 million, then the company would have Year 8 earnings per share of $3.00 and retained earnings of $20 million. the company's EPS for Year 8 would be $2.00, its dividend payout for Year 8 would equal 25% of net income, and its cash flow from operations would be $20 million (net income of $40 million less dividend payments of $10 million less interest costs of $10 million). the company's retained earnings for the year would be $30 million: the $30 million in retained earnings would be shown on the company's balance sheet as a reduction in equity investment by stockholders in Year 9. the company's EPS for Year 8 would be $4.00 and its retained earnings for Year 8 would be $30 million (net income of $40 million less dividend payments of $10 million); the $30 million addition to retained earnings would cause shareholders' equity investment to increase by $30 million in Year 8. the company's retained earnings for the year would be $20 million (net income of $40 million less dividend payments of $10 million less interest costs of $10 million) and its earnings per share would be $2.00. 11. Which one of the following is NEITHER an advantage or disadvantage of shifting to roboticsassisted camera assembly methods? The capital cost of converting to robot-assisted camera assembly can increase a company's interest costs, to the extent that a portion of the capital costs are financed by bank loans. Robot-assisted camera assembly boosts the annual productivity of camera PATs by 500 cameras per year. Installing robots at each camera workstation enables the size of PATs to be cut from 4 members to 3 members. Robot-assisted assembly reduces total annual compensation costs per PAT and also reduces the overtime cost of assembling a camera. Robot-assisted camera assembly increases annual workstation maintenance costs fals12. The industry-low, industry-average, and industry-high cost benchmarks on pp. 6-7 of each issue of the Camera & Drone Journal have the greatest value to the managers of companies whose camera costs per unit and drone costs per unit are above the industry averages. are of little value to company managers in making decisions to improve company performance in the upcoming decision round. except in those cases when a company is losing money in one or more geographic regions. are particularly valuable to company managers who are actively considering undertaking robotics upgrades in their camera and drone assembly facilities in the upcoming decision round. are of considerable value to the managers of companies selling low-cost/low-price action cameras and/or UAV drones but are of very limited value to the managers of all other companies. are worth careful scrutiny by the managers of all companies because they help managers determine if corrective actions are needed in the event their company's camera/drone costs for the benchmarked cost categories do NOT appear to be competitive (or "in line") with those of rival companies. 13. If a company adds 60 new workstations at a cost of $75,000 each and also spends $20 million for addition space in its camera/drone assembly facilities to accommodate more workstations, then its annual depreciation costs will rise by $24,500,000 $1,750,000. $3,500.000. $980,000. • $1,225,000. 14. Which of the following is NOT an action that can help boost a company's credit rating? In answering this question, you may wish to consult the Help section for page 5 of the Camera & Drone Journal and read the discussion pertaining to "The Credit Rating Measures." • Repurchase shares of the company's common stock to enhance the company's debtto-equity percentagesw Put increased attention on boosting operating profits and operating profit margins in all four geographic regions -- the resulting growth in operating profits companywide will increase the company's interest coverage ratio Issue additional shares of stock and use the proceeds to pay down 5-year and 10-year loans Pay off any 1-year loans (and temporarily avoid the use of 1-year loans) because 1-year loans are considered a current liability and thus reduce the company's current ratio Temporarily reduce dividend payments to shareholders and use the cash saved from lower dividend payments to pay down 5-year and 10-year loans 15. The benefits of pursuing a strategy of social responsibility and corporate citizenship include the positive impact that such a strategy has on the company's PiQ ratings for both action cameras and UAV drones the boost such a strategy gives to increasing the company's global sales volume and global market share for both action cameras and UAV drones. the enhanced profitability that results when a company opts to spend money on socially responsible activities. • the positive impact that such a strategy can have on the company's image rating if the company spends a meaningful amount on socially responsible activities over a multiyear period. the boost such a strategy gives to the company's stock price. 16. Which one of the following represent the MOST important/helpful results from the latest decision round that company managers need to review/study in order to guide their strategic moves and decisions to improve their company's competitiveness and overall company performance in the upcoming decision round? Each company's performance on EPS, ROE, stock price, credit rating and image rating displayed on pages 2 and 3 of the Camera & Drone Journal. The comparative competitive efforts of rival companies in each geographic region are found in Competitive Intelligence Report. The Industry Scoreboard data on p.1 of the Camera & Drone Journal. The Industry Overview information on p. 4 of the Camera & Drone Journal. The company's Income Statement on p. 4 of the Company Operating Report. 17. Which one of the following actions helps increase a company's EPS? Minimizing the company's dividend payments so as to boost retained earnings--higher retained earnings divided by the number of shares outstanding result in higher EPS Issuing enough additional shares of stock to raise sufficient cash to pay off all of the company's outstanding loans: cutting interest costs to zero can always be counted on to boost the company's EPS Striving to be the dominant seller of action cameras and UAV drones in all four geographic regions every year by having the highest P/Q ratings and out-marketing rivals: the added profits on large volume sales will drive increases of 10% or more in EPS Cutting the company's selling prices for both action cameras and UAV drones in all four regions to levels at least 5% below those being charged by any company: the resulting increases in sales volumes and revenues will boost the company's EPS Allocating a portion of the company's net income each year to repurchasing shares of the company's common stock 18. A company's managers should give serious consideration to changing from a low-cost/low price strategy for action cameras to a different strategy in the 4 regional markets for action cameras when • all or most of the regional markets are so crowded with companies that are using mostly copycat competitive approaches to selling low-priced cameras to pricesensitive, bargain-hunting buyers that it is difficult for any of these companies to capture sales volumes and revenues big enough to earn profits large enough to meet investor-expected EPS, ROE, and stock price appreciation targets. a big fraction of the companies in the industry are marketing 5 or more models of action cameras with a P/Q rating of 6-stars or higher and selling them at average wholesale prices that are more than $30 above the regional averages. the company's operating profits per action camera sold are not substantially above the industry-average benchmarks in at least three geographic regions (as reported on p. 6 of the most recent Camera & Drone Journal). the company's market share for action cameras has not been the largest in all four geographic regions for two straight years and when its EPS and ROE have also not been the highest in the industry for two straight years. most of the company's low-cost/low-price rivals are offering buyers a 180-day warranty and are spending above-average amounts on advertising in all four geographic regions. 19. If your company earns an ROE of 20% at a time when the investor-expected ROE target is 25% and if the instructor-determined weight for achieving the ROE target is worth 20 points, then your company's ROE score on the Investor Expectations scoring standard will be 17 points 15 points (75% of the 20 points awarded for meeting the ROE target) 18 points 16 points (80% of the 20 points awarded for meeting the ROE target) 20 points (1 point for each 1% the company earned on total shareholders' equity) 20. Which one of the following is NOT an attractive way to reduce the design, assembly, marketing, and other costs per action-capture camera sold in an effort to achieve a sizable low-cost competitive advantage over rivals? Striving to keeping marketing costs per camera sold in all 4 geographic regions sold to levels that are below the industry-average benchmark and. better still close to the industry-low benchmark (as reported on p. 6 of the Camera& Drone Journal) Spending aggressively (but also taking care not to overspend) on camera product R&D Doing whatever it takes to entirely avoid any use of overtime in assembling cameras because paying PAT members 1.5 times the hourly base wage to assemble cameras at overtime is much too expensive. Paying PAT members an attractive assembly quality incentive to help reduce warranty claims on cameras sold and also boost PAT productivity Trying different combinations of components, product enhancements. and extra performance features to be used in action cameras in order to discover the lowest cost combination for achieving a competitively appealing P/Q rating 1. Which one of the following is NOT a way to improve the P/Q rating of a company's brand of UAV drones? Decreasing the number of models in the company's line-up from 2 to 1 Improving the battery pack to permit more minutes of flying time on a single charge Offering all buyers of the company's UAV drones a full day of flight training at a nearby independently-operated drone flight training center for a modest extra $50 charge Increasing the number of rotors Improving the caliber and functionality of the camera stabilization device (so that video quality is not so adversely affected by strong wind conditions) 2. to be an attractive and effective way to reduce the design, assembly. marketing, and other costs of UAV drones and help achieve a sizable competitive advantage over rival companies based on lower overall costs per UAV drone sold? Trying out numerous different combinations of design components, performance enhancements, and extra performance features to be used in the company's UAV drones in order to discover the lowest cost combination for achieving a competitively appealing P/Q rating Spending only modest amounts annually for Corporate Social Responsibility and Citizenship initiatives Switching to robot-assisted assembly methods to lower labor costs per drone assembled Designing, assembling, and selling UAV drones having a P/Q rating of 0.5 stars Trying to keep the warranty period to 60 days or 90 days (but no more than 120 days), if it is competitively feasible to do so 3. Which one of the following actions is MOST likely to REDUCE the productivity of camera/drone PATs? Failing to have a total annual compensation package for camera/drone PAT members that is at least equal to the prior-year industry-average compensation level Boosting the annual base wage of camera/drone PAT members by only 2% in any given year Not raising the annual bonus for perfect attendance for a period of 3 years Cutting the number of camera models being assembled from 4 models to 3 models and the number of drone models being assembled from 3 models to 2 models Decreasing the size of the assembly quality incentive for cameras to a maximum of $0.40 and the assembly quality incentive for drones to a maximum of $1.00 4. 11Which of the following is an action that merits serious consideration in trying to improve a company's credit rating? In answering this question, you may wish to consult the Help section for page 5 of the Camera & Drone Journal and read the discussion pertaining to The Credit Rating Measures." Avoid all use of overtime in assembling cameras and drones Do not increase the compensation paid to PAT members (until the desired credit rating is achieved)--this will help keep production costs for both cameras and drones from rising Issue additional shares of common stock and use the proceeds to pay off bank loans, thereby immediately improving the company's debt-equity percentages Cut the prices the company charges for both cameras and drones in all four geographic regions by at least 10% in order to improve the company's EPS, ROE, and stock price Increase the size of the company's dividend payments to stockholders--this helps reduce the amount of retained earnings on the company's balance sheet (which in turn helps increase the company's interest coverage ratio) 5. As a general rule, it is important for company managers to be aware of the regions where the company's UAV drone business was most profitable and least profitable in the just-completed decision round (so they can pursue corrective actions in the underperforming regions in the upcoming decision round); the best information, then the best place(s) to look for this information is page 1 of the Company Operating Report showing "Assembly and Facilities Operations." the top section of page 5 of the Camera & Drone Journal. the benchmarking data for operating profits and operating profit margins on p. 7 of the Camera & Drone Journal and the region-by-region breakdowns of drone net sales revenues, costs, total operating profits, and operating profit margins displayed on page 3 of the Company Operating Report. on page 3 of the Company Operating Report there are page 4 of the Company Operating Report showing the company's financial statements and selected financial statistics. in the 4-page section of the Competitive Intelligence Report that shows the comparative competitive efforts of rival companies for each region. 6. should almost always give serious consideration to making significant adjustments in its camera/drone strategies and competitive approaches when the company has been unsuccessful in achieving the investor-expected targets for EPS, ROE, and stock price appreciation in the prior decision round and certainly if it has been unsuccessful for the past two decision rounds. the number of camera and drone workstations the company has installed is NOT well above the industry-averages (as reported on pages 6 and 7 of the most recent Camera & Drone Journal). several rival companies are charging prices below the regional averages in all four regions for cameras and drones with a four-star or lower P/Q rating. the company's total production/assembly costs for both action cameras and UAV drones are above the industry averages (as reported on pages 6 and 7 of the latest issue of the Camera & Drone Journal). its sales and market shares for cameras and drones are below the industry averages in as many as two geographic regions. 7. The makers of action-capture cameras have good reason to sell their camera models to camera retailers in Europe-Africa at lower average wholesale prices than the average wholesale prices charged to camera retailers in Latin America because the costs of shipping AC cameras from Taiwan to camera retailers in Europe-Africa are $2 lower per camera than the costs of shipping AC cameras from Taiwan to retailers in Latin America. annual interest rates on bank loans in the Europe-Africa region are 1%-2% lower than interest rates on bank loans in Latin America. the administrative costs per camera sold that camera-makers incur on sales to camera retailers in Europe-Africa are about S4 lower than those incurred on sales to camera retailers in Latin America. the warranty repair costs for cameras all companies have to pay in the Europe-Africa region are $10 lower than in Latin America. they incur lower import duties per action camera sold/shipped to camera retailers in Europe-Africa than the import duties they have to pay on each action camera sold/ shipped to camera retailers in Latin America. 8. Which of the following actions does NOT help improve a company's image rating/brand reputation? Successfully increasing its global market share of worldwide action-capture camera sales Building a widely recognized reputation for paying camera/drone PAT members the biggest total annual compensation package of any company in the industry Increasing the company's P/Q ratings of both action cameras and UAV drones Successfully increasing its global market share of worldwide UAV drone sales Spending sizable sums of money for multiple social responsibility initiatives and good corporate citizenship over a multi-year period 9. If a company adds 40 new workstations at a cost of $75,000 each and also spends $14 million for addition space in its camera/drone assembly facilities to accommodate more workstations, then its annual depreciation costs will rise by 10% of the capital cost or $1.700,000. 5% of the capital cost or $850,000. 4% of the capital cost or $680,000. S560,000. S17 million. 10. Which of the following actions are most likely to catch the eye of action camera shoppers, generate the biggest boost in overall buyer appeal for a company's camera models versus rival brands. and cause the biggest number of additional camera shoppers to purchase its brand instead of rival brands? Boosting merchandising support to camera retailers stocking the company's brand by 15% Reducing average wholesale prices to camera retailers by $5 in all four geographic regions Increasing the annual number of weekly sales promotion campaigns from 2 to 3 and also increasing the discount to camera retailers during these weekly promotions by 1% Boosting the number of camera models from 3 to 4 while also keeping the company P/Q rating at the same star rating Raising the P/Q rating on the company's camera models from 4.2 stars to 4.9 stars and only increasing the average wholesale prices to retailers by $4 in all four regions 11. Which of the following results from the latest decision round are LEAST important in providing guidance to company managers in making their strategic moves and decisions to improve their company's competitiveness and rank among the top-performing companies in the upcoming decision round? The information concerning the company's market segment performance for both action cameras and UAV drones found on pages 2 and 3 of the Company Operating Report The comparative competitive efforts of rival companies in each geographic region that are found in Competitive Intelligence Report Each company's performance on EPS, ROE. stock price. credit rating. and image rating displayed on the pp. 2 and 3 of the Camera & Drone Journal The industry-low, industry-average, and industry-high benchmarks on pp. 6-7 of each issue of the Camera & Drone Journal The balance sheet data in the middle section of page 5 of the Camera & Drone Journal 12. If your company earns $3.00 per share of common stock (in a year when the investor-expected EPS target is $3.60), if another company has an industry-leading EPS of S5.00, and if EPS has a scoring weight of 20 points, then your company's EPS score on the Best-in-Industry scoring standard will be 11 points 17 points (83.3% of the 20 points awarded for meeting the EPS target) 10 points 12 points 15 points 13. The industry-low. industry-average. and industry-high benchmarks on pp. 6-7 of each issue of the Camera & Drone Journal are of little value to company managers in making decisions to improve company performance in the upcoming decision round because the benchmarking data do not identify which particular companies have the lowest/highest costs and operating profits in each geographic region. are most valuable to the managers of companies whose costs are close to the industry-low values and to the managers of companies whose operating profits and operating profit margins are at or close to the industry-high benchmarks. are worth careful scrutiny by the managers of all companies because when the camera/drone benchmarking data signals that a company's costs/operating profits for one or more of the benchmarks are clearly out-of-line (or unappealing), managers are well advised to take corrective action in the upcoming decision round. have the greatest value to the managers of companies that have negative operating profit per camera sold in one of more geographic regions because their marketing andlor administrative expenses per camera sold are too far above the industry averages. are of considerable value to the managers of companies pursuing a low-cost strategy but are of very limited value to managers of companies pursuing all other types of strategies to outcompete and outperform rival companies. 14. Which of the following is an action company co-managers can take that will help the company meet or beat the investor-expected ROE targets in upcoming years? Making it standard practice to issue more shares of common stock to fund all capital expenditures for camera/drone workstation space, the installation of additional camera/drone workstations, and any robotics upgrades that company co-managers decide to undertake Not paying an annual dividend to shareholders or else paying only a small portion of net profits (say less than 15%) to shareholders in the form of an annual dividend because retaining more earnings in the business makes it easier to meet the higher ROE targets expected by investors Frequently increasing annual dividend payments to shareholders, perhaps reaching a dividend payout ratio of 30% to 50% (or more) in years 11-15: retaining a smaller fraction of earnings for use in the company's camera/drone business makes it easier for the company to achieve the higher ROE targets expected by investors. Making it standard practice to use a combination of internal cash flows from operations and new issues of common stock to finance the company's growth and new capital investments in assembling action cameras and UAV drones. Financing the installation of additional camera/drone workstations, and any robotics upgrades that company co-managers decide to undertake with a combination of 50% debt (1-year, 5- year, and/or 10-year bank loans) and 50% proceeds from the issue of additional shares of common stock 15. Which one of the following is NEITHER an advantage or disadvantage of shifting to roboticsassisted camera assembly methods? Installing robots at each camera workstation enables the size of PATs to be cut by one member. The capital cost of converting to robot-assisted camera assembly results in higher annual depreciation costs in producing/assembling cameras. Robotics-assisted assembly increases workstation maintenance costs from $10,000 annually per camera workstation to $25,000 annually per camera workstation. Robot-assisted camera assembly reduces total annual compensation costs per camera PAT. If borrowing is used to partly or wholly finance the cash outlays required to pay for robotics upgrades, the company will incur higher interest costs until the borrowed funds are repaid. 16. As explained in the Help section for the Workforce Compensation, Training, and Product Assembly decision screen, if (1) a company pays a drone PAT member an annual base wage of $25.000, an $800 year-end bonus for perfect attendance, and provides a company-paid annual fringe benefits package worth $3,600 and (2) a PAT is paid a $4 assembly quality incentive per UAV drone assembled that is equally divided among 4 PAT members, then if a drone PAT's productivity is 1500 drones per year the total compensation cost per drone assembled would be $82.40. the total compensation cost per drone assembled would be $41.20. the total compensation cost per drone assembled would be $37.33. the total compensation cost per drone assembled would be $78.67. the total compensation cost per drone assembled would be $42.00 17. One of the benefits of pursuing a strategy of social responsibility and corporate citizenship that involves spending sizable sums of money for social responsibility initiatives and good corporate citizenship over a multi-year period is greater ease in achieving the investor-expected performance targets for EPS, ROE, and stock price, provided a company wins one or more Gold Star Awards for Corporate Citizenship. a higher image rating. increased power and effectiveness of a company's advertising expenditures for action cameras in all four regions in those years when the company's total annual spending for socially responsible activities exceeds the industry average (as reported on p. 3 of the Camera & Drone Journal. increased company ability to charge higher prices for its action cameras and UAV drones (because of widespread public enthusiasm for the company's social responsibility initiatives). increased global sales volume and global market share of action cameras. provided as much as 20% of company's advertising expenditures in each geographic region are devoted to media ads informing the general public about all of the socially responsible activities being undertaken. 18. If a company earns net income of S55 million in Year 8, has 10 million shares of common stock outstanding, pays a dividend of $1.50 per share, and has annual interest costs of $15 million, then the company's credit rating would be at least a B+ because dividend payments are equal to annual interest costs. the company's EPS for Year 8 would be $2 50 (net income of $55 million less dividend payments of $15 million less S15 million in interest payments = $25 million divided by 10 million shares). the company's credit rating would be no less than an A because net income is more than three times higher than annual interest costs. the company's EPS for Year 8 would be $4.00 (net income of $55 million less dividend payments of $15 million = $40 million divided by 10 million shares). the company's EPS for Year 8 would be $5.50 and Its retained earnings for Year 8 would be $40 million (net income of $55 million less dividend payments of $15 million). 19. If company co-managers wish :o pursue efforts aimed specifically at helping the company meet or beat the investor-expected stock price appreciation targets in upcoming years, then comanagers should consider issuing new shares of common stock to help fund needed capital investment expenditures in those decision rounds when internal cash flows are insufficient to cover all the expenditures on capital investment projects management has decided to undertake. actions to boost the company's net income and EPS, increase annual dividend payments to shareholders, and regularly allocate a portion of internal cash flows to repurchasing shares of the company's common stock. outspending rivals on corporate social responsibility initiatives and charitable contributions, so as to convince civic-minded investors to purchase shares of the company's stock and thus help drive up the stock price. boosting the amount of earnings retained in the business, thereby increasing the hoard of cash held in the company's retained earnings account on its Balance Sheet. issuing additional shares of common stock and using the proceeds to pay off all bank loans and then further issuing shares of stock as may be needed to help finance capital expenditures for additional workstation space, new workstations, and possibly robotics upgrades so as to completely avoid the use of debt-financing. 20. A company's EPS can most always be bolstered by managerial actions to offer more camera/drone models to buyers than rivals: 7 models is ideal. spend at least $1 million to $3 million more on various kinds of marketing efforts than any other company in all four regions: the resulting annual increases in camera/drone sales volumes, revenues, and profits will normally boost the company's EPS. offer 1-year warranties on the company's cameras/drones. achieve an A+ credit rating--the resulting lower interest rates on borrowings help drive increases in EPS allocate significant cash flows from operations to repurchasing shares of common stock, ideally most every year. Which of the following is NOT an action company co-managers can take to help meet or beat the investor-expected increases in the company's stock price in upcoming years? - Making it company practice to issue additional shares of stock each year and use the proceeds to pay down the debt outstanding until the company's debt-equity percentages reach 20% or lower for debt and 80% or more for equity - Increasing annual dividend payments to shareholders most every year - Making it a frequent management practice to allocate a portion of internal cash flows from operations to repurchasing shares of the company's common stock - Putting increased attention on boosting operating profits in all four geographic regions -- the resulting growth in operating profits companywide will act to increase total net profits and EPS; higher earnings per share are an important driver of the company's stock price - When the company's stock price drops because of unexpectedly weak company performance in the prior year but is expected to recover and rise in the next several decision rounds. opting to borrow money preferably in the form of 1-year loans from the Global Community Bank (but not so much as to impair the company's credit rating) and using the borrowed funds to repurchase outstanding shares of common stock 2. Which of the following is NOT an action company co-managers can take that has good potential for increasing the company's average ROE and helping the company meet or beat the investorexpected ROE targets in upcoming years? - Pursuing efforts to boost total operating profits in all four geographic regions -- the resulting growth in operating profits companywide will increase total net profits (a company's net profits are the numerator in calculating the company's ROE) - Paying a small annual dividend to shareholders (less than $0.50 per share) which is increased annually by about $0.05 per shares; a small but growing dividend provides the company with more cash to fund capital expenditures and/or pay down bank borrowings ahead of schedule - Using a portion of the company's internal cash flows from operations for the next several years to repurchase shares of common stock - Borrowing money from the Global Community Bank (preferably in the form of a 1-year loan that can be fully or mostly repaid the following year) and using the proceeds to repurchase outstanding shares of common stock: such action makes considerable financial sense when the company's stock price is expected to rise substantially in future years and/or when unexpectedly weak company performance in the prior year causes a drop in its stock price - Increasing annual dividend payments to shareholders (because all net profits not paid out as dividends are treated as retained earnings and because bigger retained earnings have the effect of increasing shareholders equity) 3. Which one of the following is NOT a way to improve the P/Q rating of a company's brand of action-capture cameras? - Adding one or two more extra performance features - Increasing the image sensor size and the resolution of the LCD display screen - Increasing expenditures for camera R&D - Spending several more dollars on the camera housing and on included accessories - Increasing the number of models in the company's lineup of multi-featured cameras 4. If a company pays each camera PAT member a base wage of $21,000, thereby resulting in base wages of $84,000 per 4-person PAT, and if camera PATs work an average of 2,000 hours per year to assemble 3,000 cameras annually, it follows that - the hourly base wage cost for a PAT to assemble a camera would be $30.00 and that the labor cost of assembling a camera at overtime would be $60.00 per PAT. - the hourly base wage cost for a PAT to assemble a camera would be $28.00 and that the labor cost of assembling a camera at overtime would be $42.00 per PAT. - the hourly base wage cost for a PAT to assemble a camera would be $24.00 and that the labor cost of assembling a camera at overtime would be $36.00 per PAT. - the hourly base wage cost for a PAT to assemble a camera would be $10.50 and that the labor cost of assembling a camera at overtime would be $15.75 per PAT. - the hourly base wage cost of assembling a camera would be $28.00 and that the labor cost of assembling a camera at overtime cannot be determined from the available information due to the lack of information about compensation payments for assembly quality incentives. perfect attendance bonuses, and the cost of fringe benefit packages 5. Actions that can lead to higher labor productivity in assembling cameras/drones do NOT include - increasing the annual bonus for perfect attendance paid to cameraidrone PAT members from $800 to $875. - reducing the number of camera/drone models being assembled. - boosting the minimum number of cameras/drones that camera/drone PATs are expected to assemble each week -- such failure to achieve the weekly quota in as many as 4 weeks a year constitutes automatic disqualification for year-end perfect attendance bonuses. - increasing total annual compensation per camera/drone PAT member by a minimum of 2% and a maximum of 5% annually. - increasing annual expenditures to train camera/drone PATs in best practice assembly methods and ways to improve productivity from S2.000 per PAT to $2,250 per PAT 6. The website prices virtually all companies in the industry charge Asia-Pacific buyers for UAV drones are likely to be higher than the website prices they charge UAV drone buyers in North America because the administrative costs per drone sold that companies incur on sales to buyers in the Asia-Pacific region are over $10 higher than those incurred on sales to buyers in North America. because unfavorable exchange rate adjustments are consistently $10 to $30 higher on sales to buyers in the Asia-Pacific region than for buyers in North America. because the corporate profits taxes that all companies have to pay to governments in the Asia-Pacific region are 35% higher on average than the corporate profits companies have to pay governments in North America. when the import duties on shipments of UAV drones to buyers in the Asia-Pacific region are significantly bigger than the import duties on shipments of UAV drones to buyers in North America. because the production/assembly costs per drone that companies incur on UAV drones shipped to the Asia-Pacific region are many dollars higher than production/assembly costs per drone shipped to North America. 7. After each decision round, company managers should make a point of examining the information on p. 2 of the Company Operating Report that concerns the company's profitability in the action camera segment in each geographic region because total operating profits and operating profit margins are very likely to be lower in some regions than others and because management needs to take actions to boost its profitability in the underperforming regions in the upcoming decision round. this report provides the company's management team with convincing documentation of the precise reasons why the company's camera-related operating profits and operating profit margins were bigger in some regions than in others. this report provides superb guidance about how much the company needs to raise/lower its average wholesale camera prices in each geographic region. this report provides superb documentation about whether the company spent too much or too little in each region on advertising, retailer support, and website product displays/info in the just-completed decision round. the information in this report allows managers to see in which regions the company was most competitively successful and least competitively successful, competitive factor by competitive factor. 8. Which one of the following actions helps boost a company's image rating/brand reputation? Using environmentally friendly camera components and recycled materials for manuals and packaging for the company's action cameras Charging camera retailers an average wholesale price that is typically 10% or more below the highest price being charged in the region Paying camera/drone PAT members attractively high total annual compensation packages. thereby enabling them to enjoy a standard of living well above the Taiwan average Making it standard practice for the company to offer all buyers of its camera and drones a full 1-year warranty Increasing the PIQ rating of the company's UAV drones 9. Which of the following combinations of actions will likely provide the LEAST competitive benefits in helping a company catch the eye of action camera shoppers. significantly boost overall buyer appeal for its cameras versus rival brands, and cause more camera shoppers to purchase its brand instead of rival brands in each of the four geographic regions? Increasing expenditures for website product displays/info $100,000 in all four regions and increasing advertising expenditures by $250,000 in all four regions Increasing the warranty period from 90 days in each region to 180 days in each region and increasing the number of camera models from 4 to 6 Boosting spending for retailer support by $500,000 in all four geographic regions and instituting $7 reductions in the average wholesale prices charged to camera retailers in each geographic region Boosting its P/Q rating from 5.5 stars to 6.3 stars and increasing spending for advertising from levels that are $1,000,000 above the prior-year regional averages to levels about $3,000,000 above the prior-year regional averages in all four geographic regions. Boosting the number of weekly sales promotion from 4 to 7 in all four regions and also increasing the percentage discounts to camera retailers during these promotions from 11% to 15% 10. If a company earns net income of $40 million in Year 8, has 10 million shares of common stock outstanding, pays a dividend of $1.00 per share, and has annual interest costs of $10 million, then the company would have Year 8 earnings per share of $3.00 and retained earnings of $20 million. the company's EPS for Year 8 would be $2.00, its dividend payout for Year 8 would equal 25% of net income, and its cash flow from operations would be $20 million (net income of $40 million less dividend payments of $10 million less interest costs of $10 million). the company's retained earnings for the year would be $30 million: the $30 million in retained earnings would be shown on the company's balance sheet as a reduction in equity investment by stockholders in Year 9. the company's EPS for Year 8 would be $4.00 and its retained earnings for Year 8 would be $30 million (net income of $40 million less dividend payments of $10 million); the $30 million addition to retained earnings would cause shareholders' equity investment to increase by $30 million in Year 8. the company's retained earnings for the year would be $20 million (net income of $40 million less dividend payments of $10 million less interest costs of $10 million) and its earnings per share would be $2.00. 11. Which one of the following is NEITHER an advantage or disadvantage of shifting to roboticsassisted camera assembly methods? The capital cost of converting to robot-assisted camera assembly can increase a company's interest costs, to the extent that a portion of the capital costs are financed by bank loans. Robot-assisted camera assembly boosts the annual productivity of camera PATs by 500 cameras per year. Installing robots at each camera workstation enables the size of PATs to be cut from 4 members to 3 members. Robot-assisted assembly reduces total annual compensation costs per PAT and also reduces the overtime cost of assembling a camera. Robot-assisted camera assembly increases annual workstation maintenance costs 12. The industry-low, industry-average, and industry-high cost benchmarks on pp. 6-7 of each issue of the Camera & Drone Journal have the greatest value to the managers of companies whose camera costs per unit and drone costs per unit are above the industry averages. are of little value to company managers in making decisions to improve company performance in the upcoming decision round. except in those cases when a company is losing money in one or more geographic regions. are particularly valuable to company managers who are actively considering undertaking robotics upgrades in their camera and drone assembly facilities in the upcoming decision round. are of considerable value to the managers of companies selling low-cost/low-price action cameras and/or UAV drones but are of very limited value to the managers of all other companies. are worth careful scrutiny by the managers of all companies because they help managers determine if corrective actions are needed in the event their company's camera/drone costs for the benchmarked cost categories do NOT appear to be competitive (or "in line") with those of rival companies. 13. If a company adds 60 new workstations at a cost of $75,000 each and also spends $20 million for addition space in its camera/drone assembly facilities to accommodate more workstations, then its annual depreciation costs will rise by $24,500,000 $1,750,000. $3,500.000. $980,000. • $1,225,000. 14. Which of the following is NOT an action that can help boost a company's credit rating? In answering this question, you may wish to consult the Help section for page 5 of the Camera & Drone Journal and read the discussion pertaining to "The Credit Rating Measures." • Repurchase shares of the company's common stock to enhance the company's debtto-equity percentages Put increased attention on boosting operating profits and operating profit margins in all four geographic regions -- the resulting growth in operating profits companywide will increase the company's interest coverage ratio Issue additional shares of stock and use the proceeds to pay down 5-year and 10-year loans Pay off any 1-year loans (and temporarily avoid the use of 1-year loans) because 1-year loans are considered a current liability and thus reduce the company's current ratio Temporarily reduce dividend payments to shareholders and use the cash saved from lower dividend payments to pay down 5-year and 10-year loans 15. The benefits of pursuing a strategy of social responsibility and corporate citizenship include the positive impact that such a strategy has on the company's PiQ ratings for both action cameras and UAV drones the boost such a strategy gives to increasing the company's global sales volume and global market share for both action cameras and UAV drones. the enhanced profitability that results when a company opts to spend money on socially responsible activities. • the positive impact that such a strategy can have on the company's image rating if the company spends a meaningful amount on socially responsible activities over a multiyear period. the boost such a strategy gives to the company's stock price. 16. Which one of the following represent the MOST important/helpful results from the latest decision round that company managers need to review/study in order to guide their strategic moves and decisions to improve their company's competitiveness and overall company performance in the upcoming decision round? Each company's performance on EPS, ROE, stock price, credit rating and image rating displayed on pages 2 and 3 of the Camera & Drone Journal. The comparative competitive efforts of rival companies in each geographic region are found in Competitive Intelligence Report. The Industry Scoreboard data on p.1 of the Camera & Drone Journal. The Industry Overview information on p. 4 of the Camera & Drone Journal. The company's Income Statement on p. 4 of the Company Operating Report. 17. Which one of the following actions helps increase a company's EPS? Minimizing the company's dividend payments so as to boost retained earnings--higher retained earnings divided by the number of shares outstanding result in higher EPS Issuing enough additional shares of stock to raise sufficient cash to pay off all of the company's outstanding loans: cutting interest costs to zero can always be counted on to boost the company's EPS Striving to be the dominant seller of action cameras and UAV drones in all four geographic regions every year by having the highest P/Q ratings and out-marketing rivals: the added profits on large volume sales will drive increases of 10% or more in EPS Cutting the company's selling prices for both action cameras and UAV drones in all four regions to levels at least 5% below those being charged by any company: the resulting increases in sales volumes and revenues will boost the company's EPS Allocating a portion of the company's net income each year to repurchasing shares of the company's common stock 18. A company's managers should give serious consideration to changing from a low-cost/low price strategy for action cameras to a different strategy in the 4 regional markets for action cameras when • all or most of the regional markets are so crowded with companies that are using mostly copycat competitive approaches to selling low-priced cameras to pricesensitive, bargain-hunting buyers that it is difficult for any of these companies to capture sales volumes and revenues big enough to earn profits large enough to meet investor-expected EPS, ROE, and stock price appreciation targets. a big fraction of the companies in the industry are marketing 5 or more models of action cameras with a P/Q rating of 6-stars or higher and selling them at average wholesale prices that are more than $30 above the regional averages. the company's operating profits per action camera sold are not substantially above the industry-average benchmarks in at least three geographic regions (as reported on p. 6 of the most recent Camera & Drone Journal). the company's market share for action cameras has not been the largest in all four geographic regions for two straight years and when its EPS and ROE have also not been the highest in the industry for two straight years. most of the company's low-cost/low-price rivals are offering buyers a 180-day warranty and are spending above-average amounts on advertising in all four geographic regions. 19. If your company earns an ROE of 20% at a time when the investor-expected ROE target is 25% and if the instructor-determined weight for achieving the ROE target is worth 20 points, then your company's ROE score on the Investor Expectations scoring standard will be 17 points 15 points (75% of the 20 points awarded for meeting the ROE target) 18 points 16 points (80% of the 20 points awarded for meeting the ROE target) 20 points (1 point for each 1% the company earned on total shareholders' equity) 20. Which one of the following is NOT an attractive way to reduce the design, assembly, marketing, and other costs per action-capture camera sold in an effort to achieve a sizable low-cost competitive advantage over rivals? Striving to keeping marketing costs per camera sold in all 4 geographic regions sold to levels that are below the industry-average benchmark and. better still close to the industry-low benchmark (as reported on p. 6 of the Camera& Drone Journal) Spending aggressively (but also taking care not to overspend) on camera product R&D Doing whatever it takes to entirely avoid any use of overtime in assembling cameras because paying PAT members 1.5 times the hourly base wage to assemble cameras at overtime is much too expensive. Paying PAT members an attractive assembly quality incentive to help reduce warranty claims on cameras sold and also boost PAT productivity Trying different combinations of components, product enhancements. and extra performance features to be used in action cameras in order to discover the lowest cost combination for achieving a competitively appealing P/Q rating If a company is being outcompeted by various rival companies in the Europe-Africa market for mulit-featured cameras and consequently has an unappealing low sales volume and market share in Europe-Africa, then company managers should  Explore correcting most or all of the company's competitive weaknesses (shown at the bottom of the latest Competitive Intelligence Report for the Europe-Africa region); in addition, managers should initiate actions that they believe will result in the company having at least two important competitive strengths vis-a-vis its Europe-Africa rivals in the upcoming decision round. If a company earns net income of $40 million in Year 8, has 10 million shares of stock, pays a dividend of $1,50 per share, and has annual interest costs of $15 million, then  The company's EPS for Year 8 would be $4.00 and its retaining earnings for Year 8 would be $25 million (net income of $40 million less dividend payments of $15 million). The industry-low, industry-average, and industry-high benchmarks for camera costs and operating profits on pp. 5-6 of each issue of the GLO-BUS Statistical Review  Are worth careful scrutiny by the managers of all companies because when the benchmarking data signals that a company's costs/operating profits for one or more of the benchmarks are clearly out-of-line (or unappealing), managers are well advised to take corrective action in the next decision round. Which one of the following actions is usually a dependable and appealing way for managers to try to boost their company's EPS?  Achieve a differentiation-based competitive advantage over rivals in both the entry-level and multi-featured camera segments that company managers are savvy enough to sustain; as the market demand for digital cameras grows worldwide and the company exploits its competitive advantage to win additional sales, the profit margins from a growing sales volume of entry-level and multi-featured digital cameras typically results in increase in EPS. Which of the following sets of actions are unlikely to help a company achieve a differentiation-based competitive advantage over some/many of its rivals that are marketing entry-level cameras?  Actions to raise the base pay of PAT members by 10% or more each year, charging prices for entry-level cameras that are $5 or more above any other company in that industry in all four geographic regions, and spending more on new product R&D per entry-level camera that is the highest in the industry (as reported on p. 5 of each issue of the GLO-BUS Statistical Review.) In which one of the following situations/circumstances is it most reasonable for a company to consider shifting away from pursuit of a strategy to strongly differentiate its multi-featured cameras from the multi-featured camera brands of rival companies and sell them at a premium price?  When the market for high-end multi-featured cameras is crowded with companies using more or less copycat differentiation strategies to try to outcompete one another, thus making it difficult for any of these companies to earn attractively high profits. A company's managers should give serious consideration to changing from a low-cost/low price strategy for multi-featured cameras to a different strategy in the multi-featured camera market when  So many other rival companies are marketing low-priced multi-featured cameras that intensive competition in the low-end multi-featured camera segment makes it quite difficult for every company competing for buyers of low-priced multi-featured cameras to capture big enough revenues and global market share to earn attractively large profits selling low-priced multi-featured cameras. $550,000  According to the depreciation rates used by the company and described in the Production Cost Report, if a company adds 50 new workstations at a cost of $75,000 each and also spends $10 million for an addition to its assembly plant to accommodate the new workstations, than its annual depreciation costs will rise by Avoiding contracting the assembly of cameras to outside suppliers/contractors.  Which one of the following actions does NOT result in higher levels of PAT labor productivity in assembling cameras? 26.8% and 17.7%.  Assume a company's Income Statement for a given period has the following entries: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (3,000), Operating Profit (13,400), Net Interest (750), Income Before Taxes (12,650), Taxes (3,795), Net Income (8,855). Based on the above income statement data, the company's operating profit margin and net profit margin are $23,740 and $94,960.  According to explanations provided on the Help screens for the Production Cost Report, if a company pays a PAT member a base wage of $18,000, a $60 quarterly bonus for perfect attendance, and annual fringe benefits of $2,500, if a PAT is paid a $1 incentive bonus per camera assembled, and if a PAT assembles 12,000 cameras per year (or 3000 cameras per quarter), than the annual compensation cost of a single PAT member and a fully-staffed PAT would be Glo-Bus Quiz 2 Formulas:  ROE = Profit / Average Equity of current year and past year (in my hometown, RoE is just profit/equity)  EPS = Earnings/ Common Shares  Free Cash Flow = Net income + depreciation – dividends  Times Interest Earned = Operating Profit of last 4 quarters/ Net Interest of last 4 quarters  Debt to Equity = Long term debt /Equity  Dividend Payout Ratio = Dividend Per Share/ EPS  Dividend Yield = Dividend Per Share / Stock Price  Current Ratio = Current Assets / Current Liabilities (this one should be easy for most people)  The percentage of total production costs to net sales revenues = Production Cost/ Revenue  The percentage of delivery costs for cameras to net sales revenues = Delivery Cost / Revenue  The percentage of total marketing costs for cameras to net sales revenues = Marketing Cost / Revenue  The percentage of total administrative costs for cameras to net sales revenues = Admin Costs /Revenue Increasing total compensation of PAT members to boost their productivity in assembling multi-featured cameras.  Which of the following actions does not help make a company's brand of multi-featured cameras more competitive and attractive to buyers vis-a-vis the brands of rival firms? An enhanced image rating, provided company spending for socially responsible activities is meaningful and is sustained over a multi-year period.--> One of the benefits of pursuing a strategy of social responsibility and corporate citizenship is 32% debt and 685 equity or 32:68.  Sales Revenues (50,000), Operating Profit (14,400), Net Income (9,555), Total Current Assets (70,000), Total Assets (159,000), Total Current Liabilities (26,000), L-T Debt (43,000), Total Equity (91,400), Depreciation (4,000), Dividend Payments (2,250). Based on the above figures, the company's capital structure (defined as the sum of total debt outstanding and total stockholder's equity) consists of what percentages of debt and equity? (The percentages of total capital invested that are debt-financed and equity-financed are among the factors used to determine a company's credit rating, as explained in the Help section for the Comparative Financial Performances presented on p.7 of the GLO-BUS Statistical Review.) The Quarterly Snapshot data in the top sections of the Competitive Intelligence Report that shows each company's competitive efforts (advertising, tech support, prices, P/Q ratings, promotions, models available, and so on) in each geographic region.  The most important/essential results from the latest decision round that company managers need to review/study in order to guide their strategic moves and decisions to improve their company's competitiveness and rank among the top-performing companies in the upcoming decision round are Issue additional shares of stock and use the proceeds to pay down the loans on the company's line of credit.  Which of the following is an action company co-managers should seriously consider in trying to improve the company's credit rating? You may wish to consult the discussion of the credit rating that appears on the Help screen for the Comparative Financial Performance page of the GSR in answering this question. Delivery costs are 2.8% of revenues and represent the company's smallest cost component.  Assume a company's Income Statement for a given quarter is as follows: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (2,000), Operating Profit (14,400), Net Interest (750), Income Before Taxes (13,650), Taxes (4,095), Net Income (9,555). Based on the above data, which of the following statements is false? Avoiding contracting the assembly of cameras to outside suppliers/contractors. → Which one of the following is NOT a way to improve the P/Q rating of a company's brand of multi-featured cameras  Increasing total compensation of PAT members to boost their productivity in assembling multi-featured cameras. → Which of the following actions does not help make a company's brand of multi-featured cameras more competitive and attractive to buyers vis-a-vis the brands of rival firms?  TRUE Issue additional shares of stock and use the proceeds to pay down the debt outstanding on the company's line of credit. → Which of the following is an action company co-managers should seriously consider in trying to improve the company's credit rating? You may wish to consult the discussion of the credit rating that appears on the Help screen for the Comparative Financial Performance page of the GSR in answering this question.  FALSE 26.8% and 17.7%. → Given the following Financial Statement Data: Sales Revenues (50,000), Operating Profit (14,400), Net Income (9,555), Total Current Assets (70,000), Total Assets (159,000), Total Current Liabilities (26,000), L-T Debt (43,000), Total Equity (91,400), Depreciation (4,000), Dividend Payments (2,250). Based on the above figures, the company's capital structure (defined as the sum of total debt outstanding and total stockholder's equity) consists of what percentages of debt and equity? (The percentages of total capital invested that are debt-financed and equity-financed are among the factors used to determine a company's credit rating, as explained in the Help section for the Comparative Financial Performances presented on p.7 of the GLO-BUS Statistical Review.)  FALSE t should be → Assume a company's Income Statement for a given period has the following entries: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (3,000), Operating Profit (13,400), Net Interest (750), Income Before Taxes (12,650), Taxes (3,795), Net Income (8,855). Based on the above income statement data, the company's operating profit margin and net profit margin are Increasing the number of models in the company's line of multi-featured cameras. → Which one of the following is NOT a way to improve the P/Q rating of a company's brand of multi-featured cameras  TRUE Striving to keep the labor costs per camera assembled in-house to amounts that are well below the industry-average benchmark (as reported on p. 5 of each issue of the Glo-BUS Statistical Review). → Which one of the following is an attractive and effective way to reduce the production costs of multi-featured cameras and help put the company in better position to achieve a low-cost competitive advantage over rival companies based on lower production and marketing costs per multi-featured camera sold? TRUE Issue additional shares of stock and use the proceeds to pay down the debt outstanding on the company's line of credit. → Which of the following is NOT an action company co-managers can take to boost a subpar ROE?  TRUE Delivery costs are 2.8% of revenues and represent the company's smallest cost component. → Assume a company's Income Statement for a given quarter is as follows: Sales Revenues (50,000), Production Costs (26,500), Delivery Costs (1,600), Marketing Costs (8,500), Administrative Expenses (2,000), Operating Profit (14,400), Net Interest (750), Income Before Taxes (13,650), Taxes (4,095), Net Income (9,555). Based on the above data, which of the following statements is false? - True Increasing the number of models in the company's line of multi-featured cameras. → Which one of the following is NOT a way to improve the P/Q rating of a company's brand of multi-featured cameras  TRUE An enhanced image rating, provided company spending for socially responsible activities is meaningful and is sustained over a multi-year period. → Which of the following is NOT an action company co-managers can take to boost a subpar ROE?  FALSE The company's EPS for Year 8 would be $4.00 and its retaining earnings for Year 8 would be $25 million (net income of $40 million less dividend payments of $15 million). → If a company earns net income of $40 million in Year 8, has 10 million shares of stock, pays a dividend of $1,50 per share, and has annual interest costs of $15 million, then  TRUE Are worth careful scrutiny by the managers of all companies because when the benchmarking data signals that a company's costs/operating profits for one or more of the benchmarks are clearly out-of-line (or unappealing), managers are well advised to take corrective action in the next decision round. → Which of the following sets of actions are unlikely to help a company achieve a differentiation-based competitive advantage over some/many of its rivals that are marketing entry-level cameras?  FALSE [Show More]

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