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fuzzyflowerobservation-blog · 7 years

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BUS 517 Week 11 Discussion Questions – Strayer NEW

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Week 11 DQ 1

"Improved Project Management" Please respond to the following:

· Your final project for this course is now complete through Project Proposal, Project Charter, and Project Presentation. Share what you can utilize in your real-world projects to enhance project success.

· Describe the most important piece of knowledge that you gained during this course.

Week 11 DQ 2

"Career" Please respond to the following:

· Discuss what you have learned in this course that will help you in your current or future career.

· It is believed that those starting in project management should take advantage of every opportunity to develop and expand their project management skills. Determine at least four ways that this can be accomplished.

#BUS 517 Week 11 Discussion Questions – Strayer NEW

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fuzzyflowerobservation-blog · 7 years

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BUS 517 Final Exam – Strayer New

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Final Exam, Part 1: Chapters 6-8

Final Exam, Part 2, Chapters 9-12

Final Exam, Part 3: Chapters 13-14 and Chapter 16

Ch6

1. Information to develop a project network is collected from the  A. Organization breakdown structure B. Work breakdown structure C. Budget D. Project proposal E. Responsibility matrix

2. Which of the following represents an activity on an AON project network?  A. An arrow B. A line C. A node D. Both A and B are correct E. A, B, and C are all correct

3. Arrows on an AON project network represent:  A. An activity B. Project flow C. Dependency D. Both B and C are correct E. Both A and B are correct

4. When translated into a project network, a work package will become  A. A single activity B. One or more activities C. A milestone D. A critical path E. An arrow

5. Which of the following is provided by a project network but not by the work breakdown structure?  A. Dependencies B. Sequencing C. Interrelationships D. Both A and B are correct E. A, B, and C are all correct

6. On a project network, the activity times are derived from the  A. Organization breakdown structure B. Work packages C. Budget D. Project proposal E. Responsibility matrix

7. Part of a project is to Develop Product Specifications. This is best classified as a(n)  A. Event B. Path C. Activity D. Node E. Milestone

8. An activity that has more than one dependency arrow flowing into it is termed a(n)  A. Parallel activity B. Critical path C. Burst activity D. Merge activity E. Independent activity

9. The critical path in a project network is the  A. Shortest path through the network B. Longest path through the network C. Network path with the most difficult activities D. Network path using the most resources E. Network path with the most merge activities

10. A/an _________ activity has more than one dependency arrow flowing from it.  A. Parallel B. Critical path C. Burst D. Merge E. Independent

11. An item on a project network is Design Software Completed. This is best described as a(n)  A. Event B. Path C. Activity D. Node E. Milestone

12. Activities which can take place at the same time are termed  A. Parallel activity B. Critical path C. Burst activity D. Merge activity E. Independent activity

13. A sequence of connected, dependent activities is termed a(n)  A. Critical path B. Parallel path C. Activity chain D. Path E. Dependent chain

14. An AON project network uses which of the following basic building blocks?  A. Arrows B. Bars C. Nodes D. Both A and C are correct E. A, B, and C are all correct

15. Which of the following is not one of the basic rules to follow when developing project networks?  A. An activity cannot begin until all preceding activities have been completed B. Each activity must have a unique identification number C. Conditional statements are allowed but looping statements are not allowed D. An activity identification number must be larger that that of any preceding activities E. Networks flow from left to right

16. ________ activities must be completed immediately before a particular activity.  A. Merge B. Burst C. Predecessor D. Successor E. Critical

17. ________ activities are to be completed immediately following a particular activity.  A. Merge B. Burst C. Predecessor D. Successor E. Critical

18. The forward pass in project network calculations determines the  A. Earliest time's activities can begin B. Earliest time's activities can be finished C. Duration of the project D. Both A and B are correct E. A, B, and C are all correct

19. The backward pass in project network calculations determines the  A. Latest time's activities can begin B. Earliest time's activities can be finished C. Critical path D. Both A and C are correct E. A, B, and C are all correct

20. Which of the following correctly calculates the early finish for an activity?  A. LS + DUR B. ES + DUR C. LF + DUR D. ES + SL E. LF + SL

21. Which of the following correctly calculates the late start for an activity?  A. EF - DUR B. ES - DUR C. LF - DUR D. ES - SL E. LF - SLACK

22. The amount of time an activity can be delayed and yet not delay the project is termed  A. Total slack B. Free slack C. Critical float D. Float pad E. Slip pad

23. Which of the following will correctly calculate the total slack in an activity?  A. LS - ES B. LF - EF C. LS - LF D. LF - ES E. Both A and B are correct

24. The laying pipe example in the text illustrates the concept of  A. Laddering B. Hammock activities C. Critical path D. Concurrent engineering E. Forward pass

25. Using a special color copy machine for a tradeshow publication illustrates the concept of  A. Laddering B. Hammock activities C. Critical path D. Concurrent engineering E. Forward pass

26. If, for some reason, the project must be expedited to meet an earlier date, which of the following actions would the project manager take first?  A. Check to see which activities cost the least B. Check to see which activities have the longest duration C. Check to see which activities are on the critical path D. Check to see which activities have the most slack E. Check to see which activities have the highest risk

27. Typically an activity on a project network represents  A. A single work package B. One or more tasks from a work package C. Several work packages D. A sub-deliverable E. A cost account

28. Project network logic errors include which of the following?  A. Activities with less than 1 day duration B. Sequences such as "if test successful build prototype, if failure redesign" C. A sequence such as B succeeds A, C succeeds B, A succeeds C D. Both B and C are network logic errors E. A, B, and C are all network logic errors

29. Which company utilized concurrent engineering to design a new line of cars and in the process completed its development six months ahead of schedule?  A. General Motors B. Chrysler C. Ford D. Nissan E. Toyota

30. The minimum amount of time a dependent activity must be delayed to begin or end is referred to as:  A. Hammock B. Laddering C. Lag D. Cushion E. Buffer

31. The requirement for a freshly poured foundation to cure before beginning construction is an example of which of the following type of lag?  A. Start to Start B. Start to Finish C. Finish to Finish D. Finish to Start E. Any of these could be correct

32. Concurrent engineering is a good example of good use of  A. Start to Start lags B. Start to Finish lags C. Finish to Finish lags D. Finish to Start lags E. Any of these could be correct

33. If testing cannot be completed any earlier than four days after the prototype is built, which of the following type of lag exists?  A. Start to Start B. Start to Finish C. Finish to Finish D. Finish to Start E. Any of these could be correct

34. Which of the following represents an activity on an AOA project network?  A. An arrow B. A line C. A node D. Both A and B are correct E. A, B, and C are all correct

35. Nodes on an AON project network represent:  A. An activity B. An event C. Responsibility D. Both B and C are correct E. Both A and B are correct

36. A(n) ________ is an element in the project that consumes time.  ________________________________________

37. The activity time estimates used to build a project network are derived from ________.  ________________________________________

38. A ________ is an activity that has more than one predecessor.  ________________________________________

39. In a ________ the delaying of any activity will delay the completion of the project by the same amount.  ________________________________________

40. Activities that can take place at the same time if the manager wishes them to are called ________.  ________________________________________

41. A (n) ________ represents a point in time when an activity is started or completed and does not consume time.  ________________________________________

42. A (n) ________ has more than one successor activity.  ________________________________________

43. The ________ approach to creating project networks has come to dominate most projects.  ________________________________________

44. In a project network, ________ (recycling through a set of activities) is not permitted.  ________________________________________

45. In a project network, ________ indicate precedence and flow.  ________________________________________

46. The ________ method for creating project networks is sometimes called the Precedence Diagram Method.  ________________________________________

47. Activities that must occur immediately before a given activity are called ________ activities.  ________________________________________

48. Activities that must immediately follow a given activity are called ________ activities.  ________________________________________

49. Activities that can occur while an activity is taking place are called ________ activities.  ________________________________________

50. The ________ calculates the earliest times that activities can be started or finished.  ________________________________________

51. The ________ calculates the critical path and determines how long an activity can be delayed without delaying the project.  ________________________________________

52. An activity is on the critical path if its ________ is the lowest in the network.  ________________________________________

53. ________ can never be negative and applies only to the last activity in a single chain of activities.  ________________________________________

54. A(n) ________ is the minimum amount of time a dependent activity must be delayed to begin or end.  ________________________________________

55. In the ________ technique, an activity with a long duration is broken into smaller segments so that the following activities can begin sooner.  ________________________________________

56. ____________ is defined as the difference between the EF of an activity and the ES of the activity that follows it.  ________________________________________

57. ___________ reflects the likelihood the original critical path(s) will change once the project is initiated.  ________________________________________

58. A ____________ lag exists if debug cannot begin until two days after coding has started and that coding must be completed four days before debug can be completed.  ________________________________________

59. The _________ lag is the most typical type of lag that is encountered in developing networks.  ________________________________________

60. A __________ activity is frequently used to identify the use of fixed resources or costs over a segment of the project.  ________________________________________

61. An activity includes only one work package.  True False

62. Project networks are built using nodes and arrows.  True False

63. The WBS identifies dependencies, the sequencing of activities, and the timing of activities.  True False

64. The critical path is the shortest path through a network and indicates activities that cannot be delayed without delaying the project.  True False

65. An activity is an element of the project that always requires time but may or may not require resources.  True False

66. The two approaches used to develop project networks are AOA and AON.  True False

67. In an AOA network an activity is represented by a box.  Refer to Appendix 6.1  True False

68. In developing a project network, each activity should have a unique identification number that is smaller than the identification numbers of activities that follow it.  True False

69. In developing a project network, neither looping statements nor conditional statements are permitted.  True False

70. Experience suggests that when there are multiple starts, a common start node should not be used to indicate a clear project beginning on the network. Similarly, a single project end node can be used to indicate a clear ending.  True False

71. Burst activities have more than one activity immediately following it (more than one dependency arrow flowing from it).  True False

72. It is acceptable for arrows to cross one another in a network diagram.  True False

73. The forward pass through a project network determines the critical path.  True False

74. The backward pass though a project network determines how long an activity can be delayed without impacting the completion date of the project.  True False

75. Different activities along the same path can have different total slack.  True False

76. By definition, the critical path always has zero slack.  True False

77. It is possible to have more than one critical path at the same time.  True False

78. Free slack applies to an entire project network.  True False

79. Gantt charts are popular because they represent an easy-to-understand, clear picture on a time-scaled horizon.  Refer to Figure 6.12  True False

80. Lags are used to break larger activities into smaller segments so that activities that follow can be started earlier.  True False

81. Only activities that occur at the end of a chain of activities can have free slack.  True False

82. Lags can be use to constrain the start and finish of an activity.  True False

83. Identify and discuss the two major reasons for the integration of work packages into the project network failing in actual practice.

84. What are the two approaches used to develop project networks and identify the differences between them?

85. What are the eight rules to follow in developing project networks?

86. In the network computation process what is a forward pass and what three things does it determine?

87. In the network computation process what is a backward pass and what four things does it determine?

88. What is total slack and how do you determine it?

89. What is a Gantt chart and what advantages does it have over project networks?

90. What is the laddering approach to project networks and why would you use this approach?

91. What is a lag and why would you need to use one?

92. What is a hammock activity and give an example?

93. What is the Concurrent Engineering Approach and why should project managers be aware of it?

94. Identify and briefly describe the four types of lags giving an example for each type.

ch7

1. An uncertain event or condition that, if it occurs, has a positive or negative effect on a project objectives is termed.  A. Random chance B. A disaster C. Risk D. Hazard E. Bad luck

2. The chances of a risk event occurring as a project proceeds through its life cycle tends to  A. Slowly rise B. Drop sharply and then level out C. Rise sharply and then level out D. Remain about the same E. Slowly drop

3. The cost impact of a risk event occurring as a project proceeds through its life cycle tends to  A. Slowly rise B. Drop sharply and then level out C. Rise sharply and then level out D. Remain about the same E. Slowly drop

4. The attempt to recognize and manage potential and unforeseen trouble spots that may occur when a project is implemented is known as  A. Risk forecasting B. Risk management C. Contingency planning D. Scenario analysis E. Disaster protection

5. Which of the following is not one of the steps in the risk management process?  A. Risk response development B. Risk assessment C. Risk identification D. Risk tracking E. Risk response control

6. The initial step in the risk management process is to  A. Determine the level of acceptable risk B. Assess the risk potential C. Identify the risks D. Set aside budget funds for managing the risks E. Appoint a risk manager

7. One common mistake made early in the risk identification process is to  A. Not all possibilities are considered B. Participants are over-optimistic C. Participants are over-pessimistic D. Focus on objectives and not on the events that could produce consequences. E. Too much attention is given to past events

8. In the beginning the focus of risk management should be on risks that  A. Impact the whole project B. Impact the critical path C. Are known D. Have the greatest cost impact E. Have the greatest schedule impact

9. The 1999 NASA Mars Climate Orbiter is an example of  A. Disaster avoidance through proactive risk management B. Murphy's Law C. Proper use of critical thinking D. Mismanaged risk control E. Using historical records to assess risk

10. Which of the following would not be considered a threat?  A. Inflation B. Meeting the project schedule C. International disruptions D. Economic conditions E. Competition

11. A list of questions that address traditional areas of uncertainty on a project is termed a risk  A. Risk profile B. Questionnaire C. Research D. Query E. Checklist

12. Which of the following is typically included in risk profiles?  A. Management aspects B. Market aspects C. Technical aspects D. Both A and C are included E. A, B, and C are all included

13. All of the following are included in the risk identification process except  A. Customers B. Subcontractors C. Competitors D. Vendors E. None of these are included

14. One of the keys to success in risk identification is  A. Critical thinking B. Optimism C. Pessimism D. A "can do" attitude E. All of these are correct

15. The easiest and most commonly used technique for analyzing risks is _____ analysis.  A. Probability B. Scenario C. Payback D. Risk/reward E. Impact

16. A risk profile is a list of questions that address traditional areas of uncertainty on a project that answers developed from:  A. When the event might occur in the project B. Chances of the event occurring C. Interaction with other parts of the project or with other projects D. From previous, similar projects E. Magnitude or severity of the event's impact

17. The risk management tool that is divided into three color-coded zones representing major, moderate, and minor risks is the risk  A. Assessment form B. Responsibility matrix C. Scenario assessment D. Impact assessment E. Risk severity matrix

18. The risk assessment form contains all of the following except  A. Likelihood of the risk event occurring B. Potential impact of the risk event C. Who will detect the occurrence of the risk event. D. Difficulty of detecting the occurrence of the risk event E. When the risk event may occur

19. The two scales of a risk severity matrix measure  A. Time, cost B. Cost, schedule C. Impact, cost D. Time, impact E. Likelihood, impact

20. Which of the following is not one of the probability analysis tools?  A. Ratio/range analysis B. Decision tree C. PERT simulation D. PERT E. All of these are probability analysis tools

21. This risk assessment tool is a variation of the risk severity matrix that includes the ease of detection for each of the identified risks.  A. PERT simulation B. FMEA analysis C. Ratio/range analysis D. Probability analysis E. Semi-quantitative analysis

22. Which of the following is not included in a Failure Mode and Effects Analysis?  A. Impact B. Probability C. Detection D. Risk value E. All of these are included

23. Which of the following is used to review activity and project risk?  A. NPV B. S-curves C. PERT D. Decision trees E. All of these can be used

24. Which of the following is not one of the potential responses to a specific risk event?  A. Mitigating B. Retaining C. Ignoring D. Transferring E. Sharing

25. A Risk Response Matrix contains all of the following except  A. Contingency plan B. Trigger C. Who is responsible? D. Response E. All of these are included in the matrix

26. The demolition of the Seattle Kingdome (Snapshot from Practice) is an example of which of the following?  A. Mitigating B. Retaining C. Ignoring D. Transferring E. Sharing

27. The risk associated with one of the key members being stuck by lightning would most likely be handled by which of the following?  A. Mitigating B. Retaining C. Ignoring D. Transferring E. Sharing

28. Funds that are for identified risks that have a low probability of occurring and that decrease as the project progresses are called ______ reserves.  A. Management B. Budget C. Contingency D. Padded E. Just in case

29. Technical risks are:  A. Can often be the kind that cause the project to be shut down. B. Problematic C. Imposed duration dates D. Both A and B are correct E. A, B, and C are all correct

30. Detailing all identified risks, including descriptions, category, and probability of occurring, impact, responses, contingency plans, owners and current status is called:  A. Management reserves B. Change control C. Contingency reserves D. Risk register E. Risk profiles

31. Which of the following is identified to cover major unforeseen risks and, hence, are applied to the total project?  A. Budget reserves B. Management reserves C. Time buffers D. Both B and C are correct E. A, B, and C are all correct

32. Change management systems are designed to accomplish all of the following except:  A. Track all changes that are to be implemented B. Review, evaluates, and approve/disapprove proposed changes formally C. Identify expected effects of proposed changes on schedule and budget D. Reflect scope changes in baseline and performance measures E. All of the above are correct

33. The ________ impact of a risk event in a project is less if the event occurs earlier rather than later.  ________________________________________

34. The likelihood of a risk event occurring ________ as a project goes through its life cycle.  ________________________________________

35. The first step in the Risk Management process is ________.  ________________________________________

36. Risk events such as inflation, market acceptance, and government regulations are referred to as ________.  ________________________________________

37. A ________ is a list of questions that address traditional areas of uncertainty on a project.  ________________________________________

38. The easiest and most commonly used technique for analyzing risks is ________.  ________________________________________

39. The ________ form identifies each risk event, the likelihood of it occurring, the potential impact, when it may occur, and the degree of difficulty in detecting it.  ________________________________________

40. The ________ matrix is divided into red, yellow, and green zones representing major, moderate, and minor risks.  ________________________________________

41. The vertical scale on the Risk Severity Matrix measures the _________ of a potential risk event.  ________________________________________

42. The horizontal scale on the Risk Severity Matrix measures the _________ of a potential risk event.  ________________________________________

43. In __________ the Risk Severity Matrix is extended by including the ease of detecting a risk event occurring.  ________________________________________

44. In a ________, three different estimates of activity times are used to statistically predict the time an activity will take to complete.  ________________________________________

45. The "Snapshot from Practice" case where Ellipsus Systems developed parallel prototype systems (WAP and JAVA) is an example of _________ a risk.  ________________________________________

46. Testing a new project on a smaller isolated area prior to installing it for the entire organization is an example of ________ a risk.  ________________________________________

47. Performance bonds, warranties, and insurance are examples of ________ a risk.  ________________________________________

48. When the entertainment industry formed a consortium to define a common operating format for DVD it was ________ the risk.  ________________________________________

49. If a risk event is very unlikely to occur the project owner would probably ________ the risk.  ________________________________________

50. A ________ identifies what to do if a potential risk event actually occurs.  ________________________________________

51. ________ reserves are identified for specific work packages and cover risks that have a low probability of occurring.  ________________________________________

52. ________ reserves are controlled by the project manager and used to cover major unforeseen risks to the entire project.  ________________________________________

53. A ____________ is an alternative that will be used if a possible foreseen risk event becomes a reality.  ________________________________________

54. A ____________ is useful for summarizing how the project team plans to manage risks that have been identified.  ________________________________________

55. The probability that a risk event will occur is higher during the initial stages of a project.  True False

56. Due to the impact over a long period of time, risk events that occur in the early stages of a project will have a greater cost impact than those that occur in later stages.  True False

57. During risk identification the smaller risks should be identified first because they will naturally lead to identifying the larger risks.  True False

58. One common mistake that is made early on in the risk identification process is to focus on consequences and not on the events that could produce consequences.  True False

59. Risks such as inflation and monetary exchange rates are not usually included in a project's risk assessment.  True False

60. The first step in the risk management process is Risk Assessment.  Refer to Figure 7.2  True False

61. A risk profile is a list of questions that have been developed and refined from previous, similar projects.  True False

62. The risk identification process should be limited to just the core project team.  True False

63. Since the goal is to find problems before they happen, the project manager should encourage critical thinking when it comes to risk identification.  True False

64. The Risk Severity Matrix rates risk events based upon schedule and cost.  Refer to Figure 7.7  True False

65. In a Risk Severity Matrix a green zone risk is considered inconsequential and ignored unless their status changes.  True False

66. The quality and credibility of the risk analysis process requires that different levels of risk probabilities and impacts be defined.  True False

67. Adopting proven technology instead of experimental technology is an example of mitigating a risk.  True False

68. The FMEA method calculates a risk value by assigning ease of detection ratings to the key risk elements.  True False

69. Performance bonds, warranties, and guarantees are financial instruments used to share risk.  True False

70. Fixed price contracts are an example of transferring risk from an owner to a contractor.  True False

71. Scheduling outdoor work in the summer, investing in up front safety training, and choosing high quality materials are examples of retaining a risk.  True False

72. Budget reserves are setup to cover identified risks associated with specific segments of a project while management reserves are set up to cover unidentified risks associated with the total project.  True False

73. Change management systems involve reporting, controlling, and recording changes to the project baseline.  True False

74. Project managers need to establish an environment in which participants feel comfortable raising concerns and admitting mistakes.  True False

75. Contingency funding is made up of budget reserves and management reserves.  True False

76. Describe the relationship between the likelihood of a risk event occurring and the cost of fixing the risk event as a project proceeds through its life cycle.

77. Identify and briefly describe the four steps in risk management.

78. Describe the process for identifying project risks.

79. What is a risk profile and what benefits does it provide to risk management?

80. Identify at least six items that may be included on a Risk Profile.

81. How should a risk assessment be conducted?

82. What is a Risk Severity Matrix and what does it do?

83. Identify and briefly describe the five ways to respond to identified risks.

84. What is the difference between budget reserves and management reserves?

85. What is Change Control Management and what function does it perform?

86. Identify and briefly describe the parts of a Risk Response Matrix and explain how one would be used.

87. Compare and contrast budget reserves and management reserves.

ch8

1. Delaying noncritical activities to lower peak demand on resources is known as resource  A. Shifting B. Effectiveness C. Manipulating D. Resource smoothing E. Allocation

2. If resources are not adequate to meet peak demands, the resulting reschedule is termed  A. Resource-constrained scheduling B. Time-constrained scheduling C. Mandatory leveling D. Project resource adjustment E. Allocation

3. Which of the following is a potential consequence of failing to schedule limited resources?  A. Costly activity delays B. Costly project delays C. Difficulty in taking quick corrective action D. Both A and B are correct E. A, B, and C are all correct

4. When developing a new software package, the software must be designed, the code must be written, and the code must be tested. This is an example of a ______ constraint.  A. Physical B. Technical C. Resource D. Schedule E. Time

5. Which of the following is not one of the types of project constraints?  A. Physical B. Technical C. Resource D. Time E. All of these are types of project constraints

6. Sam the project engineer has been scheduled to run the product system test at the same time he is to build a marketing prototype. This is an example of a ______ constraint.  A. Physical B. Technical C. Resource D. Scheduling E. Time

7. Susan is to conduct environmental testing but the chamber cannot hold all the equipment that she wants to test. This is an example of a _________ constraint.  A. Physical B. Technical C. Resource D. Scheduling E. Time

8. All of the following are kinds of resource constraints except  A. Materials B. People C. Equipment D. Information E. All of the above are resource constraints

9. Sam is trying to order the concrete needed to continue his project. However, the supplier won't be able to deliver it until next week. This is an example of a _______ constraint.  A. Working capital B. People C. Equipment D. Information E. Materials

10. A special truck that George needs on his project has been scheduled on another project. This is a ______ constraint.  A. Working capital B. People C. Equipment D. Information E. Materials

11. Most of the scheduling methods available today require the project manager to classify the project as either _______ constrained or ______ constrained.  A. Time, quality B. Quality, resource C. Cost, time D. Quality, cost E. Time, resource

12. Regina's boss has told her that her project is very important. If the critical path is delayed, she will be given whatever she needs to get it back on schedule. Her project is ________ constrained.  A. Time B. Quality C. Cost D. Performance E. Resource

13. In reviewing the status of her project with top management, Shirley was told that there only were two programmers that she could use for her project. Her project is __________ constrained.  A. Time B. Quality C. Cost D. Performance E. Resource

14. All resource leveling techniques involve  A. Delaying noncritical activities B. Delaying critical activities C. Using negative slack D. Both A and C are correct E. A, B, and C are all correct

15. Scheduling time-constrained projects focuses on resource  A. Demands B. Increases C. Assumptions D. Utilization E. All are correct

16. The most widely used approach to apply heuristics, which have been found to consistently minimize project delay over a large variety of projects is the  A. Parallel method B. Resource method C. Materials D. Both A and C are correct E. A, B, and C are all correct

17. Resource leveling can provide  A. Lower peak demand B. Reduced resource need over the life of the project C. Reduced fluctuations in resource demand D. Both A and B are correct E. A, B, and C are all correct

18. Jan is trying to reallocate resources in a time-constrained project to create smoother resource utilization with a low level of risk. She should move to activities with the  A. Smallest duration B. Least slack C. Most slack D. Lowest identification number E. Highest cost

19. In a resource-constrained project, which of the following is most likely to be changed?  A. The completion date B. The budget C. Project quality D. Both A and B are equally likely E. A, B, and C are all equally likely

20. In a resource-constrained project, the first priority in assigning resources is usually given to activities with the  A. Smallest duration B. Least slack C. Most slack D. Lowest identification number E. Highest cost

21. In a resource-constrained project the second priority in assigning resources is usually given to activities with the  A. Smallest duration B. Least slack C. Most slack D. Lowest identification number E. Highest cost

22. The word Heuristics means  A. Resource constraints B. Flexibility C. The critical path changed D. Parallel activities become sequential E. Rule of thumb

23. Splitting an activity creates the following situation:  A. More people working on the same activity B. There are possible startup and shutdown costs C. A resource may be moved from one activity to another and then back D. Both B and C are correct E. A, B, and C are all correct

24. The U.S. Forest Service "snapshot from practice" illustrated the importance of  A. Time constraints B. Resource constraints C. Cost constraints D. Both B and C are correct E. A, B, and C are all correct

25. More common problems associated with managing multiproject resources include all of the following except  A. Inefficient resource utilization B. Delays in one project cause delays in other projects C. Reducing "downtime" created by lack of tasks to perform D. Resource bottlenecks E. All of these are common problems

26. When a company will reduce the number of projects they have to manage internally to only core projects and send noncritical projects to contractors and consulting firms this is called  A. Outsourcing B. Redistribution of projects C. Project allocation D. Task sharing E. Both B and D are correct

27. Which of the following is not one of the more common problems associated with scheduling multiproject resources?  A. Overall schedule slippage B. Inefficient resource utilization C. Resource bottlenecks D. Both A and C are correct E. A, B, and C are all correct

28. In a resource-constrained project the third priority in assigning resources is usually given to activities with the  A. Smallest duration B. Least slack C. Most slack D. Lowest identification number E. Highest cost

29. In the Botanical Garden example, which of the following was used to solve the resource problem?  A. Resource allocation B. Smoothing resource demand C. The parallel method D. Both A and C are correct E. A, B, and C are all correct

30. Project budgets are developed by time-phasing which of the following?  A. Resource schedules B. Work packages C. The network diagram D. Both A and C are correct E. A, B, and C are all correct

31. A project budget report is showing our project as spending $35,000 against a budgeted amount of $40,000. Which of the following is true?  A. We are spending less than we should for the project B. We are doing a good job managing the project C. We should check to see if all the bills have been paid D. Both A and B are correct E. We can't be sure how the project is going

32. Delaying noncritical activities to lower peak demand and, thus, increase resource utilization is called _______ leveling.  ________________________________________

33. A(n) ________ constraint addresses the sequence in which project activities must occur.  ________________________________________

34. Having one person responsible for performing several activities, all due at the same time, is an example of a(n) ________ constraint.  ________________________________________

35. Trying to renovate a ship compartment that is too small for more than one person is an example of a(n) ________ constraint.  ________________________________________

36. A shortage of programmers to write software is an example of a(n) ________ type of resource constraint.  ________________________________________

37. The shortage of computer chips to produce a circuit board is an example of a(n) ________ type of resource constraint.  ________________________________________

38. If three copiers are needed to produce a final report on time and only two are available, the project is facing a(n) ________ type of resource constraint.  ________________________________________

39. Hector wants to bring on another programmer to work on the project but the company does not have anyone who has the needed skills. Hector's project is facing a(n) ________ constraint.  ________________________________________

40. In order that the new product is on the shelf for the Christmas buying season, the development of the new product would be classified as a(n) ________ constrained project.  ________________________________________

41. Beth has two engineers assigned to her project and cannot get any more even if it means slipping the due date on her project. She is managing a(n) ________ constrained project.  ________________________________________

42. All leveling techniques delay noncritical activities by using ________ to reduce peak demand.  ________________________________________

43. Scheduling activities in a constrained project typically has ________ as the top heuristic rule.  ________________________________________

44. The ________ is the most widely used approach to apply heuristic rules to scheduling activities in a constrained project.  ________________________________________

45. When using the ________ scheduling technique, the work in an activity is interrupted to work on another activity and is then resumed at a later point in time.  ________________________________________

46. In scheduling resource-constrained projects, _________ are typically used rather than optimum mathematical solutions.  ________________________________________

47. In scheduling terms, ________ constrained means that project duration is fixed and resources are flexible.  ________________________________________

48. In scheduling terms, ________ constrained means that a specific resource is fixed and the duration of the project is flexible.  ________________________________________

49. Start-up and shutdown costs are major considerations when using the ________________ scheduling technique.  ________________________________________

50. To deal with problems related to having several concurrent projects, companies are creating ________ to oversee the scheduling of resources across multiple projects.  ________________________________________

51. Many companies are using ________ from contractors and consultants as a means of dealing with the peaks and valleys of resource allocation among projects.  ________________________________________

52. The ______________ is the most widely used approach to apply heuristics in resource-constrained projects.  ________________________________________

53. The ability to more efficiently manage the ebbs and flows of project work is one of the major driving forces behind ____________ today.  ________________________________________

54. Without a time-phased __________ good project schedule and cost control are impossible.  ________________________________________

55. A project cost baseline is also called __________.  ________________________________________

56. The sequence of (1) pour foundation, (2) build frame, and (3) cover roof is a type of physical constraint.  True False

57. Too many parallel activities for one individual are an example of a resource constraint.  True False

58. A project that is not resource-constrained is time-constrained.  True False

59. Resource leveling is only used on projects which are resource-constrained.  True False

60. Resource Bottlenecks are one of the three more common problems encountered in managing multiproject resource schedules.  True False

61. The inability to get more than two earth movers on a construction site at the same time is an example of a physical constraint.  True False

62. The most obvious and important kind of resource constraint is a lack of materials.  True False

63. Having too few programmers and too many engineers is an example of a people resource constraint.  True False

64. If a project needs one earth-mover six months from now and the organization has four such machines, there is no equipment resource constraint.  True False

65. A lack of readily available engineers is a technical constraint.  True False

66. All projects are usually either time-constrained or resource-constrained.  True False

67. To determine if a project is time-constrained or resource-constrained you would consult the project priority matrix.  True False

68. Scheduling time-constrained projects focuses on the optimal utilization of resources.  True False

69. All leveling techniques delay noncritical activities by using positive slack to smooth out the resource requirements.  True False

70. Scheduling time-constrained projects focuses on resource utilization.  True False

71. Scheduling resource-constrained projects focuses on completing the project as soon as possible under the given constraints.  True False

72. Heuristics are used in resource-constrained projects to develop the optimal schedule.  True False

73. The top priority in using heuristics to allocate scare resources is those activities with the smallest duration.  True False

74. The critical path in a resource-constrained schedule can be a group of disjointed, unconnected activities.  True False

75. Splitting is a scheduling technique used to get a better schedule or better resource utilization.  True False

76. Without a time-phased budget good project schedule and cost control are impossible.  True False

77. Many companies are using outsourcing as a means for dealing with their resource allocation problems associated with managing multiproject resources.  True False

78. Identify and briefly describe the three types of project constraints.

79. What is the difference in project goals when using resource leveling on time-constrained projects and using it on resource-constrained projects?

80. Identify the potential impacts of project constraints.

81. Identify and give an example of the three types of resource constraints.

82. Identify and briefly describe the two classifications of scheduling problems.

83. What are the disadvantages of resource leveling?

84. Why would a project manager use heuristics rather than a mathematical solution to level resources?

85. What are the three most common heuristics (in order of priority) used to allocate resources to project activities?

86. Describe the parallel method for applying heuristics to the allocation of project resources.

87. Why should project managers be cautious about using the splitting scheduling technique?

88. Identify and briefly discuss the three more common problems encountered in managing multiproject resource schedules.

89. Identify and briefly describe the potential impacts of resource-constrained scheduling.

90. If your project has spent $50,000 versus a budget of $45,000 and it is a week ahead of schedule, is it a certainty that your project is doing well?

ch9

1. The president of a software company remarks in a speech that new technologically advanced software will be available in one year. This is an example of reducing project duration caused by:  A. Imposed project deadlines B. Time to market C. Unforeseen project delays D. High overhead E. Incentive contracts

2. Intense global competition and rapid technological advances create pressure on developing projects rapidly. This is an example of reducing project duration caused by:  A. Imposed project deadlines B. Time to market C. Unforeseen project delays D. High overhead E. Incentive contracts

3. A contractor finished a bridge across a lake 18 months early and received more than $6 million for the early completion. This is an example of reducing project duration caused by:  A. Imposed project deadlines B. Time to market C. Unforeseen project delays D. High overhead E. Incentive contracts

4. Adverse weather, design flaws, and equipment breakdown can create negative slack. This is an example of reducing project duration caused by:  A. Imposed project deadlines B. Time to market C. Unforeseen project delays D. High overhead E. Incentive contracts

5. Total project costs include all of the following except:  A. Supervision B. Administration C. Project manager's salary D. Interest E. All of these are included in total project costs

6. Which of the following is not considered a project indirect cost?  A. Supervision B. Consultants C. Equipment D. Interest E. All of these are considered project indirect costs

7. Project costs are generally classified as ____ costs.  A. Direct B. Indirect C. Overhead D. Both A and B are correct E. A, B, and C are all correct

8. Low-cost, realistic, efficient methods for completing an activity under normal conditions are supported by ____ time.  A. Normal B. Budget C. Optimized D. Expected E. Target

9. The shortest possible time an activity can be completed realistically is called ___ time.  A. Expedited B. Accelerated C. Crash D. Optimistic E. Optimal

10. The most common response for meeting unattainable deadlines is to  A. Reduce or scale back the scope of the project. B. Decrease the critical paths C. Crash all elements of the project D. Change the time to market statement E. B, and C are correct

11. ____ costs are incurred when completing an activity in its realistically shortest time.  A. Normal B. Reserve C. Crash D. Accelerated E. Expedited

12. An activity's crash costs include ____ costs.  A. Direct B. Indirect C. Overhead D. Both A and B are correct E. A, B, and C are correct

13. Cost slope can be determined by dividing the  A. Run by the rise B. Rise by the run C. Crash cost by the normal cost D. Normal cost by the crash cost E. Both B and C are correct

14. The less steep the cost slope of an activity, the  A. Less it costs to shorten one time period B. More it costs to shorten one time period C. Smaller the crash time D. Larger the crash time E. Cannot be determined by the information given

15. Which of the following correctly calculates an activity's cost slope?  A. (normal cost-crash cost)/(normal time-crash time) B. (crash cost-normal cost)/(normal time-crash time) C. (normal time-crash time)/(crash cost-normal cost) D. (normal time-crash time)/(normal cost-crash cost) E. (crash cost-normal cost)/(crash time-normal time)

16. An activity's cost slope represents an activity's  A. Total cost per unit of time B. Cost per unit of time C. Indirect cost per unit of time D. Both B and C are correct E. A, B, and C are all correct

17. In selecting the best activity to reduce you would first select the activity with the  A. Earliest start time B. Steepest slope C. Least steep slope D. Longest duration E. Largest crash time

18. The optimum duration for a project is at the point where:  A. Direct costs are the lowest B. Indirect costs are the lowest C. Direct costs equal indirect costs D. Total project costs are the lowest E. The project changes from time-constrained to resource-constrained

19. Creating a Project Cost-Duration graph is useful:  A. During the pre-project planning phase B. After the project has begun C. After the completion of the project D. Both A and B are correct E. A, B, and C are all correct

20. Crashing a project should occur:  A. As early as possible B. As late as possible C. Midway through the project D. Both A and C are correct E. Cannot be determined with the information given

21. If a network has several critical or near-critical paths it is deemed to be:  A. Well planned B. The lowest cost alternative C. Resource-constrained D. Sensitive E. Insensitive

22. The project direct-cost line near the normal point is usually:  A. Sloped steeply B. Relatively flat C. Rising D. Falling E. Gently sloped

23. The relationship between cost and time for various durations is assumed to be:  A. Linear B. Curvilinear C. Variable D. Conversely related E. Exponentially related

24. A common method for shortening the project time is to:  A. Adding resources B. Schedule overtime C. Subcontract an activity D. Both A and B are correct E. A, B, and C are all correct

25. A positive situation where moving toward the optimum time can result in very real, large savings—this occurs when the network is:  A. Insensitive B. Sensitive C. Ahead of schedule D. Shifting to the critical chain E. Implementing a fast-tracking system

26. Which of the following is/are included in a Project Cost-Duration Graph?  A. Total indirect cost B. Total direct cost C. Total project cost D. Both A and B are correct E. A, B, and C are all correct

27. One way of reducing project costs is identifying tasks that _________ can do themselves.  A. Vendors B. Suppliers C. Customers D. Company employees E. Project teams

28. The most common method for shortening project time is to  A. Subcontract activities B. Compromise the quality C. Add additional staff and equipment D. Work overtime E. Reduce the project scope

29. Which of the following is not one of the more commonly used options for cutting project costs?  A. Reduce project scope B. Have owner take more responsibility C. Moving the completion date further out D. Brainstorming cost savings options E. Outsourcing project activities

30. Which of the following is the most common method for shortening project time?  A. Assigning additional staff and equipment B. Subcontract work C. Schedule overtime D. Reduce project scope E. Reduce the quality

31. According to Brooks' Law, adding more people to a late project is most likely to have which of the following impact?  A. Keep the project from slipping any further B. Get the project back on schedule C. Make the project slips further D. Both A and B are correct E. None of these relate to Brooks' Law

32. Which of the following is the easiest method for shortening project time?  A. Assigning additional staff and equipment B. Subcontract work C. Schedule overtime D. Reduce project scope E. Reduce the quality

33. Which of the following is not one of the techniques for accelerating project completion?  A. Assigning additional staff and equipment B. Establish a core team C. Do it twice—fast and correctly D. Reduce project scope E. All of these are acceptable techniques

34. When the project team is salaried, which of the following is the preferred choice for accelerating project completion?  A. Assigning additional staff and equipment B. Subcontract work C. Schedule overtime D. Work longer hours E. Both C and D are preferred choices

35. The Snapshot from Practice "Cell-Phone Wars" is an excellent example of reducing project duration due to:  A. Imposed project deadlines B. Time to market C. Unforeseen project delays D. High overhead E. Incentive contracts

36. When a politician makes a public statement that a new building will be available in two years, a(n) ________ duration has reduced the project duration.  ________________________________________

37. Intense global competition and rapid technological advances combine to create a(n) ________ imposed project duration date.  ________________________________________

38. The Snapshot from Practice which detailed the Northridge earthquake demonstrated the importance of reducing a project's ______.  ________________________________________

39. Sometimes very high ________ costs are recognized before a project begins and reducing these costs through shorter project durations becomes a high priority.  ________________________________________

40. The ________ project cost is the sum of the indirect and direct costs.  ________________________________________

41. Costs such as supervision, administration, consultants, and interest are examples of ________ project costs.  ________________________________________

42. Costs such as labor, materials, equipment, or contractors are examples of ________ project costs.  ________________________________________

43. Direct costs are assignable directly to a project ________.  ________________________________________

44. Because direct costs are assumed to be developed from normal methods and time, any reduction in activity time should ________ the cost of the activity.  ________________________________________

45. To shorten the duration of a project the project manager should limit the choices of activities to just those which ________.  ________________________________________

46. The ________ time for an activity represents low-costs, realistic, efficient methods for completing the activity under typical conditions.  ________________________________________

47. Shortening an activity is called ________.  ________________________________________

48. The direct costs for completing an activity as early as possible is called its ________.  ________________________________________

49. An activity's ________ is calculated by dividing the rise by the run.  ________________________________________

50. Subtracting an activity's normal cost from the crash cost will calculate an activity's ________.  ________________________________________

51. Subtracting an activity's crash time from the normal time will calculate an activity's ________.  ________________________________________

52. When considering whether to move the project to its optimum cost-time position, the manager should also consider ________.  ________________________________________

53. A network is considered to be ________ if it has a predominate critical path with no other path close in terms of slack.  ________________________________________

54. The easiest way to add more resources to a project is not to add more people, but to schedule ________.  ________________________________________

55. According to ________, adding more manpower to a late software project makes it later.  ________________________________________

56. The easiest way to add more labor to a project is not to add more people, but to add ___________.  ________________________________________

57. ____________ is the rearranging of the project network logic so that critical activities are done in parallel rather than sequentially.  ________________________________________

58. ___________ is probably the most common response for meeting unattainable deadlines.  ________________________________________

59. In the "I'll Bet You..." Snapshot from Practice, the draftsman won ___________ for making a very difficult deadline.  ________________________________________

60. A rule of thumb for moderate- to high-technology firms is that a six-month delay in bringing a product to market can result in a gross profit loss of about 35 percent.  True False

61. Imposed project durations almost always leads to a higher-cost project than one planned with detailed scheduling of all the project's activities.  True False

62. Managers have several effective methods for crashing specific project activities when resources are not constrained.  True False

63. Indirect costs generally represent overhead costs such as supervision, administration, consultants, and interest.  True False

64. The total cost for each possible duration of a project is the sum of labor, materials, and equipment.  True False

65. Direct costs are so named because they can be assigned directly to a work package and activity.  True False

66. Because direct costs are assumed to be developed from normal methods and time, any reduction in activity time should add to the costs of the activity.  True False

67. The sum of the costs of all the work packages represents the total direct costs for the project.  True False

68. Incentive contracts can make reduction of project time rewarding—usually for both the project contractor and owner.  True False

69. Shortening an activity's duration is termed crashing.  True False

70. Expected time for an activity represents low-cost, realistic, efficient methods for completing the activity under anticipated conditions.  True False

71. Crash cost is the incremental cost incurred when an activity is reduced in duration.  True False

72. The cost slope of an activity is calculated by dividing the run by the rise.  True False

73. Crash time is the greatest time reduction possible under realistic conditions.  True False

74. The higher the slope of an activity the greater the cost to reduce its duration.  True False

75. Creating a Project Cost-Duration Graph in the pre-project planning phase without an imposed duration is the best time to use this tool.  True False

76. Crashing a more expensive activity may be wise if fewer inherent risks are involved.  True False

77. A project network is classified as sensitive if it has a large number of interacting paths.  True False

78. Collecting crash times for a moderate-size project is relatively easy.  True False

79. While the relationship between normal and crash times is really curvilinear, the assumption that it is linear is seldom a concern for practicing managers.  True False

80. The accuracy of crash times and costs is frequently rough at best, when compared with normal time and cost.  True False

81. One of the advantages of using a Project Cost-Duration Graph is that it keeps the importance of indirect costs in the forefront of decision making.  True False

82. Identify and briefly describe five reasons for attempting to reduce the duration of a project.

83. Identify and give an example for both of the major categories that make up project costs.

84. Draw a typical Project Cost-Duration Graph and label the key elements.

85. Why is the project duration with the lowest direct costs seldom the optimum duration for a project?

86. Given an equal level of risk and the need to reduce overall project duration, why would you not select the activity with the lowest slope in the entire project network to crash first?

87. What is crashing and include a discussion of crash time and crash cost?

88. How would you calculate an activity's slope and what does it represent?

89. Given that an activity's normal time and cost are ten days and $400, and its crash time is five days and $800, what is the activity's slope?

90. What do we mean when we say that a project network is sensitive and why is that important to a project manager?

91. Identify options for accelerating a project schedule when resources are not constrained.

92. Identify options for accelerating a project schedule when resources are constrained or the budget is severely constrained.

93. What are the benefits to using a Project Cost-Duration Graph to assist in comparing any proposed alternative or change with the current baseline?

94. What is Critical-chain (C-C) project management and why can it be of benefit to project managers?

ch10

1. Project success or failure often depends upon the contributions of all of the following except:  A. Customers B. Suppliers C. Contractors D. Competitors E. Top management

2. Project leadership is about coping with:  A. Formulating plans and objectives B. Monitoring results against plans C. Change D. Taking corrective action when necessary E. All of these are part of leadership

3. The difference between project management and project leadership is that project management includes:  A. Recognizing the need to alter direction B. Aligning people to meet new directions C. Monitoring results against plans D. Motivating people to meet new objectives E. All of these are leadership functions

4. Well-defined projects that encounter no significant surprises require little:  A. Management B. Leadership C. Monitoring D. Corrective action E. All of these are only required to a minor extent

5. Which of the following requires more management rather than leadership?  A. Taking corrective action B. Changes in project scope C. Technological stalemates D. Breakdowns in coordination between people E. All of these require the same level of management

6. In conducting meetings an effective project manager will take the role of a:  A. Parliamentarian B. Master of ceremonies C. Conductor D. Cattle herder E. Teacher

7. Project managers often find themselves negotiating with all the following except:  A. Vendors B. Functional managers C. Consultants D. Competitors E. All of these are correct

8. Groups such as human resources, information systems, purchasing agents, and maintenance are typically classified as:  A. Project managers B. Administrative support C. Functional managers D. Project sponsors E. Customers

9. The closest relationships in a project network of relationships are with:  A. Other project managers B. Project sponsors C. Top management D. Customers E. Project team members

10. The second ring in the network of relationships for project managers includes all of the following except:  A. Other project managers B. Customers C. Functional managers D. Top management E. Project sponsors

11. The outer ring in the network of relationships for project managers includes all of the following except:  A. Other organizations B. Customers C. Contractors D. Government agencies E. Administrative support

12. The old-fashion view of managing projects emphasized which of the following?  A. Planning B. Directing C. Controlling D. Both B and C are correct E. A, B, and C are all correct

13. The new perspective of project management emphasizes which of the following?  A. Financial control B. Managing project stakeholders C. Schedule/cost tradeoffs D. Both A and B are correct E. A, B, and C are all correct

14. Networks are mutually beneficial alliances that are generally governed by the law of:  A. Supply-demand B. Brooks's law C. Reciprocity D. A squeaky wheel E. Risk-reward

15. In terms of commonly traded organizational currencies, vision, excellence, and ethical correctness are part of ______ related currencies.  A. Task B. Position C. Inspiration D. Relationship E. Personal

16. In terms of commonly traded organizational currencies, resources, assistance, cooperation, and information are part of ______ related currencies.  A. Task B. Position C. Inspiration D. Relationship E. Personal

17. In terms of commonly traded organizational currencies, acceptance, personal support, and understanding are part of _______ related currencies.  A. Task B. Position C. Inspiration D. Relationship E. Personal

18. In terms of commonly traded organizational currencies, advancement, recognition, visibility, and networks are part of ______ related currencies.  A. Task B. Position C. Inspiration D. Relationship E. Personal

19. In terms of commonly traded organizational currencies, learning, ownership, and gratitude are part of ______ related currencies.  A. Task B. Position C. Inspiration D. Relationship E. Personal

20. In mapping dependencies for a project, the project manager should:  A. Overestimate B. Underestimate C. Precisely estimate D. Either B or C are correct E. None of these are correct

21. Which of the following is used at Hewlett-Packard for building relationships with key players that will determine a project's success?  A. MBO B. MBA C. GIGO D. MBWA E. PMI

22. In the Snapshot from Practice "Managing Expectations", one of the key aspects to project success was stated to be the managing of stakeholder:  A. Relations B. Expectations C. Involvement D. Influence E. Input

23. In the Research Highlight, Ancona and Caldwell identified key patterns of activity which contribute to creating a high performance team. Which of the following is not one of those?  A. Negotiator B. Ambassador C. Task coordinator D. Scouts E. Guard

24. Which of the following is not one of the aspects of leading by example?  A. Priorities B. Ethics C. Urgency D. Cooperation E. Power

25. The traits of successful project managers include all of the following except:  A. Pessimist B. Proactive C. Skillful politician D. Effective time management E. Personal integrity

26. Unlike project leadership, project management is about coping with:  A. Change B. Aligning people to any new directions C. Monitoring results against plans D. Recognizing the need to alter plans E. All of these are part of project management

27. In a survey of project managers, approximately what percentage reported that they encountered ethical issues in their work?  A. 22 percent B. 40 percent C. 65 percent D. 81 percent E. 100 percent

28. The key to exercising influence is:  A. To make few mistakes B. To build trust C. To build a network of top level people D. To understand the political connections within the organization E. To make friends with everyone

29. Which of the following is not one of the distinguishing traits of character?  A. Openness B. Consistency C. Empathetic D. Sense of purpose E. Hard work

30. Which of the following would be defined as the ability or skill to perceive, assess and manage the emotions of one 's self and others?  A. Emotional stability B. Coolness under pressure C. Emotional intelligence D. Empathy E. Management sensitivity

31. Management is about coping with complexity; ________ is about coping with change.  ________________________________________

32. A popular metaphor for the role of a project manager is that of ________.  ________________________________________

33. ________ naturally compete with each other for resources and the support of top management.  ________________________________________

34. ________ champion the project and uses their influence to gain approval of the project.  ________________________________________

35. ________ define the scope of the project, and ultimate project success rests in their satisfaction.  ________________________________________

36. Networks are mutually beneficial alliances that are generally governed by the law of ________.  ________________________________________

37. In the organizational currency of _______ related influence comes directly from the project manager's ability to contribute to others accomplishing their work.  ________________________________________

38. In the organizational currency of _______ related influence comes directly from the project manager's ability to enhance others' positions within the organization.  ________________________________________

39. Perhaps the most powerful form of organization currency is based upon ________.  ________________________________________

40. The essence of the ________ related form of organization currency is forming a relationship that transcends normal professional boundaries and extends into the realm of friendship.  ________________________________________

41. The ______ related form of organization currency deals with individual needs and an overriding sense of self-esteem.  ________________________________________

42. In building a social network it is always better to ________ the dependencies on which the success of a project is based.  ________________________________________

43. In the ________ style of management, managers spend the majority of their time outside their offices.  ________________________________________

44. All stakeholders have ________ about the schedule, cost, and project benefits that the project manager needs to listen for, understand, and manage.  ________________________________________

45. Research consistently points out that project success is strongly affected by the degree to which a project has the support of ______.  ________________________________________

46. The Ancona and Caldwell research identified ________ activities as aimed at representing the team to others and protecting the team from interference.  ________________________________________

47. The Ancon and Caldwell research identified ________ activities as those where the manager goes out from the team to bring back information about what else is going on in the organization.  ________________________________________

48. In the ________ management style, the project manager's behavior symbolizes how other people should work on the project.  ________________________________________

49. In a survey of project managers, 81 percent reported that they encounter ________ issues in their work.  ________________________________________

50. Successful project managers not only need to be influential, they also need to exercise influence in a manner that builds and sustains the ________ of others.  ________________________________________

51. We must have confidence in the ____________ of individuals before we really trust them.  ________________________________________

52. Project managers have to see _________________ and how their project fits within the larger strategy of their firm.  ________________________________________

53. The ability or skill to perceive, assess and manage the emotions of one 's self and others is called ____________.  ________________________________________

54. Strong leadership, while usually desirable, is not always necessary to successfully.  True False

55. The higher the degree of uncertainty encountered on a project, the more management is required.  True False

56. A popular metaphor for the role of a project manager is that of a sports coach.  True False

57. Successful project managers tend to adopt a hands-on approach to managing projects.  True False

58. One of the things that distinguish project management from regular management is the sheer breadth and complexity of the relationships that need to be managed.  True False

59. In some projects contractors may do all the work with the project team merely coordinating their contributions.  True False

60. One advantage of creating a dedicated project team is that it reduces dependencies, especially within the organization.  True False

61. A successful project manager must build a cooperative, mutually beneficial network based on the age-old maxim: "Quid pro quo."  True False

62. Relationship-related currencies include: resources, cooperation, assistance, and information.  Refer to Table 10.1  True False

63. Position-related currencies include: vision, excellence, and ethical correctness.  Refer to Table 10.1  True False

64. Personal-related currencies include: challenge/learning, ownership/involvement, and gratitude.  Refer to Table 10.1  True False

65. Position-related currencies include: advancement, recognition, visibility, and network/contacts.  Refer to Table 10.1  True False

66. The first step to building a social network is identifying those on whom the project depends for success.  True False

67. Many poor-performing project managers are guilty of management by wandering around.  True False

68. Good time management for project managers includes initiating contact with key stakeholders only when there is a valid issue to deal with.  True False

69. "Guard" activities, as defined by Ancona and Caldwell, are aimed at representing the project team to others and protecting the team from interference.  Refer to Research Highlight Page 352  True False

70. "Ambassador" activities, as defined by Ancona and Caldwell, are aimed at going out from the team to bring back information about what is going on elsewhere in the organization.  Refer to Research Highlight on page 352  True False

71. When giving a status report to superiors, project managers must present the most positive image possible including, if necessary, stretching the truth.  True False

72. To be effective, project managers must "walk the talk", i.e.; lead by example.  True False

73. In a survey of project managers, more than 81 percent reported that they encounter ethical issues in their work.  True False

74. Character alone will engender trust.  True False

75. One problem new project managers experience is that it takes time to establish a sense of character and competency.  True False

76. The ability or skill to perceive, assess and manage the emotions of one 's self and others is known as emotional intelligence.  Refer to Research Highlight on page 361  True False

77. "Managing a project and leading a project is essentially the same thing." Agree or disagree and support your conclusion.

78. "Strong leadership is not always necessary to successfully complete a project." Agree or disagree and support your conclusion.

79. Identify at least five of the typical group dependencies that project managers must manage.

80. Identify and briefly describe the five commonly traded organizational currencies.

81. What is "management by wandering around" and why would it be useful to project managers?

82. Identify and briefly describe the four patterns of activity identified by Ancona and Caldwell which lead to creating a high performance team.

83. Identify five of the six aspects of leading by example.

84. Identify and briefly discuss the key to exercising influence within an organization.

85. Identify five of the six contradictions that an effective project manger must face.

86. Identify five of the eight traits associated with being a successful project manager.

87. Identify and compare and contrast The old-fashioned view of managing projects and the new perspective of managing projects.

88. "All the eight traits of being a good project manager can be trained." Agree or Disagree and support your conclusion.

ch11

1. The essence of positive synergy can be found in the phrase:  A. Front of ship sink---back of ship sink B. There is no "I" in team C. Two heads are better than one D. The whole is greater than the sum of the parts E. If it doesn't kill you, it makes you stronger

2. Which of the following is commonly associated with high-performing project teams?  A. Risk taking is controlled and not allowed to jeopardize the overall project B. Roles and specific responsibilities are well-defined C. A degree of competition among team members is encouraged D. Mistakes are viewed as opportunities for learning E. All of these are associated with high-performing teams

3. During which stage of team development do members accept that they are part of a project group but resist the constraints that the project and the group put on their individuality?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

4. During which stage of team development do close relationships develop and the group demonstrates cohesiveness?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

5. During which stage of team development is the team fully functional and accepted?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

6. During which stage of team development is high performance not a top priority and team member emotions run from upbeat to depressed?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

7. During which stage of team development do team members try to find out what behaviors are acceptable and what performance expectations are?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

8. Sam is the coach of a high school soccer team and has noticed that some close relationships have formed as well as feelings of camaraderie and shared responsibilities for the team's success. Which stage of development is the team in?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

9. Roger is new-product project manager for a retail company. Recently the team has exhibited a high degree of conflict over who will control the group and how decisions will be made. Which stage of development is the team in?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

10. Tom is managing a project team responsible for erecting a new office building. He notices that team members are trying out different behaviors to see what is acceptable to the project and personal relations. Which stage of development is the team in?  A. Norming B. Storming C. Performing D. Adjourning E. Forming

11. Experience and research indicate that high-performance project teams are much more likely to develop under all the following conditions except:  A. Members are assigned to the project full time B. Members report solely to the project manager C. There are 10 or fewer members per team D. Team members are selected by their managers E. The project involves a compelling objective

12. In which of the following theories does the project group transition from a lower level to a higher level of performance about halfway through the project?  A. Nominal Group Technique B. Five Stage Team Development Model C. Punctuated Equilibrium Model of Group Development D. Dysfunctional Transition Model E. Synergistic Transition Development Model

13. Which of the following are considered very important in the recruiting of project members?  A. The budget available B. The importance of the project C. The management structure for the project team D. Both B and C are correct E. A, B, and C are all correct

14. Which of the following is not one of the considerations that need to be factored into the project team recruitment process?  A. Political connections B. Problem-solving ability C. Ambition, initiative, and energy D. High degree of technological expertise E. Availability

15. Which of the following is an objective of the first project team meeting?  A. Overview the project's scope and objectives B. Address interpersonal interaction concerns C. Model how the team will work together D. Both A and C are correct E. A, B, and C are all correct

16. Which of the following is not one of the major issues that successful project managers must address in the early stages of a project?  A. Relationship Decisions B. Managing Change Decisions C. Tracking Decisions D. Planning Decisions E. All of these need to be addressed

17. Researchers have found that high performance teams will have which of the following norms?  A. Hard work does not get in the way of having fun B. No information is shared outside the team unless all agree to it C. It is acceptable to be in trouble, but not to surprise others D. Both B and C are correct E. A, B, and C are all correct

18. All of the following have been found to be good for running effective project meetings except:  A. Start meetings on time regardless of whether everyone is present B. Identify an adjournment time C. Thoroughly document all decisions D. Prepare and distribute an agenda prior to the meeting E. All of these are good for effective meetings

19. Establishing a team identity is facilitated by:  A. Team members working in a common space B. Creation of a project team name C. Effective use of meetings D. Both A and B are correct E. A, B, and C are all correct

20. The essential qualities of an effective vision include all of the following except:  A. All team members have the same vision B. The vision should be communicated to all C. The vision has to make strategic sense D. There should be a passion for the vision E. The vision should be a source of inspiration to others

21. Which of the following would be considered the most effective project reward?  A. Individual member rewards B. Lump-sum cash award C. All-expenses-paid trip for team members and their families D. Using negative reinforcement to motivate adequate performance E. All of these are equally effective

22. Individual rewards for outstanding work would not include:  A. Letters of commendation B. Public recognition C. Desirable job assignments D. Making exceptions to the rules E. All of these can be used for individual rewards

23. The first step in facilitating group decision making is to:  A. Call a meeting to discuss the problem B. Identify the problem C. Agree that there is a problem D. Quantify the problem E. Generate alternatives

24. Strategies to manage dysfunctional conflict do not include _____ the conflict.  A. Control B. Arbitrate C. Mediate D. Accept E. Encourage

25. The biggest challenge to managing a virtual project team is:  A. Getting reports and technical information communicated B. Developing trust C. Establishing effective patterns of communication D. Both B and C are correct E. A, B, and C are all correct

26. Which of the following is not one of the steps in facilitating group decision making?  A. Identifying the problem B. Analyzing the situation C. Generating alternatives D. Reaching a decision E. Follow-up

27. During the delivery phase of a project's life cycle, the most significant source of conflict is:  A. Schedules B. Priorities C. Technical D. Procedures E. Costs

28. Two of the biggest challenges involved in managing a virtual project team are:  A. The language barriers and time management B. Time management and developing trust C. The language barriers and developing effective patterns of communication D. Developing trust and effective patterns of communication E. Time management and developing effective patterns of communication

29. Symptoms of groupthink include:  A. The team thinking it is invincible B. Opinions of those outside the team are considered to be irrelevant C. Critical thinking disappears D. Pressure is applied to any dissenter E. All of these are symptoms of groupthink

30. Which of the following are ways to improve the performance of low-priority projects?  A. Creating a large time investment in the form of a lengthy meeting B. Interject as much fun as possible into the project C. Make the benefits of the project as real as possible to the team members D. Both B and C are correct E. A, B, and C are all correct

31. Which of the following is not one of the most significant sources of conflict during the project definition phase?  A. Priorities B. Administrative procedures C. Schedule D. Workforce E. Costs

32. Which of the following is not one of the most significant sources of conflict during the project planning phase?  A. Priorities B. Procedures C. Schedule D. Technical requirements E. Costs

33. Which of the following is not one of the most significant sources of conflict during the project execution phase?  A. Priorities B. Staff issues C. Schedule slippage D. Technical problems E. All of these are significant sources of conflict

34. Which of the following is not one of the tips for alleviating communication problems of virtual teams?  A. Include face-to-face time if at all possible B. Keep team members informed on how well the overall project is going C. Share the pain D. Establish clear norms and protocols for surfacing assumptions and conflicts E. Establish a code of conduct to avoid delays

35. ________ occurs when the whole is less than the sum of its parts.  ________________________________________

36. During the ________ stage of group development, there is conflict over who will control the group and how decisions will be made.  ________________________________________

37. During the ________ stage of group development, the members try to find out what behaviors are acceptable to the team and individual team members.  ________________________________________

38. During the ________ stage of group development, the team prepares for its own disbandment.  ________________________________________

39. During the ________ stage of group development, close relationships develop and the group demonstrates cohesiveness.  ________________________________________

40. During the ________ stage of group development, the team is fully functional and working together to accomplishing the project goals.  ________________________________________

41. The ________ suggests that about midway through a project the team transitions into a different behavior pattern more focused on the successful completion of the project.  ________________________________________

42. Experienced project managers stress the importance of ________ rather than appointing team members.  ________________________________________

43. Too often when constrained by time, project managers try to accomplish too much during the first meeting, rather than use the ________ principle and not create information overload.  ________________________________________

44. _______ are often considered anathema to productivity, yet they are critical to the success of any project.  ________________________________________

45. Symbolic actions at the project level can contribute to a unique team subculture are called ________.  ________________________________________

46. In the Snapshot from Practice involving the Tallahassee Democrat newspaper, the key turning point was the handling of an advertisement, eventually known as the ________ that had been sent to the newspaper over a fax machine.  ________________________________________

47. The development of _________________ is a common device for making a team more tangible.  ________________________________________

48. Expressing the design concept of a new car as a "pocket rocket" (a sports car in the mid-price range) is an example of a simplified ________.  ________________________________________

49. Project managers are responsible for managing the ________ that encourage team performance and extra effort.  ________________________________________

50. The use of 6:30 A.M. meetings to get a project back on schedule is an example of ______ reinforcement to motivate project performance.  ________________________________________

51. ________ should be used when strong commitment to a decision is needed and there is a low probability of acceptance if the decision were to be made by one person.  ________________________________________

52. When the manager intervenes and tries to negotiate a resolution by using reasoning and persuasion, suggesting alternatives and the like the Project Manager is trying to ___________.  ________________________________________

53. In the ________ approach to managing conflict, the manager imposes a solution to the conflict after listening to each party.  ________________________________________

54. In a ________ project team the members are geographically situated so that they may seldom meet face-to-face as a team.  ________________________________________

55. ___________ refers to whether a team has direct influence over the problem that needs to be resolved.  ________________________________________

56. When a project team gets things done without having to go through normal protocols of the parent organization, it may fall into the ____________.  ________________________________________

57. Project managers should encourage ___________ conflict.  ________________________________________

58. Project managers should manage ___________ conflict.  ________________________________________

59. In order to match technology to the communication need, 3M developed guidelines to be used on __________ projects.  ________________________________________

60. Synergy can be both negative as well as positive.  True False

61. There is a high degree of internal conflict in the forming stage of team development.  True False

62. The storming stage of team development is completed once members begin to think of themselves as part of a group.  True False

63. The performing stage of team development is characterized by the development of close relationships and group cohesiveness.  True False

64. The norming stage of team development is complete when the group establishes a common set of expectations about how members should work together.  True False

65. Regardless of the type of work group, the adjourning stage of team development is the final stage.  True False

66. The Punctuated Equilibrium Model of group development has only two phases with a single transition joining them.  True False

67. A project manager should always look for people with good problem-solving ability.  True False

68. A project manager should be wary of people who know too much about a specific technology.  True False

69. Co-location of team members, team names, and team rituals are common vehicles for establishing a team identity.  True False

70. A project vision is an image a project team holds in common about how the project will look upon completion, how they will work together, and how customers will accept the project.  True False

71. Everyone on the project team should have the same vision of the project.  True False

72. Most project managers advocate the use of group rewards rather than individual rewards.  True False

73. Lump-sum cash bonuses are the preferred group reward for project teams.  True False

74. Letters of commendation, public recognition for outstanding work, and desirable job assignments are the preferred types of individual rewards.  True False

75. Group decision making should be used when strong commitment to the decision is needed and there is a low probability of acceptance if only one person makes the decision.  True False

76. A project manager should identify a problem in terms of its alternate solutions so that team members can more easily reach a decision on how to solve the problem.  True False

77. Team members can be upset and dissatisfied with conflict, but as long as the disagreement furthers the objectives of the project, then the conflict is functional.  True False

78. A project manager arbitrates conflict by intervening and attempting to negotiate a resolution by using reasoning and persuasion, suggesting alternatives and the like.  True False

79. Groupthink refers to the tendency of members in highly cohesive groups to lose their critical evaluative capabilities resulting in quick decision making with little consideration of alternatives.  True False

80. Two of the biggest challenges involved in managing a virtual project team are developing trust and effective patterns of communication.  True False

81. "Going native" is the ability that some project teams have to bypass the normal policies and procedures that everyone in the organization is supposed to follow.  True False

82. In order to match technology to the communication need, IBM developed a set of guidelines to be used on their virtual projects.  True False

83. Identify the four major areas for establishing ground rules on how the project team will operate.

84. Identify and briefly discuss the four elements to establishing a team identity.

85. Identify the four requirements for an effective project vision.

86. Identify and briefly discuss the four types of individual rewards recommended for project team members.

87. Identify and briefly discuss the four major steps in facilitating the group decision making process.

88. What is functional conflict and why should it be encouraged?

89. Identify the five strategies to manage conflict.

90. What is a virtual project team?

91. What is meant by the term groupthink and identify four symptoms?

92. From the perspective of project management, what does the term going native reference?

93. What is the bureaucratic bypass syndrome and why is it to be avoided?

94. Identify and briefly describe the four common pitfalls that project teams may be subjected to.

ch12

1. Contracting project work has long been the norm in the _______ industry.  A. Telecommunications B. Financial C. Insurance D. Construction E. Retail

2. The process for the transferring of business functions or processes to other, often foreign, companies has traditionally been known as:  A. Subcontracting B. Downsizing C. Partnering D. Joint venture E. Outsourcing

3. When you call your Internet provider to solve a technical problem and you end up talking to a technician in India or Romania, you have just experienced:  A. Telecommunications B. Partnering C. Outsourcing D. Service shift E. Bilingual customer service

4. Which of the following is not a potential part of the outsourcing concept?  A. Computers B. Faxes C. Computer-aided design systems D. Video teleconferencing E. All the above are correct

5. Advantages of outsourcing project work may likely include all of the following except  A. Shortened project completion B. Reduced costs C. Higher level of expertise D. Reduced conflict E. Increased flexibility

6. Disadvantages of outsourcing project work may likely include all of the following except  A. Increased conflict B. Coordination breakdowns C. Increased costs D. Loss of control E. More internal morale issues

7. The driving motive for increasing the use of outsourcing on projects was:  A. Reducing the trade deficit B. Reducing costs C. Improving international sales D. Making products more international in design E. Securing technology that was not available domestically

8. Recent outsourcing trends have shown an increasing emphasis on the suppliers for all of the following except:  A. Further cost reductions B. Increased quality of work performed C. Increased ability to collaborate D. Increased ability to work together E. All of these are recent trends

9. Key practices in partnering relationships include:  A. Single project contracting B. Goals and objectives are similar C. Access to each other's organizational resources D. Both B and C are correct E. A, B, and C are all correct

10. In the "Competing against the Giants" Snapshot from Practice, SATT Control uses which of the following to successfully compete against much larger competitors?  A. Excellent project management B. Acts as a system integrator C. Using the same subsystem vendors again and again D. Both A and B are correct E. A, B, and C are all correct

11. Which of the following is not a key to successful partnering relationships?  A. Mutual trust B. Jointly shared risk C. Total company involvement D. Independent project teams E. Long-term commitment

12. Which of the following is part of the traditional project process?  A. Structured communications B. Long-term commitment C. Total company involvement D. Both A and B are correct E. A, B, and C are all correct

13. The traditional project process includes all of the following except:  A. Independent project teams B. Shared goals and objectives C. Single project teams D. Risk is transferred to the other party E. Limited objectivity

14. Which of the following did the state of Ohio do before starting a bond-financed school construction project?  A. Create a specific RFP (request for proposal) B. Have a dress rehearsal C. Reviews the performance of contractors on past projects D. Both A and C are correct E. A, B, and C are all correct

15. Best practices in outsourcing project work include all the following except:  A. Well defined requirements and procedures B. Training and teambuilding activities C. Well established conflict management processes D. Frequent reviews and status updates E. All of these are best practices

16. In the Snapshot from Practice "Strategies for Communicating with Outsourcers," which of the following was not one of the suggested strategies?  A. Recognize cultural differences B. Use a translator to make sure everyone understands C. Choose the right words D. Confirm your requirements E. Set deadlines

17. To make sure that an outsourcer thoroughly understands your requirements you should:  A. Document your conversations in writing B. Insist that the outsourcer write the requirements in their own words C. Request they build a prototype D. Both A and C are correct E. A, B, and C are all correct

18. The result of teambuilding among the project's participants is a:  A. Signed contract B. Legal partnership agreement C. Project plan D. Partnering charter E. Responsibility matrix

19. To avoid problems with schedules and deadlines you should:  A. Develop detailed schedules B. Hold frequent status reviews C. Add a penalty clause to the contract D. Hold frequent conversations with the outsourcer E. Build extra time into the schedules that the outsourcer is not aware of

20. Among the many advantages for establishing long-term partnerships are:  A. Reduced administrative costs B. Improved performance C. Improved communication D. B and C are both correct E. A, B, and C are all correct

21. Long-term partnerships will provide all the following except:  A. Improved communication B. More efficient utilization of resources C. Reduced need for total number of partnerships D. Lower administrative costs E. Improved innovation

22. Teambuilding between partners should:  A. Include engineers, architects, lawyers, specialists and other staff B. Be facilitated by an outside consultant C. Not take more than one day D. A and B are both correct E. A, B, and C are all correct

23. Which of the following would be included in best practices in outsourcing project work?  A. Establishing long-term relationships B. Include financial incentives C. Reduce costs by using tried and true methods D. A and B are both correct E. A, B, and C are all correct

24. In the Snapshot from Practice dealing with the Value Engineering Awards program, which branch of the U.S. government was involved?  A. Department of Defense B. Department of Commerce C. Department of Transportation D. N.A.S.A E. Department of Education

25. Which of the following is not one of the key points of principled negotiation?  A. Use objective criteria when possible B. Be honest and forthright C. Focus on interests, not positions D. Separate the people from the problem E. Invent options for mutual gain

26. Customer satisfaction can be quantitified by:  A. Perceived performance divided by actual performance B. Actual performance divided by expected performance C. Perceived performance divided by expected performance D. Actual performance divided by perceived performance E. Expected performance divided by actual performance

27. Which of the following is a part of the noncompetitive view of negotiation?  A. Reaching an agreement B. Implementation phase C. Review of the completed project D. Both A and B are correct E. A, B, and C are all correct

28. Which of the following is suggested as the best target for a customer satisfaction ratio?  A. 1.00 B. 1.05 C. 1.10 D. 1.20 E. 1.50

29. In the research highlight on IT project managers, which of the following was not one of the roles taken by project managers?  A. Entrepreneur B. Politician C. Friend D. Marketer E. Auditor

30. Regarding customer relations, advice passed on by veteran project managers includes:  A. Speak with one voice B. Speak in precise terms C. Speak the language of the customer D. Both A and B are correct E. Both A and C are correct

31. Which of the following is not one of the elements of good negotiation?  A. Be hard on the problem, soft on the people B. Conflict on a project can be good C. Negotiation is not a contest D. Seek first to understand, then to be understood E. All of these are elements of good negotiation

32. Which of the following is reflected in the saying "Let anger fly out the window"?  A. Separate people from the problem B. Be honest C. Focus on interests, not positions D. Invent options for mutual gain E. When possible, use objective criteria

33. Which of the following is reflected in the saying "Seek first to understand, then to be understood"?  A. Separate people from the problem B. Be honest C. Focus on interests, not positions D. Invent options for mutual gain E. When possible, use objective criteria

34. The dovetailing technique is used in which of the following keys to good negotiation?  A. Separate people from the problem B. Be honest C. Focus on interests, not positions D. Invent options for mutual gain E. When possible, use objective criteria

35. Contracting project work has long been the norm in the __________ industry.  ________________________________________

36. The __________ project, which created a transportation tunnel between France and England, involved more than 250 organizations.  ________________________________________

37. In a partnering relationship, ________ is shared jointly among the partners, which encourages innovation and continuous improvement.  ________________________________________

38. In a partnering relationship, ________ forms the basis for strong working relationships.  ________________________________________

39. In traditional project relationships, ________ is limited due to fear of reprisal and lack of continuous improvement opportunity.  ________________________________________

40. In traditional project relationships, ________ are structured and guarded.  ________________________________________

41. In Ohio before starting a bond-financed ____________, projects management consultants and the related parties get together to figure out how to talk to each others and how to handle problems.  ________________________________________

42. The term __________ has traditionally been applied to the transferring of business functions or processes to other, often foreign, companies.  ________________________________________

43. Many outsourced projects operate in a _________ environment in which people are linked by computers, faxes, computer-aided design systems, and video teleconferencing.  ________________________________________

44. __________ is a major advantage of outsourcing project work because companies can secure competitive prices for contracted services, especially if the work can be outsourced offshore.  ________________________________________

45. Not only can contracted project work be cheaper, it can also be done __________.  ________________________________________

46. High levels of __________ and technology can be brought to bear on a project by using contracted services.  ________________________________________

47. Contracting project services can increase a firm's _________ by no longer being constrained by their own resources.  ________________________________________

48. Breakdowns in __________ of professionals from different organizations can occur if the project work requires close collaboration and mutual adjustment.  ________________________________________

49. In the Snapshot from Practice involving SATT Control, a Swedish electronics firm, the company referred to one of its competencies as being a ________ who subcontracts the subsystems to other firms.  ________________________________________

50. There is a potential loss of __________ over a project when the core team depends on other organizations that they do not have direct authority over.  ________________________________________

51. Projects are more prone to interpersonal _________ because the different participants do not share the same values, priorities, and culture.  ________________________________________

52. There is little disagreement that __________ was the primary motive behind outsourcing project work.  ________________________________________

53. Fisher and Ury champion the ________ approach to negotiation because it emphasizes win/win solutions while protecting yourself against those who would take advantage of your forthrightness.  ________________________________________

54. ________ satisfaction is measured by the ratio of perceived performance to expected performance.  ________________________________________

55. The best defense against unreasonable, win/lose negotiators is having what Fisher and Ury call a strong __________.  ________________________________________

56. As part of an effort to cut costs the United States Department of Defense issues annual __________.  ________________________________________

57. "Let anger fly out of the window" is an example of the ___________ key point of negotiation.  ________________________________________

58. Explaining why a critical task must be done by a specific time is an example of the ___________ key point of negotiation.  ________________________________________

59. Dividing perceived performance by expected performance will calculate __________.  ________________________________________

60. Toyota and Daimen-Chrysler collaborating with suppliers to develop new automobile platforms is an example of outsourcing.  True False

61. Participants from different organizations working close together at the construction site or in shared office space is an example of a virtual team.  True False

62. Working in outsourcing teams, projects can be completed faster and more cheaply.  True False

63. Increased conflict and loss of coordination are typical disadvantages of outsourcing project work.  True False

64. Trust can be difficult to forge when interactions are limited and people come from different organizations.  True False

65. In partnering, access to each other's organization resources is available.  True False

66. In the traditional method of managing projects, total company involvement requires commitment from CEO to team members.  True False

67. In partnering, each party's goals and objectives are similar but geared to what is best for them.  True False

68. As part of an effort to cut costs, the United States Department of Defense issues annual Value Engineering Awards.  True False

69. In some countries, laws are considered to be guidelines that are not necessarily followed.  True False

70. For people in some countries, a written, signed contract is merely a suggestion.  True False

71. Because English is the language of business, it is not necessary to speak in a direct manner using short sentences made of basic, simple words as this may taken as an insult.  True False

72. All conversations with outsourcers should be followed up with commitments documented in writing since they are likely to understand written English better than spoken English.  True False

73. Experience indicates that co-location of project teams is not worth the extra costs.  True False

74. A partnering charter states the common goals for the project as well as the procedures that will be used to achieve these goals.  True False

75. It is a good idea to add a penalty clause to an outsourcing agreement because deadlines are often taken as a suggestion rather than a commitment.  True False

76. A prime consideration in choosing outsourcing vendors is to assess the fit with their project management system.  True False

77. Team-building workshops with outsourcing vendors is usually led by an outside consultant who is an expert in designing and facilitating such workshops.  True False

78. In project negotiation each negotiator is out to win as much as he or she can for their side.  True False

79. Principled Negotiation emphasizes developing win/win solutions while protecting yourself against those who would take advantage of your forthrightness.  True False

80. By keeping the focus on the issues and not the personalities, negotiators are better able to let the other person blow off steam.  True False

81. The best defense against unreasonable, win/lose negotiators is having what Fisher and Ury call a strong BATNA.  True False

82. A value of 1.5 is the accepted target for the Met-Expectations model of customer satisfaction.  True False

83. What is partnering and why has it become popular for managing projects?

84. Identify the four advantages to outsourcing project work.

85. Discuss how key practices in partnering relationships vary with those in traditional practice for 1. working relationships, 2. goals, and 3. communications.

86. Discuss how key practices in partnering relationships vary with those in traditional practice for 1. risk, 2. length of commitment, and 3. structure of project teams.

87. Identify the four strategies offered by Dr. Adam Kolawa for overcoming poor communication with outsourcers.

88. Identify the three steps you should take to confirm that the outsourcer thoroughly understands your requirements.

89. "Team-building is nice to have for a project, but we really need to concentrate on the planning and technical challenges—that is the make-or-break point for this project." Agree or disagree? Support your answer.

90. What is principled negotiation and what are the four key points it is based upon?

91. What is negotiation jujitsu?

92. Describe the Met-Expectations Model of Customer Satisfaction including the formula to calculate it.

93. In the research highlight on IT project managers, different roles that are critical to the success of the project manager were discussed. Identify each of the five roles and briefly discuss them.

94. In terms of Fisher and Ury's approach to negotiation, what is a BATNA and why is it important?

ch13

1. A project monitoring system involves all of the following except:  A. Determining what date to collect B. Determining how, when, and who will collect the data C. Adjusting the data D. Analysis of the data E. Reporting current progress

2. Adequate project controls have the advantage(s) of:  A. Holding people accountable B. Prevents small problems from getting large C. Keeping focus D. Both A and B are correct E. A, B, and C are all correct

3. A typical project progress report would contain all of the following sections except:  A. Progress since last report B. Problems and issues since last report C. Current status of project D. Corrective action planned E. All of these are typical sections

4. The first step in the project control process of the measurement and evaluation of project performance is to  A. Set a baseline plan B. Determine the project objectives C. Determine the project deliverables D. Analyze the project budget E. Review the project priority matrix

5. The second step in the project control process of the measurement and evaluation of project performance is to:  A. Review the baseline plan with top management B. Analyze inputs to control system C. Compare plan against actual D. Measure progress and performance E. Review spending with team members

6. The third step in the project control process of the measurement and evaluation of project performance is to:  A. Review the baseline plan with top management B. Analyze inputs to the control system C. Compare the plan against actual performance D. Measure both progress and performance E. Review spending with team members

7. The last step in the project control process of the measurement and evaluation of project performance is to:  A. Take appropriate action B. Prepare a report to top management C. Follow up on corrective action D. Measure progress and performance E. Review spending with team members

8. In monitoring project time (schedule) performance actual performance should be compared to:  A. Budgets for the current year B. Top management's targets C. Project network schedule derived from the WBS/OBS D. Progress on similar past projects E. Previous status reports

9. A typical tool used to communicate project status is a:  A. Project network diagram B. Gantt Chart C. A PERT chart D. Both A and B are correct E. A, B, and C are all correct

10. A tool used to monitor past project schedule performance, current performance, and to estimate future schedule trends is a simple line chart known as a:  A. Project schedule control chart B. Gantt chart C. PERT chart D. Network diagram E. Milestone chart

11. An Earned Value System used to monitor project progress includes comparison of  A. Actual costs versus budget B. Schedule progress versus plan C. Quality progress versus plan D. Both A and B are correct E. A, B, and C are all correct

12. The earned value of a project is the:  A. Project cost to date adjusted for project scope changes B. Total project cost to date C. Cost incurred minus the planned cost D. Percent of the original budget that has been earned by actual work E. None of these are correct

13. The cost variance for a project is calculated by:  A. EV-AC B. AC-SV C. PV-EV D. CU-EV E. EU-PV

14. The schedule variance for a project is calculated by:  A. EV-AC B. AC-SV C. PV-EV D. CU-EV E. EV-PV

15. Baseline project budgets are derived from:  A. The organization's overall budget B. Time-phasing the work packages C. Top management directions D. Both A and C are correct E. A, B, and C are all correct

16. Of the following costs, which are not included in baseline?  A. Materials B. Equipment C. Labor D. A and C but not B E. All of these are usually included

17. The method most frequently used in measuring project progress is the  A. 0/100 percent rule B. 75/25 percent rule C. 50/50 percent rule D. 25/75 percent rule E. Percent complete rule

18. Generally the method for measuring accomplishments centers on comparing  A. Earned value with the expected schedule value B. Earned value with the actual costs C. Actual costs with budgeted costs D. Both A and B are correct E. A, B, and C are all correct

19. Which of the following are required to assess the current status of a project using the earned-value cost/schedule system?  A. BAC, EAC, and ETC B. VAC, EAC, and BAC C. CV, SU, and BAC D. PV, EV, and AC E. TCPI, EV, and PV

20. Which of the following methods of variance analysis is the best indicator of how far off the budget a project will be at completion?  A. BAC B. EAC C. ETC D. VAC E. TCPI

21. Which of the following methods will measure the cost efficiency of the work accomplished to date?  A. SV/CV B. EV/PV C. EV/AC D. AC/SV E. AC/CV

22. Which of the following methods will measure the scheduling efficiency of the work accomplished to date?  A. SV/CV B. EV/PV C. EV/AC D. AC/SV E. AC/CV

23. An index value less than one indicates that the project is  A. Under cost or behind schedule B. Over cost or ahead of schedule C. Under cost or ahead of schedule D. Over cost or behind schedule E. On cost or on schedule

24. Scope creep affects:  A. The organization B. The project team C. The project suppliers D. Both A and B are correct E. A, B, and C are all correct

25. Small refinements that eventually build to be major changes are known as:  A. Project erosion B. Scope creep C. Specification adjustments D. Specification refinements E. Continuous improvements

26. The percent complete index that looks at percent complete in terms of budgeted amounts is calculated by which of the following?  A. EV/BAC B. (EV-PV)/BAC C. AC/EAC D. (EV-AC)/BAC E. (EV-PV)/EAC

27. The percent complete index that looks at percent complete in terms of actual amounts is calculated by which of the following?  A. EV/BAC B. (EV-PV)/BAC C. AC/EAC D. (EV-AC)/BAC E. (EV-PV)/EAC

28. Which of the following will calculate the estimated cost to complete the project?  A. (VAC-EV)/(PV/AC) B. (BAC-EV)/(EV/AC) C. (PV/AC)/(VAC-EV) D. (EV/AC)/(BAC-EV) E. (BAC-EV)/(BAC-AC)

29. Which of the following will calculate the To Complete Performance Index?  A. (VAC-EV)/(PV/AC) B. (BAC-EV)/(EV/AC) C. (PV/AC)/(VAC-EV) D. (EV/AC)/(BAC-EV) E. (BAC-EV)/(BAC-AC)

30. Which of the following is not true regarding scope creep?  A. It is common late in projects B. It is frequently unnoticed until time delays or cost overruns are observed C. It wears down team motivation and cohesiveness D. Project suppliers resent frequent changes E. All of these are true

31. ________ holds people accountable, prevents small problems from mushrooming into large problems, and keeps focus.  ________________________________________

32. The first step in creating a project control system for measuring and evaluating project performance is to ________.  ________________________________________

33. A concept of ________ is necessary to get a realistic estimate of performance against a time-phased budget.  ________________________________________

34. Usually status reports should take place every ________ weeks to be useful and allow for proactive correction.  ________________________________________

35. Because of their easy-to-understand visual format, ________ are the most favored, used, and understandable tool used to report project status.  ________________________________________

36. Control charts are frequently used to monitor progress toward ________, which mark events and as such have zero duration.  ________________________________________

37. The ________ is a tool used to monitor past project schedule performance and current performance and to estimate future schedule trends.  ________________________________________

38. The ________ is the difference between the earned value and the actual costs for the work completed to date.  ________________________________________

39. The ________ is the difference between the earned value to date and the baseline schedule.  ________________________________________

40. ________ is simply the percent complete, times the original budget.  ________________________________________

41. The best method for assigning costs to the baseline is to establish frequent __________ over the duration of the work package.  ________________________________________

42. When measuring percent complete in the monitoring phase of the project, it is common to limit the amount earned to __________ until the work package is 100 percent complete.  ________________________________________

43. The ________ is the rule most frequently used by practicing project managers to both assign costs to the baseline and to measure progress using earned value.  ________________________________________

44. Cost variance tells us if the ________ costs are more or less than was planned at any point over the life of the project.  ________________________________________

45. A positive variance in SV or CV indicates a ________ condition.  ________________________________________

46. The units of measure for SV or CV is in terms of ________.  ________________________________________

47. CPI and SPI are two types of indexes that measure ________.  ________________________________________

48. The ________ indexes compare the to-date progress to the end of the project.  ________________________________________

49. An SPI index of 1.22 indicates that the project is ________ schedule.  ________________________________________

50. Although it is very difficult to measure, measuring ________ performance is as important as measuring schedule and cost performance.  ________________________________________

51. The best defense against scope creep is a __________.  ________________________________________

52. The PCIB index measures the project percent complete in relation to the resources that were budgeted.  True False

53. The PCIC index measures the project percent complete in relation to the resources that have actually been used so far on the project.  True False

54. Control is one of the most neglected areas of project management.  True False

55. Measuring performance against budget is simply a case of comparing actual versus budget.  True False

56. Earned value is defined as the budgeted cost of the work performed.  True False

57. The baseline is derived from merging information from the work packages with the project network.  True False

58. The network chart is the most favored, used, and understandable option for reporting project progress to upper management.  True False

59. In a project control chart, four observations trending in one direction indicate there is a very high probability that there is an identifiable cause.  True False

60. Milestones are significant project events that mark major accomplishments.  True False

61. The best method for assigning costs to the baseline under this rule is to establish frequent checkpoints over the duration of the work package and assign completion percentages in dollar terms.  True False

62. The original earned value cost/schedule system was pioneered by the U.S. Department of Defense in the 1960s.  True False

63. Earned value is calculated by taking the percent complete times the original budget.  True False

64. Baseline costs typically include labor, equipment, materials and direct overhead cost.  True False

65. Overhead costs and profit are typically included in the project baseline.  True False

66. The major reasons for creating a baseline are to monitor and report progress and to estimate cash flow.  True False

67. In calculating schedule variance and cost variance, a negative variance indicates a desirable condition, and a positive variance suggests problems.  True False

68. An undesirable schedule variance indicates that the project is running behind schedule.  True False

69. Cost variance tells us the different estimates among vendors needed to complete the project over the life of the project.  True False

70. A CPI index of 0.97 indicates that the project has spent less money than budgeted.  True False

71. One method of estimating the costs to complete a project is to divide the work remaining by the CPI.  True False

72. All scope changes that result in increased costs should be avoided.  True False

73. Scope Creep refers to any significant changes made in the project once it is underway.  True False

74. The key to managing scope creep is change management.  True False

75. The best defense against scope creep is accepting only major changes.  True False

76. The rule of using subjective estimated percent complete in combination with hard, tangible monitoring points works well on long-duration activities that can be broken into short discrete work packages.  True False

77. Identify the steps in creating a control process that measure and evaluate project performance.

78. What is the difference between a baseline Gantt chart and a Tracking Gantt chart?

79. Identify and briefly describe the three percent complete rules for placing costs in baselines.

80. Conducting an earned value analysis requires three data elements. Identify the acronyms for each and describe what they are.

81. In reviewing the budget report of a project, you notice that spending on the project is running about ten percent over plan. Is the project in trouble? Why or why not?

82. Interpret the results of calculating the performance indexes based on a range of possible calculated values.

83. Identify the four indexes used in project management control and identify the formulas for calculating the indexes.

84. Identify and briefly discuss the two methods to revise estimates of future project costs.

85. What are Weighted Monitoring Gates and why would you need them?

86. What is scope creep and why should a project manager be concerned about it?

87. Typically, project progress reports are designed and communicated in written or oral form. Identify the common topic format for such progress reports.

88. Briefly describe the general structure of a project monitoring information system for control.

ch14

1. The most common circumstance for project closure is simply a ________ project.  A. Completed B. Overdue C. Overbudget D. Under achiveing E. All the above are correct

2. What is not a wrap-up closure activity?  A. Facilities B. Vendors C. Customer D. Profit report E. Report

3. __________ of lessons learned are designed to improve performance on current and future projects.  A. Retrospectives B. Corrective action plans C. Introspective D. Culmination E. Evolution

4. The content of the final report typically includes the following topics:  A. Lessons learned B. Review and analysis C. Recommendations D. Executive summary E. All the above are correct

5. When the project may be completed early with some parts of the project eliminated this is considered to be ___________ closure.  A. Normal B. Premature C. Perpetual D. Changed Priority E. Failed Project

6. This type of closure occurs when the project may never seem to end. This is considered to be ___________ closure.  A. Normal B. Premature C. Perpetual D. Changed Priority E. Failed Project

7. Many projects will fail because of circumstances beyond the control of the project team is called:  A. Normal B. Premature C. Perpetual D. Failed Project E. Changed Priority

8. When a project may start with a high priority but see its rank erode or crash during its project life cycle as conditions change this is an example of:  A. Normal B. Premature C. Perpetual D. Failed Project E. Changed Priority

9. Implementing closedown includes the following major activities except:  A. Getting delivery acceptance from the customer. B. Shutting down resources and releasing to new uses. C. Closing accounts and seeing all bills are paid. D. E-mail the project team that the project is complete. E. Creating a final report.

10. Which is not part of the team portion of the Wrap-up closure checklist?  A. Has a schedule for reducing project staff been developed and accepted? B. Has staff been offered outplacement services and career counseling activities? C. Have performance reviews for team members been conducted? D. Has staff been released or notified of new assignments? E. All are included.

11. Under which heading of the Wrap-up closure checklist should the question "Has an in-depth project review and evaluation interview with the customer been conducted?" be answered.  A. Team B. Vendors/contractors C. Customer/Users D. Equipment and facilities E. Profit and loss statement

12. Under which heading of the Wrap-up closure checklist should the question "Have project accounts been finalized and all billing closed?" be answered.  A. Team B. Vendors/contractors C. Customer/Users D. Equipment and facilities E. Profit and loss statement

13. Releasing the project team typically occurs _________ during the closure phase.  A. Gradually B. Rarely C. Without bombast D. Rapidly E. All at once

14. In the Snapshot from Practice, New Balls Goes Flat in NBA, is an example of a project gone wrong when the _______ is/are not consulted.  A. Manufacture B. Equipment and facilities managers C. End-users D. Project manager E. The Fans

15. Closing out _________ is often messy and filled with untied ends.  A. Project review meetings B. Reports C. Invoices D. Teams E. Contracts

16. Information on the project type, size, number of staff, and technology level would be included in which section of the audit report?  A. Analysis B. Recommendations C. Classification of project D. Lessons learned E. Strategic objectives

17. Project mission and objectives, procedures and systems used, and organization resources used typically appear in the _____ section of the final project report.  A. Analysis B. Recommendations C. Classification of project D. Lessons learned E. Strategic objectives

18. Items technical in nature and focus on solutions to problems that surfaced would typically appear in the _____ section of the final project report.  A. Analysis B. Recommendations C. Classification of project D. Lessons learned E. Strategic objectives

19. The section of the final project report that new project teams are likely to find most useful is the:  A. Analysis B. Recommendations C. Classification of project D. Lessons learned E. Strategic objectives

20. Corrective actions that should take place (such as shifting to more resilient building material) would typically appear in the _____ section of the final project report.  A. Analysis B. Recommendations C. Classification of project D. Lessons learned E. Strategic objectives

21. In the Snapshot from Practice, the results of analyzing the Katrina hurricane resulted in a new evaluation plan from:  A. The state legislature B. The governor of Louisiana C. The city of New Orleans D. The Red Cross E. The national guard

22. The most common circumstance for project closure is:  A. Premature completion with some features eliminated B. Project completion meeting costs, schedule, and quality C. Project completion after modification of costs, schedule, or quality D. Project termination due to technical difficulties E. Perpetual projects that seem to go on and on before completion

23. Project closures can fall into all of the following categories except:  A. Premature B. Perpetual C. Failed D. Changed priority E. All of these are categories for project closure

24. In the Research Highlight, Chaos: Software Projects, the criterion which was deemed the most important for project success was  A. Realistic expectations B. Hard-working, focused staff C. User involvement D. Proper planning E. Clear vision and objectives

25. ____________ begins with a review of the strategic intent of the project, selection criteria, project charter, project objectives, project scope, and acceptance criteria.  A. Process Review B. Project Overview C. Analysis D. Recommendations E. Directing

26. The typical mechanism for evaluation of teams is normally:  A. A survey completed by the team members B. A personal interview of each team member C. An analysis by an outside consultant D. A survey completed by members of top management E. A survey completed by the internal or external customers

27. More and more companies are discarding the traditional superior-subordinate performance feedback process and replacing it with:  A. Critical incidences review B. Management by objectives C. The 360-degree feedback D. Both B and C are correct E. A, B, and C are all correct

28. The project closure process includes all of the following except:  A. Shutting down resources and releasing to new uses B. Reassigning project team members C. Conduct an audit D. Getting delivery acceptance from the customer E. Closing accounts and seeing all bills are paid

29. In organizations where projects are managed within a ____________, the team member's area manager, not the project manager, is responsible for assessing performance.  A. Functional organization B. Matrix organization C. Flat organization D. Both A and C are correct E. A, B, and C are all correct

30. Performance evaluations of project teams should:  A. Provide the basis for individual development B. Provide the basis for participation on future projects C. Provide the basis for salary increases D. Both A and C are correct E. A, B, and C are all correct

31. ________ is the most common circumstance for project closure is simply a completed project.  ________________________________________

32. The project may be completed early with some parts of the project eliminated is known as _________.  ________________________________________

33. ____________ are usually easy to identify and easy for a review group to close down.  ________________________________________

34. Projects in process may need to be altered or canceled. Thus, a project may start with a high priority but see its rank erode or crash during its project life cycle as conditions change. This is called __________.  ________________________________________

35. A schedule for reducing project staff been developed and accepted is a question that is asked in the completion of the ___________.  ________________________________________

36. The summary simply highlights the key findings and facts relating to the project implementation is called the ___________.  ________________________________________

37. Some organizations have project closure checklists of over _____ wrap-up tasks!  ________________________________________

38. The ________ section of the final project report includes succinct, factual review statements of the project such as, project mission and objectives, procedures and systems used, and organizational resources used.  ________________________________________

39. Perhaps _________ are the most valuable contribution of the closure process.  ________________________________________

40. The ________ section of the final project report are often technical in nature and focus on solutions to problems that surfaced.  ________________________________________

41. A completed ___________ is a good example of the need to work out the details in advance.  ________________________________________

42. A project closure is considered ________ if it never seems to end due to constant "add-ons" in attempt to improve the project outcome.  ________________________________________

43. The purpose of ____________ is to assess how well the project team, team members, and project manager performed.  ________________________________________

44. The ________ feedback approach gathers anonymous feedback solicited from others is compared with the individual's self-evaluations, the individual may form a more realistic picture of her strengths and weaknesses.  ________________________________________

45. In some ____________, project managers conduct the performance reviews, while area managers are responsible for pay reviews.  ________________________________________

46. Project managers should be ________ giving team members feedback throughout the project so that individual team members can have a pretty good idea how well they have performed and how the manager feels before the formal meeting.  ________________________________________

47. The _________ of projects by characteristics allows prospective readers, teams, and project managers to be selective in the search and use of report content.  ________________________________________

48. The most common reason given for not creating lessons learned is _________.  ________________________________________

49. A ________ is a methodology that analyzes a past project event to determine what worked and what didn't, develops lessons learned, and creates an action plan that ensures lessons learned are used to improve management of future projects.  ________________________________________

50. _________ are binary; either you have reached requirements completion or you have not.  ________________________________________

51. The Standish Group International's market research on software projects, called Chaos showed that ___ percent of all software projects are cancelled before completion.  ________________________________________

52. A __________ is a guide who leads the project team through an analysis of project activities that went well, what needs improvement, and development of a follow-up action plan with goals and accountability.  ________________________________________

53. __________ represent an analysis carried out during and shortly after the project life cycle; they attempt to capture positive and negative project learning.  ________________________________________

54. An upbeat, festive celebration brings closure to the enjoyable experiences everyone has had and the need to say good-bye is considered to be a ____________.  ________________________________________

55. In a Perpetual project the most common circumstance for project closure is simply a completed project.  True False

56. In a Premature projects, the project may be completed early with some parts of the project eliminated.  True False

57. Retrospectives of lessons learned are designed to improve performance on current and future projects.  True False

58. When a project may start with a high priority but see its rank erode or crash during its project life cycle as conditions change this is an example of change changed priority.  True False

59. Part of the content of the final report typically includes profit made on the project.  True False

60. The project manager's challenge is to keep the project team focused on the remaining project activities and delivery to the customer until the project is complete.  True False

61. Implementing closedown includes getting delivery acceptance from the customer.  True False

62. Project Summary is the summary that simply highlights the key findings and facts relating to the project implementation.  True False

63. Analysis examines in detail the underlying causes of problems, issues, and successes.  True False

64. The ideal scenario is to have the team member's next assignment ready when project completion is announced.  True False

65. The maximum items on a checklist for closing a project are 50.  True False

66. Lessons learned from the Katrina disaster are not limited to the military. Almost every agency and support group, such as individuals, communities, churches, and other groups, has developed lessons learned from their project response experience.  True False

67. Evaluation of individuals implies measurement against all team members.  True False

68. Performance evaluations of project team members are typically well done because the evaluations are conducted by the team member's home department.  True False

69. The most common circumstance for project closure is simply a completed project such as building a new facility or creating a customized information system.  True False

70. A project closure where the project is completed early with some parts of the project eliminated would be classified as project failure.  True False

71. The key requirement in selection of the facilitator is one who is the end-user.  True False

72. Performance appraisals generally fulfill five important functions.  True False

73. Some organizations rely simply on an informal discussion between the project manager and the project member while other organizations require project managers to submit written evaluations that describe and assess an individual's performance on a project.  True False

74. A 360-degree performance evaluation includes feedback from peers, project managers, subordinates, and even customers.  True False

75. Project managers should, when possible, draw comparisons to other team members when conducting individual team member reviews.  True False

76. Retrospective methodology is one positive step toward ensuring lessons learned are developed and implemented.  True False

77. What are the six major activities implementing project closedown?

78. Identify the four areas of the project closure checklist.

79. Identify the three major deliverables for project closure.

80. How does the project managers meet the challenge to keep the project team focused on the remaining project activities and delivery to the customer until the project is complete?

81. Identify the five common parts to the final project report.

82. Identify and briefly describe the five most common classifications for the way that projects end.

83. List the five, distinguishing characteristics to ensure Retrospectives methodology embedded effectiveness and value?

84. How does Norman Kerth define retrospective in his text Project Retrospectives?

85. What guidelines should a project manager follow in conducting performance reviews?

86. What is a 360-degree feedback and how is it used?

87. In the Research Highlight "Measures of Team Performance," what was the major finding of the research survey?

88. Explain what Lessons learned represent.

ch16

1. The term that is used to reflect how organizations oversee their project management systems is:  A. Project administration B. Fiduciary responsibility C. Management D. Oversight E. Project regulation

2. Which of the following is not one of the techniques to insure that projects meet the needs of the organization?  A. Standards B. Procedures C. Accountability D. Controls E. All of these are correct

3. Which of the follow percentages is the authors' estimate of project-driven organizations that have been implementing some form of oversight for several years?  A. 95% B. 90% C. 85% D. 80% E. 75%

4. Typical activities of project oversight cover which of the following dimensions?  A. Organization B. Project C. Customer D. Both A and B are correct E. All the above are correct

5. Organizational options to cover every aspect of managing projects in the organization are currently achieved by all of the following except:  A. Executive committee B. Oversight group C. Project office D. Both B and C are correct E. All the above are correct

6. The importance of the increase in project oversight to today's project manager includes all of the following except:  A. Increase in expected profits from projects B. Increased interest in supporting and helping the project manager C. Impact on the environment in which the project will be implemented D. Impact on how the project manager's performance will be measured E. The reporting of project progress to an oversight group

7. The centralized management of projects to ensure that the allocation of resources to projects is directed toward projects that contribute the greatest value to organization goals is known as:  A. Portfolio Project Management B. Project Office Management C. Project Management Optimization D. Project Priority Matrix Management E. Resource Allocation Optimization

8. Which of the following is responsible for the continued support of consistent application of selection criteria, standards, processes, training, and general assistance to project managers and continued improvement and use of best practices?  A. Portfolio Project Management B. Project Office Management C. Project Management Optimization D. Project Priority Matrix Management E. Resource Allocation Optimization

9. Which of the following firms use project offices to coordinate projects and to ensure best practices are being used to manage projects?  A. Hewlett Packard B. International Business Machines C. Dell D. Both A and B are correct E. All the above are correct

10. Project Management Office functions typically include all of the following except:  A. Create and maintain the internal project management information system B. Recruit and select project managers C. Train personnel in project management techniques D. Develop risk management programs E. All of these are typically included

11. Project Management Office functions typically include all of the following except:  A. Establish standardized project planning and reporting methodologies B. Audit ongoing and recently completed projects C. Provide in-house project management consulting D. Select which projects to undertake E. All of these are typically included

12. Project offices are known to result in positive benefits such as:  A. A bridge between senior management and project managers B. Support integration of all project management processes C. Training to support a higher level of project management maturity D. Both A and B are correct E. All of these are correct

13. The in-depth review of individual projects at specific phases in the project life cycle is known as:  A. Project Assessment Checkpoint Reviews B. Go/Kill Decision Review Methodology C. Phase Gate Methodology D. Stargate Review Methodology E. None of these are correct

14. The original Stage-GateTM model included all the following stages except:  A. Preliminary investigation B. Detailed investigation C. Testing and validation D. Production and market launch E. All of these were included

15. The abridged, generic phase gated process includes how many Go/Kill decision points?  A. Three B. Four C. Five D. Six E. Seven

16. During which of the following phase gates would the question of "Does this project align with our strategic direction?" be answered?  A. Proposal B. Screening and selection C. Implementation D. Progress E. Closure

17. During which of the following phase gates would the question of "What are the project's ROI and/or non-financial benefits?" be answered?  A. Proposal B. Selection C. Implementation D. Progress E. Closure

18. During which of the following phase gates would the question of "Are the resources needed identified and available?" be answered?  A. Proposal B. Screening and selection C. Implementation D. Progress E. Closure

19. During which of the following phase gates would the question of "Are time, costs, and scope performances within acceptable limits?" be answered?  A. Proposal B. Screening and selection C. Implementation D. Progress evaluation E. Closure

20. Which of the following is not one of the growth levels in the Organizational Project Maturity Model (OPM3TM)?  A. Repeatable B. Defined C. Managed D. Expanded E. Optimized

21. The first appearance of standard approaches to managing projects including scope statements and WBS occurs in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

22. Risk assessment derived from WBS and technical analyses and customer input is in place occurs in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

23. Project audits are performed on all significant projects and lessons learned are recorded and used on subsequent projects occurs in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

24. An informal culture that values improvement drives the organization, not policies and procedures occurs in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

25. The use of an organization-wide project management system tailored to specific needs of the organization is established in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

26. The development of a system for managing multiple projects that are aligned with strategic goals is established in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

27. The focus is on continuous improvement through incremental advancements of existing practices and by innovations using new technologies and methods is established in which of the following Maturity Model Levels?  A. Ad Hoc Project Management B. Formal Application of Project Management C. Institutionalization of Project Management D. Management of Project Management System E. Optimization of Project Management System

28. The balanced scorecard model differs from selection models by reviewing projects over  A. 1-3 years B. 2-4 years C. 4-7 years D. 5-10 years E. e.10-15 years

29. Which of the following is not one of the four performance goals measures in the scorecard model?  A. customer B. internal C. financial measures D. industry standards E. innovation and learning

30. __________ can be defined as a set of principles and processes to guide and improve the management of projects.  ________________________________________

31. Project selection and portfolio management are typical activities at the _________ level of project oversight.  ________________________________________

32. Reviewing project's objectives and resolving project bottlenecks are typical activities at the _________ level of project oversight.  ________________________________________

33. The centralized management of projects to ensure that the allocation of resources to projects is directed toward projects that contribute the greatest value to organization goals is known as __________.  ________________________________________

34. The __________ is responsible for the continued support of consistent application of selection criteria, standards, processes, training, and general assistance to project managers.  ________________________________________

35. High tech firms such as HP, IBM, and Dell all use __________ to coordinate projects and to ensure best practices are being used to manage projects.  ________________________________________

36. The use of __________ provides an in-depth review of individual's projects at specific phases in the project life cycle.  ________________________________________

37. The original __________ model was pioneered by Robert G. Cooper several decades ago to improve management of new product development.

38. "Go, Kill, Hold, or Recycle" decisions are made by the oversight team at each _________ of a project.  ________________________________________

39. The __________ process can be defined as a structured process to review, evaluate, and document outcomes in each project phase and to provide management with information to guide resource deployment toward strategic goals.  ________________________________________

40. Phase 1 of the abridged, generic phase gated process is known as the _________ phase.  ________________________________________

41. Phase 2 of the abridged, generic phase gated process is known as the _________ phase.  ________________________________________

42. Phase 3 of the abridged, generic phase gated process is known as the _________ phase.  ________________________________________

43. Phase 4 of the abridged, generic phase gated process is known as the _________ phase.  ________________________________________

44. Phase 5 of the abridged, generic phase gated process is known as the _________ phase.  ________________________________________

45. Phase 6 of the abridged, generic phase gated process is known as the _________ phase.  ________________________________________

46. __________ is used to identify opportunities for improvement.  ________________________________________

47. Level 1 of the authors' Project Maturity Model is named __________.  ________________________________________

48. Level 2 of the authors' Project Maturity Model is named __________.  ________________________________________

49. Level 3 of the authors' Project Maturity Model is named __________.  ________________________________________

50. Level 4 of the authors' Project Maturity Model is named __________.  ________________________________________

51. Level 5 of the authors' Project Maturity Model is named __________.  ________________________________________

52. The ________ model limits measures of performance to goals in four main areas: customer, internal, innovation and learning, and financial measures.  ________________________________________

53. The balanced scorecard model differs from selection models by reviewing projects over _______.  ________________________________________

54. ___________ such as ROI, cash flow, and projects on budget reflect improvement and actions that contribute value to the bottom line.  ________________________________________

55. Project Management Control is the term that has emerged to reflect how organizations oversee their project management systems.  True False

56. Project oversight can be defined as a set of principles and processes to.  True False

57. The phase gate review process can be defined as a structured process to review, evaluate, and document outcomes in each project phase and to provide management with information to guide resource deployment toward strategic goals.  True False

58. The phase gate review process is the centralized management of projects to ensure that the allocation of resources to projects is directed toward projects that contribute the greatest value to organization goals.  True False

59. The appearance of a project office frequently follows the implementation of project portfolio management efforts.  True False

60. When project effort moves from tactical to strategic, project selection, project process.  True False

61. Portfolio Project Management is responsible for the continued support of consistent application of selection criteria, standards, processes, training, and general assistance to project managers.  True False

62. The appearance of a project office frequently follows the implementation of project portfolio management efforts.  True False

63. Project offices are known to result in positive benefits such as serving as a bridge between senior management and project managers.  True False

64. Phase gate methodology was originally developed for the construction industry.  True False

65. The phase gate methodology was developed before the emergence of the project office and project portfolios.  True False

66. One study by Morris showed 45 percent of those surveyed use phase review gates.  True False

67. The decision points at each phase gate are known as "Go, Kill, Hold, or Recycle" decisions.  True False

68. The Portfolio Project Management methodology can be defined as a structured process to review, evaluate, and document outcomes in each project phase and to provide management with information to guide resource deployment toward strategic goals.  True False

69. It is extremely rare that a project that is executing on time, on budget, and meeting project goals will be "killed".  True False

70. The first phase of the generic phase gated process in the text is called the Screening and Selection phase.  True False

71. The last phase of the generic phase gated process in the text is called the Closure phase.  True False

72. The Proposal phase answers the fundamental question: Is the project a good idea and does it solve a business problem or issue?  True False

73. The Implementation Plan phase answers the question: What are the major risks for this project?  True False

74. Gate 1 provides information at a minimal expenditure of cost and resources and in a short time, so the project can be reevaluated more thoroughly if it is perceived to have merits.  True False

75. In the authors' Project Maturity Model, the Ad Hoc Project Management level has no consistent project management process in place.  True False

76. In the authors' Project Maturity Model, the highest level is Management of Project Management System.  True False

77. Briefly describe what "Project Oversight" is and why it is important to Project Management.

78. The typical activities of project oversight cover two dimensions. Identify those two dimensions and give two examples of activities for each of those dimensions.

79. What is Portfolio Project Management?

80. What is the Project Office and what is its relationship to oversight?

81. What is Phase Gate Methodology and what does it do?

82. Identify the six phases of the authors' generic phase gated process.

83. What is an Organization Project Management Maturity model?

84. Identify the five growth levels contained in the Project Management Institute's organizational project maturity model, OPM3.

85. Identify and briefly describe the five levels in the authors' Project Maturity Model.

86. What is the Balanced Scorecard Model and how is it different from selection models?

#BUS 517 Final Exam – Strayer New

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BUS 515 Week 11 Discussion Questions – Strayer NEW

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Week 11 DQ 1

"Operations Management" Please respond to the following:

· Explain how this course has impacted your knowledge in operations management, and then determine which areas significantly affected your understanding on how operations strategy supports the business strategy.

Week 11 DQ 2

"Operations Manager" Please respond to the following:

· Explain three challenges that are present in an operations manager’s role, and then determine key methods in which you would mitigate those challenges. Provide specific examples to support your rationale.

#BUS 515 Week 11 Discussion Questions – Strayer NEW

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BUS 508 Week 11 Discussion Question – Strayer New

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"Transfer It" Please respond to the following:

• Propose two (2) applications of knowledge that you have learned in this course to your current or a future position.

• Create a list of three (3) best practices to follow in the field of contemporary business.

#BUS 508 Week 11 Discussion Question – Strayer New

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BUS 505 Week 11 Discussion Questions – Strayer New

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Week 11 DQ 1

"Looking Back" Please respond to the following:

• Thinking back on everything you have learned in this course, what single lesson learned was the most surprising or interesting. Explain what made it so.

• Describe the most difficult concept or process addressed in this course. Create an analogy that would help someone encountering that concept or process for the first time to better understand what it is about.

Week 11 DQ 2

"Looking Ahead" Please respond to the following:

• Discuss how you can effectively apply what you have learned in this class even if you wind up in a position that has absolutely nothing to do with contracting with the federal government.

• Imagine yourself five years from now working for a firm (or perhaps head of your own firm) that gets 100% of its business from the federal government. Discuss what you would like the most and what you would like the least of being in such a position.

#BUS 505 Week 11 Discussion Questions – Strayer New

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BUS 430 Week 11 Discussion Questions – Strayer

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Week 11 DQ 1

"Operations Management Applications" Please respond to the following:

· Evaluate different operations management principles and techniques that can make businesses more profitable today.

· Select one service company of your choice and discuss at least three operations management challenges the company is facing.

· Suggest ways to confront the challenges and provide suggestions that can untimely improve sustainability in its value chain.

Week 11 DQ 2

"The Value Chain Concept" Please respond to the following:

· Describe a customer experience you have personally encountered where the goods or service or both were unsatisfactory (such as defective products, mistakes, poor service, and so on).

· Suggest ways for the organization to improve its goods / service. Determine the element(s) of operations management that must be reevaluated.

#BUS 430 Week 11 Discussion Questions – Strayer

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BUS 402 Week 11 Discussion Questions – Strayer New

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Week 11 DQ 1

Summation

Please respond to the following:

• Reflecting back on everything you have learned in this course, discuss the single most important lesson any entrepreneur should apply in order to be successful. Explain your rationale.

• Summarize the lessons learned in this course in 140 characters or less (something you could post on Twitter).

Week 11 DQ 2

My Dream Business

Please respond to the following:

• Discuss the most innovative idea you can dream up for a new business. Explain why you think it would be successful.

• Discuss the major challenges you would face in running such a business and how you would expect to overcome them. Provide specific examples to support your response.

#BUS 402 Week 11 Discussion Questions – Strayer New

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BUS 335 Week 11 Quiz– Strayer

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Quiz 10 Chapter 14

Student: ___________________________________________________________________________

1. There are several positive, functional outcomes of employee turnover.  True False

2. Avoidable turnover is that which could have been prevented by actions like a pay raise or a new job assignment.  True False

3. An employee's perceived desirability of movement can depend on reasons that have little or nothing to do with the job.  True False

4. An employee's overall intention to quit depends on the desirability of leaving, ease of leaving, and alternatives available to the employee.  True False

5. Employees who have a high intention to quit necessarily end up quitting their jobs.  True False

6. Desirability of movement is a weak predictor of voluntary employee turnover.  True False

7. Availability of promotions or transfers may lessen or eliminate any intentions to quit, even though the employee is very dissatisfied with the current job.  True False

8. Discharge turnover is primarily due to extremely poor person/organization matches.  True False

9. Downsizing turnover is a reflection of a staffing level mismatch in which the organization actually is, or is projected to be, overstaffed.  True False

10. Of the three types of employee turnover, discharges are the most prevalent.  True False

11. The types of employee turnover include ___________.  A. voluntary B. discharge C. downsizing D. all of the above

12. Discharge turnover is usually due to ___________.  A. a site or plant closing B. permanent layoff C. poor employee performance D. none of the above

13. Turnover due to organizational downsizing is classified as ______.  A. voluntary B. involuntary C. supplemental D. it depends on the circumstances of the downsizing

14. The desirability of leaving an organization is often an outgrowth of _________.  A. poor person/organization match B. favorable labor market conditions C. general, transferable KSAOs D. none of the above

15. An employee's intention to leave an organization is influenced by __________.  A. perceived desirability of movement B. perceived ease of movement C. alternatives available to the employee D. all of the above

16. Ease of leaving is greater when ____.  A. employees are highly embedded B. employees possess ample employer-specific KSAOs C. labor markets are loose D. all of the above

17. Downsizing is typically a reflection of __________.  A. overstaffing B. understaffing C. an appropriate staffing level D. none of the above

18. Data are seldom available regarding when or where employee turnover is occurring in most organizations.  True False

19. Research suggests that there are differences between the reasons for turnover that employees provide in exit interviews and the reasons employees provide in anonymous surveys.  True False

20. Because it is typically very easy to collect and analyze job satisfaction data meaningfully, most organizations make this a cornerstone of their retention strategy.  True False

21. Exit interviews should be conducted by exiting employee's immediate supervisor whenever possible.  True False

22. The interviewee in an exit interview should be told that the comments that he/she makes will be confidential and that only aggregate results will be used by the organization.  True False

23. Postexit surveys should ask be mailed quite some time after the employee's last day of work so the individual has sufficient time to reflect on his or her experiences.  True False

24. Economic costs associated with voluntary turnover include accrued paid time off and temporary coverage.  True False

25. Material and equipment costs are likely to be the most prevalent in replacement and training costs.  True False

26. The primary immediate benefit of turnover for employers is hiring inducements.  True False

27. Compared to discharge turnover, voluntary turnover is usually more costly.  True False

28. Turnover cost estimates are very precise and accurate in most cases.  True False

29. Many turnover costs are hidden in the time demands placed on the many employees who must handle the separation, replacement, and training activities.  True False

30. One potential benefit of employee discharges is the development of improved performance management and disciplinary skills.  True False

31. Downsizing costs are concentrated in separation costs for permanent reductions in force.  True False

32. Exit interviews can be used to explain _________ to departing employees.  A. rehiring rights B. benefits C. confidentiality agreements D. all of the above

33. Which of the following is a suggestion for conducting an appropriate exit interview?  A. The interviewer should be the employee's immediate supervisor. B. There should be an unstructured interview format. C. The interviewer should prepare for each interview by reviewing the interview format and the interviewee's personnel file. D. None of the above

34. Which of the following is a common tool to assess employee reasons for leaving?  A. Position analysis B. Job rotation C. Exit interview D. Discharge notification

35. Economic separation costs associated with voluntary turnover include ________.  A. hiring inducements B. rehiring costs C. manager's time D. more than one of the above

36. Replacement costs associated with voluntary turnover include __________.  A. HR staff induction costs B. mentoring C. severance pay D. contagion

37. Which of the following is a potential benefit associated with voluntary employee turnover?  A. lowered replacement costs B. savings from not replacing an employee C. vacancy creates an open job that must be staffed D. all of the above

38. Which of the following makes involuntary turnover potentially more costly than a similar level of voluntary turnover?  A. Accrued paid time off B. Possibility of a lawsuit C. Staffing costs for a new hire D. Formal training

39. Economic costs associated with downsizing include ___________.  A. threat to harmonious labor-management relations B. decreased employee morale C. higher unemployment insurance premiums D. difficulty in attracting new employees

40. Which of the following is a potential benefit associated with downsizing?  A. focus on core businesses, eliminating peripheral ones B. spreading risk by outsourcing activities to other organizations C. lower payroll and benefit costs D. all of the above

41. A recent Society for Human Resource Management (SHRM) survey found that the most effective organizational strategy for retaining employees is the provision of concierge services.  True False

42. Surveys suggest that HR managers believe that a totally different set of factors lead to turnover compared to regular employees.  True False

43. To have the power to attract and retain employees, rewards must be unique and unlikely to be offered by competitors.  True False

44. In general, most employees report that the opportunity for higher compensation is a more powerful predictor of turnover than conflict with supervisors.  True False

45. Research has shown that the best performers are least likely to quit when an organization either rewards performance with higher compensation or widely communicates its compensation practices; doing both adds little to these independent effects.  True False

46. Of the factors that influence an employee's desirability of leaving, job satisfaction is the one that cannot be influenced to a significant degree by organizations.  True False

47. Providing employees increased autonomy and requiring them to learn a variety of skills increases stress significantly, which leads to greater turnover rates.  True False

48. One guideline for increasing job satisfaction and retention is to ensure that fairness and justice exist in the workplace.  True False

49. Employee perceptions of injustice are often rooted in misunderstanding or ignorance of company policies that could be resolved with increased communication.  True False

50. Employees may not like a supervisor who speaks in a derogatory way towards them, but evidence suggests they seldom actually turnover as a result of these feelings.  True False

51. Some employees who do not take advantage of work-life balance options resent their coworkers who are more likely to use work-life programs.  True False

52. Evidence suggests that personality dispositions have little or no impact on employee tendencies to turnover.  True False

53. Because employees quit companies, not jobs, internal staffing systems are usually seen as a poor substitute for a job at another company. As such, they do little to reduce intentions to leave.  True False

54. The first strategy for improving employee retention is to _____________.  A. redesign employee jobs B. increase pay C. improve job satisfaction D. none of the above

55. Guidelines for increasing job satisfaction and retention include ___________.  A. establish a lag pay policy for all employees B. link rewards to retention behaviors C. keeping core operations information secret D. none of the above

56. Which of the following is an attribute of a high value employee that an organization would want to prevent from leaving?  A. low training investment B. strong KSAOs C. retirement D. low seniority

57. Which of the following is an attribute of a low value employee that an organization would not want to prevent from leaving?  A. little intellectual capital B. high seniority C. high performance D. all of the above

58. Research most clearly suggests that when organizations wish to increase retention they need to _____.  A. provide team-building B. convince employees that there are few alternatives C. offer "bundles" of HR practices that complement one another D. demonstrate executive commitment to outreach

59. Which of the following factors leading to turnover cannot usually be addressed by the organization?  A. Poor social environment at work B. Low levels of job satisfaction C. Employee shocks D. All of these can be addressed by organizational policy

60. Organizations can use compensation to reduce turnover by _____.  A. providing deferred compensation B. giving specific rewards for seniority C. increasing pay levels to surpass the market D. all of the above

61. Organizations that link extrinsic rewards to employee performance (i.e. that use incentive compensation plans) find that _____.  A. turnover of high performers decreases and turnover of low performers increases B. turnover is increased across the board C. turnover is decreased across the board D. turnover rates are largely unaffected

62. Work-life balance programs are an example of _____.  A. communal distribution B. intrinsic rewards C. instrumentality D. a completely ineffective retention strategy

63. Research on organizational justice suggests that ____.  A. justice only influences turnover in highly industrialized Western countries B. communication has little impact on employee attitudes or turnover intentions C. employees are typically well-informed about organizational policies D. none of the above

64. To increase the cost of leaving, employers ____.  A. reduce headcount B. provide deferred compensation C. increase workloads D. provide free stock to employees

65. Performance management systems enable organizations to ensure that an initial person/job match yields an effectively performing employee.  True False

66. One recommendation for an effective performance appraisal or management system is that appraisal criteria should be job-related, specific, and communicated in advance to the employee.  True False

67. Performance management systems are used primarily to detect individuals whose performance is unsatisfactory and should be terminated.  True False

68. Poor task performance is the result of insufficient ability, knowledge, skills, or motivation.  True False

69. In progressive discipline, termination is seen as a viable early option to avoid having to work through a potentially fruitless cycle of improving a low-ability worker.  True False

70. Employee termination is the final step in progressive discipline, and ideally it would never be necessary.  True False

71. As assessment of employee success in reaching goals, ratings of competencies, and suggestions for improvement are all part of _____.  A. performance planning B. performance appraisal C. performance execution D. progressive discipline

72. Recommendations for the effective design and use of a performance appraisal or management system include that ____________.  A. evaluations should be in writing B. the employee should receive timely feedback about the evaluation and an explanation for any outcome decision C. there should be agreement among different raters in their evaluation of the employee's performance D. all of the above

73. ______ includes the completion of job tasks that are specifically included in the job description.  A. Citizenship B. Task performance C. (Low) Counterproductivity D. All of the above

74. Which of the following is not a part of normal progressive discipline?  A. Give employees notice of the rules of conduct B. Provide employees with alternative employment if performance problems persist C. Allow for full investigation of alleged employee misconduct D. Give employees the right to appeal a decision

75. Which of the following is an example of a major employee offense?  A. sabotage B. theft C. drug/alcohol abuse at work D. all of the above

76. The typical penalty for a first major offense by an employee is _____________.  A. suspension or discharge B. written reprimand C. verbal reprimand D. none of the above

77. Discharge turnover targets groups of employees and is also known as reduction in force. (RIF).  True False

78. Data shows dramatic decreases in organizational stock price following a downsizing, especially if the downsizing organization restructures assets during downsizing.  True False

79. Research shows that downsizing has negative impacts on employee morale and health, workgroup creativity and communication, and workforce quality.  True False

80. No-layoff policies cannot be implemented effectively by organizations.  True False

81. One problem that has been shown to accompany downsizing is _____.  A. increased payroll costs B. decreases in employee health and motivation C. most companies fail to downsize sufficiently D. insufficient attention to issues of seniority

82. Which of the following is the most commonly pursued alternative to layoffs for reducing staffing levels?  A. Attrition B. Retraining C. Benefits reductions D. Job sharing

83. In many cases, the post-layoff environment for those who remain is marked by _____.  A. reductions in trust of management B. stress among those who remain C. reductions in workforce quality D. all of the above

84. Legal experts usually advise organizations to avoid documenting performance problems because the "paper trail" is likely to just lead to problems in court.  True False

85. From a legal standpoint, if performance appraisal information is to be used in the retention management and termination process for an organization, the organization needs to ensure that the information is _____.  A. organizationally relevant B. sufficiently general to cover a variety of situations C. communicated in advance to the employee D. all of the above

#BUS 335 Week 11 Quiz– Strayer

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BUS 322 Week 11 Discussion Questions – Strayer New

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Week 11 DQ 1

"Looking Back" Please respond to the following:

• Create a simile or metaphor for what it is like to manage organizational behavior – one that would help someone with no knowledge of the field better understand what it is all about.

• Assess how what you have learned in this class could be used most effectively by someone with no professional connection to organizational behavior.

Week 11 DQ 2

"Looking Ahead" Please respond to the following:

• Determine the single most important lesson learned and how you will apply it in your current (or future) career.

• Predict the major challenges business will be facing in terms of organization behavior 20 years from now. Provide specific examples to support your response.

#BUS 322 Week 11 Discussion Questions – Strayer New

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BUS 310 Week 11 Discussion Questions – Strayer

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Week 11 Discussion 1

"Summary" Please respond to the following:

· Imagine you are at a party where you have to describe what human resource management is all about. Provide a brief summary to your fellow partygoers.

· Persuade a fellow business major why taking this course is in his/her best interest. What would you say to be persuasive?

Week 11 Discussion 2

Top of Form

"Course Wrap-Up" Please respond to the following:

· Describe what elements are most valuable to your learning in this course, such as reading the textbook, listening to lectures, discussions, writing papers, etc.

· Describe what you remember most about this course.

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BUS 309 Week 11 Quiz – Strayer

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Quiz 10 Chapter 11

Job Discrimination

MULTIPLE CHOICE

1. Which of the following is true based on documented evidence of discrimination?

African Americans have the third highest standard of living in the world.

Today, men are just as likely as women to be in so-called "pink collar" occupations.

There is little statistical evidence of job discrimination today.

Relatively few women and minorities have made it to the very top of their professions.

2. A historical view indicates which of the following is correct?

Statistical evidence is irrelevant to proving discrimination.

Women and blacks are sometimes victimized by stereotypes.

The idea that women may have difficulties fitting into a "male" work environment is outdated.

On average women earn between 1/3 and 1/2 of what men make for doing the very same work.

3. Which of these statements is true concerning court cases about discrimination?

Brown v. Board of Education upheld the principle of "separate but equal."

The Bakke case outlawed affirmative action across the board.

In the 2004 Holtz case, the Supreme Court ruled that "race-conscious" admissions policies are unconstitutional.

In the recent University of Michigan cases (Gratz and Grutter), the Supreme Court upheld a moderate, flexible affirmative action program and rejected a rigid one.

4. Of these four arguments, which of the following is the most plausible argument FOR affirmative action?

It evens the score with young white men, who have had it good for too long.

It is necessary to break the cycle that keeps minorities and women locked into low-paying, low-prestige jobs.

It ignores the principle of equality.

It is a color-blind policy.

5. Of these four arguments, which of the following is the most plausible argument AGAINST affirmative action?

Compensatory justice forbids affirmative action.

Blacks and whites are already equal in socioeconomic terms.

Affirmative action violates the rights of white men to equal treatment.

Affirmative action is the same thing as fixed numerical quotas.

6. Advocates of "comparable worth"

say that all women do their job just as well as men.

base their doctrine on the free-market determination of wages.

believe it is necessary for getting rid of sexual harassment.

want women to be paid as much as men for jobs involving equivalent skill, effort, and responsibility.

7. Which of the following is an example of sexual harassment?

Unwelcome ��sexual offers a female employer gives to a male employee.

A female employee hugging a co-worker when he announces his engagement.

A manager enforcing a dress code for a work environment.

An employee pinning up comic strips in an office cubicle.

8. Sexual comments that one woman appreciates might distress another women. Who decides when such behavior is inappropriate?

The person to whom the comments are directed.

The person accused of harassment.

The hypothetical "reasonable person."

The common law as modified by legislation.

9. The 1984 Supreme Court decision in Memphis Firefighters v. Stotts

treated sexual harassment as a form of discrimination.

upheld seniority over affirmative action.

upheld the legality of hiring quotas.

upheld the legality of mandatory drug testing.

10. In 1987, the Supreme Court affirmed, in the case of Johnson v. Transportation Agency, that

affirmative action is unconstitutional.

quotas based on considerations of race are unconstitutional.

considerations of sex are permissible as one factor in deciding whom to promote.

racially segregated schooling is unconstitutional.

11. Which of the following statements is accurate?

Men cannot be victims of sexual harassment.

The Supreme Court has established a hard and fast line between permissible and impermissible affirmative action plans.

The law treats sexual harassment as a form of sexual discrimination.

Differences in levels and types of education explain why, on the average, men earn more than women.

12. When investigators sent equally qualified young white and black men—all of them articulate and conventionally dressed—to apply for entry-level jobs in Chicago and Washington, D.C., the results clearly showed

sexual discrimination against young African-American men.

racial discrimination against young African-American men.

sexual discrimination against young white men.

racial discrimination against young white men.

13. What quality is more important in predicting who gets fired than job-performance ratings or even prior disciplinary history?

race

sexual orientation

age

gender

14. Male managers frequently assume that women

will not place family demands above work considerations.

possess the necessary drive to succeed in business.

take negative feedback professionally rather than personally.

are too emotional to be good managers.

15. What do affirmative action programs involve?

Firms should prepare an oral equal-employment policy and an affirmative action commitment.

Firms should appoint an administrative assistant to direct and implement their program and to publicize their policy and affirmative action commitment.

Firms are expected to survey current

female and minority employment by department and job classification.

Whenever underrepresentation of females or minorities is evident, firms are to try a little harder.

16. Fill in the blank. Today most large corporations not only accept the necessity of affirmative action but also find that _______________ benefits when they make themselves more diverse?

the morale of the company

the law department

the bottom line

the managers

17. Many Americans oppose what issue because they fear it will lead to illegal quotas, preferential treatment of African Americans and women, and even reverse discrimination against white men?

affirmative action

sexual harassment

sexual diversity

age discrimination

18. Over the last two decades, how many sexual-harassment claims have emerged?

over 12,000 annually.

over 25,000 annually.

over 15,000 annually.

over 50,000 annually.

19. There are two legal types of sexual harassment:

male to female, female to male.

male to male, female to female.

boss to worker, worker to boss.

“quid pro quo’’ and “hostile work environment.’’

20. To answer the question of who determines what is objectionable or offensive in sexual harassment, the courts use what kind of hypothetical person?

reasonable person

hysterical person

sensual person

management person

21. One message that sexual harassment conveys is that managers view women as

assets.

equals.

high potentials.

playthings.

22. What should a female employee do if she encounters sexual harassment?

She must decide if she likes the attention.

She should try to document it by keeping a record of what has occurred, who was involved, and when it happened.

Keep it to herself and never tell a soul.

Go on a talk show and tell her story.

23. According to Shaw and Barry, companies clearly have what kind of obligation to provide a work environment in which employees are free from sexual harassment?

legal

moral

environmental

personal

24. Opponents of comparable worth insist which one of these ideas support their position?

Most women want a rigid schedule.

Most women want the most challenging job.

Most women have chosen the higher paying occupations.

Most women have freely chosen the lower paying occupations.

25. Affirmative action, comparable worth, and sexual harassment are connected to

job performance.

job discrimination.

job analysis.

job description.

TRUE/FALSE

1. The Civil Rights Act of 1964 prohibits discrimination based on race, color, sex, religion, or national origin.

2. Experts distinguish two types of sexual harassment. "Hostile work environment" is one of them.

3. The Supreme Court has ruled that sexual favoritism is a form of sexual harassment and is therefore illegal.

4. To discriminate in employment is to make an adverse decision against an employee or job applicant based solely on his or her membership in a certain class.

5. The Supreme Court, in its 1978 ruling in the case of Bakke v. Regents of the University of California, upheld the University's right to reserve entrance places in its medical school for minorities.

6. The terms "affirmative action" and "reverse discrimination" are synonymous.

7. Kantians would repudiate sexual or racial job discrimination as disrespectful to our humanity.

8. Title VII of the Civil Rights Act of 1964 allowed sexual and racial discrimination at work until overturned by the Supreme Court.

9. "Affirmative action" refers to programs taking the race and sex of employees and job candidates into account as part of an effort to correct imbalances in employment that exist as a result of past discrimination, either in the company itself or in the larger society.

10. The issue of comparable worth pits against each other two cherished American values: the ethic of nondiscrimination verses the free enterprise system.

11. The only true form of job discrimination is intentional and individual.

12. Catherine A. MacKinnon describes sexual harassment as sexual attention imposed on someone who is not in a position to refuse it.

13. An isolated or occasional remark or innuendo inevitably constitutes sexual harassment.

14. According to the Supreme Court, men cannot be the victims of sexual harassment.

15. The courts view sexual harassment as a kind of sexual discrimination.

16. The 1995 case Adarand Constructors v. Pena shows that, after years of disagreement, the Supreme Court is now unanimous on the issue of affirmative action.

17. Job discrimination involves prejudice, inaccurate stereotypes, or the assumption that a certain group is inferior and deserves unequal treatment.

18. Some companies view diversity in the workplace as a competitive advantage.

19. The Civil Rights Act of 1964 applies to all employers, both public and private, with twenty five or more employees.

20. Executive Order 10925 decreed that federal contractors should “make rigid quotas to ensure that applicants are employed without regard to their race, creed, color, or national origin.’’

21. Women entering male turf, or minority workers of either sex going into a predominantly white work environment, can find themselves uncomfortably being measured by a white male value system.

22. Statistics by themselves do not prove discrimination.

23. A survey shows that three out of four whites believe that African Americans and Hispanics are more likely than whites to prefer living on welfare, and a majority of whites also believe that African Americans and Hispanics are more likely to be lazy, unpatriotic, and prone to violence.

24. Anti-discrimination laws do not address the present-day effects of past discrimination.

25. The Civil Rights Act of 1964 (later amended by the Equal Employment Opportunity Act of 1972) prohibits all forms of discrimination based on race, color, sex, religion, or national origin.

SHORT ANSWER

1. Job discrimination occurs if three conditions are met. What are they?

2. Job discrimination can be individual or intentional. What are two other forms that job discrimination can take?

3. What is some of the statistical evidence of job discrimination?

4. What is some of the attitudinal evidence of job discrimination?

5. What did the Supreme Court decide in 1954 in the case of Brown v. Board of Education?

6. What does Title VII of the 1964 Civil Rights Act say?

7. EEOC lists steps to affirmative action. Name two of them.

8. Explain the importance of the 1978 case, Bakke v. Regents of the University of California.

9. What is the Supreme Court's current view of affirmative action (as evidenced by the Michigan cases Gratz and Grutter)?

10. Affirmative action should be distinguished from reverse discrimination. What is the difference?

11. What is the doctrine of comparable worth? On what grounds do opponents of comparable worth criticize it?

12. What evidence do we have that sexual harassment is harmful to people?

13. What is an example of strong evidence that racial or sexual discrimination exists?

14. What steps should a male or female employee take when encountering sexual harassment?

ESSAY

1. Explain in your own words the pros and cons of the against affirmative action that “affirmative action injures white men and violates their rights.”

2. Explain why sexual harassment is unethical considering two moral theories.

3. Explain why job discrimination is unethical considering two moral theories.

4. Is it unrealistic to imagine that there will be no sexual interaction between men and women in the workplace? Produce the reasoning on both sides of the argument.

5. Should the sexual orientation of gays and lesbians be protected against discrimination? Justify your answer.

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Quiz Chapter 16 and 17

Other Supply Responsibilities

113. Investment recovery is often assigned to:

a. supply managers because they have knowledge supply markets and price trends.

b. salespeople because they have contact with buyers who may use the material.

c. marketing managers because they have information on internal users.

d. engineers who can suggest possible uses of the material within the organization.

e. financial analysts because they set the target return on all investments.

114. Efforts to deal with hazardous waste include a focus on:

a. highly visible sources of pollution, e.g. smoke stacks.

b. less visible uncontrolled sites, e.g. buried waste.

c. recycling.

d. substitution of non-hazardous materials for hazardous materials.

e. all of the above.

115. The potential benefits of having accounts payable report to the same executive as supply include:

a. familiarity with the supplier

b. familiarity with the order.

c. opportunities to reduce transaction costs and headcount.

d. the ability for supply to ensure that payments for suppliers are made on time.

e. all of the above.

116. Reducing the obsolescence and waste of maintenance, repair, and operating (MRO) supplies through better materials and inventory management will:

a. reduce the costs of disposing of MRO items that are obsolete or waste.

b. reduce carrying cost by lowering inventory levels, especially of obsolete items.

c. improve environmental performance by reducing waste that goes into landfills or incinerators.

d. simultaneously reduce costs and improve environmental performance.

e. have little impact because MRO is a small percentage of annual spend and the items usually have low environmental low-impact.

117. Warehousing and inventory storage:

a. can either be an internal function or outsourced to a third-party logistics firm.

b. typically has little communication with supply management.

c. may have direct responsibility for organizational purchasing decisions.

d. outsourcing decisions typically are made by the finance department.

e. is seldom outsourced.

118. One of the reasons why companies are paying more attention to the effective, efficient, and profitable recovery and disposal of scrap, surplus, obsolete, and waste materials is that:

a. consumers overwhelmingly demand environmental responsibility.

b. it is easy to administer and highly profitable.

c. most organizations generate little scrap, surplus, obsolete and waste materials.

d. disposal costs are rising and environmental legislation is strengthening.

e. disposal is a fairly simple problem that is easily resolved.

119. The role and importance of investment recovery in an organization is driven in large part by the:

a. CEO’s perspective on environmental issues.

b. Chief Purchasing Officer’s clout or leverage with other executives.

c. projected dollar value of the potential revenue recovery or cost reduction.

d. salespeople who encourage the inclusion of buy-back programs of key materials.

e. internal level of knowledge about disposal channels and suppliers.

120. Coordinating inbound and outbound transportation:

a. has little application in an effective and efficient supply organization.

b. is done by cross-functional teams in most organizations.

c. helps to reduce costs and improve utilization of related assets and resources.

d. provides the basic elements of a global supply network.

e. is used extensively in Europe, but has not migrated to the U.S.

121. Production planning:

a. focuses on long-term schedules to control inventory and production.

b. requires coordinating the delivery and storage of key raw materials.

c. cannot involve supply because of fears of undue influence from suppliers.

d. relies heavily on forecasts from purchasing and supply management.

e. is a discrete activity with little coordination with other functions.

122. Supply can contribute to the organization’s environmental management program by:

a. developing sourcing and usage alternatives for hazardous materials.

b. focusing on substitution of non-hazardous materials for hazardous materials.

c. encouraging and participating in designing products that do not use or generate hazardous waste.

d. a and b.

e. a, b and c.

True and False

1. Production planning relies heavily on forecasts from operations to anticipate demand for products and services..

2. To ensure maximum return for its investment, the process and procedures for selling scrap and surplus must cover a broad range of activities including segregation and storage, weighing and measuring, delivery, negotiation, supplier selection, and payment.

3. If material has been declared surplus, the only option is to sell it.

4. Obsolete is in the eyes of the beholder. Something that has been declared obsolete in one organization may be perfectly acceptable and useable in another.

5. It makes no sense to assign responsibility for disposal to the supply management function because the personnel usually have no selling experience.

6. The total cost of hazardous waste for a company does not include the costs of new plant and equipment to reduce waste and deal with contaminated plants.

7. Escalator clauses in contracts for scrap disposal are necessary because the prices of primary metals fluctuate.

8. An organization’s Enterprise Resource Planning (ERP) system may be used to develop a national or global database for company personnel at different locations to post and purchase spare parts, obsolete materials, and surplus.

9. Waste is created when a change in the production process occurs, or when a better material is substituted for the material originally used.

10. As more people come to believe that it makes economic sense to practice environmentally sound operations, business and government may be able to work together for common goals.

CHAPTER 17

SUPPLY FUNCTION EVALUATION AND TRENDS

123. Research on the supply management process focuses on:

a. developing a strategy to reduce cost or ensure supply.

b. improving buyer-seller relationships.

c. deciding whether to single or multiple source.

d. conducting cost analysis to identify unnecessary costs.

e. increasing efficiency by automating where possible.

124. Purchasing performance benchmarking attempts to:

a. analyze a firm's own internal trends.

b. provide industrywide standards for overall firm performance.

c. determine what results have been achieved by purchasing and supply activities.

d. determine how an organization achieves results in purchasing and supply.

e. provide baseline metrics to compare companies’ supply performance.

125. The budget which begins with an estimate of expected operations, based on sales forecasts and plans, is called the:

a. operating budget.

b. capital budget.

c. cash flow budget.

d. materials purchase budget.

e. organizational budget.

126. When cross-functional teams are used to conduct research, it is best if:

a. the team has strong leadership.

b. the team has total autonomy to decide objectives and set expectations.

c. team members are randomly selected from departments.

d. performance evaluation and reward systems foster individual contributions.

e. each team member develops time management skills to handle the assignment.

127. In terms of measuring and validating supply savings:

1. information systems easily capture savings.

2. static markets, technologies, and volumes facilitate the process.

3. in many cases there is an inability to convert savings into profit.

4. management usually recognizes cumulative savings.

5. there is a universal definition of supply savings.

128. Supply can play a leadership role in corporate social responsibility (CSR) by:

1. instituting third party workplace audits of suppliers in developing countries.

2. knowing the providence of products in the supply chain.

3. considering the organization’s carbon footprint in supply decisions.

4. designing closed loop supply chains.

5. all of the above.

129. The assessment of a supplier’s financial capacity:

1. enables the development of risk minimization strategies.

2. predicts the probability of the supplier encountering financial problems.

3. is done primarily to ensure the supplier has the cash to pay its bills.

4. usually is unnecessary if the supplier has been in business for more than 5 years.

5. is required before a contract can be ratified.

130. A comprehensive commodity study should result in a(n):

a. thorough analysis of sources used over time.

b. strategy to lower cost and assure supply.

c. review of past predictions and variances from actual prices paid.

d. assessment of the performance of the commodity manager.

e. trend analysis of volume requirements over time.

131. Trends in supply organization and leadership include:

a. more chief purchasing officers with extensive supply experience.

b. less emphasis on teams.

c. global projects requiring cross-cultural skills.

d. merging of strategic and tactical roles in supply.

e. emphasis on “hard skills” such as finance.

132. An efficiency-oriented performance metric:

a. evaluates the quality of supplier relationships.

b. measures end customer satisfaction.

c. measures direct contributions to profit.

d. calculates the average dollar cost of a purchase order.

e. measures number of defects caused by poor incoming quality.

True and False

1. The perceptions that non-supply managers have of supply are shaped by interactions with and observations of supply, tangible experiences with supply on a day-to-day basis, and the extent to which supply is seen as contributing to the firm's mission.

2. Value engineering is done on purchased items used in the ongoing production process, while value analysis is done in the design stage where items are being specified.

3.Triple bottom line reporting refers to an organization’s social, environmental, and financial performance.

4. Effectiveness metrics which emphasize price may lead to behavior that drives up total cost of ownership.

5. The supply planning process is initiated by the supply manager’s assessment of the supply base.

6. Industry benchmarking allows an individual company to compare itself to its major competitor.

7. Financial efficiency is indicated by the asset and inventory turnover ratios.

8. Supplier performance management systems should be designed to capture and communicate the failures of suppliers so penalties can be assessed.

9. Supply management’s contribution may be measured along three dimensions: revenue enhancement, asset management, and cost management.

10. Internal validation of supply’s financial contribution increases joint ownership of goals and outcomes.

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Week 11 DQ

"Course Wrap-Up" Please respond to the following:

· Discuss the way in which the concepts of this course can be applied to your current or future work position.

· Determine to what extent you feel prepared to enter the accounting profession in the area of public accounting as a Certified Public Accountant.

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Week 11 DQ

"The Role of the Forensic Accountant" Please respond to the following:

• The role of the forensic accountant is important to fraud investigations. Give your opinion on the most important characteristics and qualities of successful forensic accountants / investigators.

• Assess your preparedness for a forensic accountant position based on what you have learned in this course.

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Week 11 Discussion 1

"Looking Back" Please respond to the following:

The AICPA would like for you to deliver a speech at one of its upcoming conferences on the future of accounting information systems. From the first e-Activity, select one conference and formulate the takeaway message and key points that you would want your audience to remember from your speech.

After delivering your speech, you have been approached by representatives from Oracle (Oracle Financials) and Microsoft (Microsoft Dynamics) regarding your key points. From the second e-Activity, evaluate how your message can be used to enhance their product line and vision

Week 11 Discussion 2

"Looking Ahead" Please respond to the following:

Evaluate the top-three concepts covered in this course that provided the most value to you and how you might incorporate those concepts or processes into your current job or future endeavors.

Evaluate the top-three concepts in this course that you found difficult to comprehend. Propose a recommendation to the author of the textbook on how he / she could have made that process or concept easier to understand.

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1.Developing an understanding of the client's business and industry is essential to proficiency as discussed in the general standards of GAAS. (Points: 4)

True

False

2. Ratio analysis only involves a year-to-year comparison of account balances. (Points: 4)

True

False

3. Control is considered to be part of corporate governance. (Points: 4)

True

False

4. When control risk is assessed at a maximum level, the auditor assumes that the internal controls are reliable in preventing or detecting material misstatements. (Points: 4)

True

False

5. Accounting subsystems are accounting cycles composed of one or more accounting applications. (Points: 4)

True

False

6. Presentation and disclosure assertions imply that all transactions and balances are properly presented, disclosures represent what actually happened, and the footnote disclosures are appropriate and adequate. (Points: 4)

True

False

7. Vouching recorded transactions involves taking a sample from the journal and tracing them back to the source documents to ensure they occurred. (Points: 4)

True

False

8. Audit documentation serves as support for the financial statements. (Points: 4)

True

False

9. In analysis of the results of audit sampling, an auditor may determine that the sample size must be increased. (Points: 4)

True

False

10. The revenue cycle considered by auditors includes the sales process but not collections. (Points: 4)

True

False

11. Inventory is complex and typically considered a high-risk area in audits of service firms. (Points: 4)

True

False

12. An auditor can utilize a cross-sectional analysis for a client operating in multiple locations to identify areas of further inventory testing. (Points: 4)

True

False

13. Legal expenses are reviewed by auditors for possible litigation and related FAS 5 treatment. (Points: 4)

True

False

14. An imprest payroll account will never reach a zero balance. (Points: 4)

True

False

15. A turnaround document is an effective completeness control because they list essential information for further processing of the collection on account. (Points: 4)

True

False

16. Auditors will perform an analysis of leases using SFAS 13 criteria and other EITF statements to substantiate the accounting treatment. (Points: 4)

True

False

17. Contingencies are considered by the auditor in relation to the SFAS No. 5 criteria to determine whether material contingencies exist with the client and, if so, that they are properly accrued or disclosed. (Points: 4)

True

False

18. An example of a Type II Subsequent Event includes the settlement two months after year-end of a liability for an amount well in excess of the amount that was accrued at year-end. (Points: 4)

True

False

19. A report on agreed-upon procedures issued by accountants provides the lowest form of attestation assurance. (Points: 4)

True

False

20. The need for assurance services arises for all of the following reasons EXCEPT: (Points: 4)

potential bias in providing information.

closeness between a user and the organization.

complexity of the processing systems.

remoteness between a user and the organization.

21. Which one of the following is not part of the attest process? (Points: 4)

evaluating evidence against objective criteria

gathering evidence about assertions

proving the accuracy of the books and records

communicating the conclusions reached

22. Users can reasonably expect audited financial statements to be (Points: 4)

complete and contain all important financial disclosures, be free from material misstatements and be presented fairly.

complete and contain all-important financial disclosures, be free from material misstatements and be presented fairly according to GAAP.

complete, be accurate and be presented fairly according to GAAP.

complete and contain all-important financial disclosures, be free from all misstatements and be presented fairly according to the substance of GAAP.

23. Which one of the following is not a provider of assurance services? (Points: 4)

CPAs

internal auditors

governmental auditors

AICPA

24. The primary governing board that performs quality reviews on registered CPA firms that audit public companies is the (Points: 4)

PCAOB

GAO

AICPA

FASB

25. Management of an organization has the responsibility for all of the following except: (Points: 4)

accounting principles used in financial reporting

engagement of a qualified auditor

internal control over financial reporting

financial statements and disclosures

26. The financial statement auditor must understand the client's internal control as a component of the fieldwork standards. The one of the reason for this understanding is so that the auditor may (Points: 4)

provide individual comments on internal control non-compliance.

become comfortable that the client will pay its audit bills.

assess materiality.

assess the risk of possible misstatements in the financial statements.

27. For an auditor to be independent, he or she must be independent in (Points: 4)

fact.

appearance.

fact and appearance.

either fact or appearance.

28. An auditor is concerned with materiality for which of the following reasons? (Points: 4)

to assess internal control

to comply with the quality assurance standards of GAAS

to determine the effects of misstatements on the users of financial information

to cut down on audit procedures and testing

29. A proper system of corporate governance is one that demands (Points: 4)

decision making by auditors in place of management.

internal audit representation on the board of directors.

audit planning to obtain competent and sufficient audit evidence.

accountability back through the system to the shareholders.

30. In determining the types of activities, engagements and interactions an auditor should have with a client, the CPA and the audit firm must (select the best answer) (Points: 4)

follow the rules exactly as they are written.

assess all of their relationships with every client to ensure that independence is intact.

focus on client satisfaction above all other considerations

realize that ethics are only guidelines and a matter of personal judgment.

31. The AICPA Principles of Professional Conduct include (Points: 4)

due professional care and supervision.

scope and nature of services and adequate training.

integrity and independence

public interest, integrity and objectivity.

32. A public client is required to report material changes in internal control (Points: 4)

monthly.

quarterly.

annually.

never.

33. Programs written to accomplish specific processing tasks, such as computing payroll, are (Points: 4)

application programs.

operating system programs.

Java scripts.

access control programs.

34. The combination of which functions in an information technology environment are not necessarily a control weakness? (Points: 4)

user and programming functions

database administrator and data input functions

programmers and authorization of changes

users and certain data access

35. Backup controls, used to prevent data and software loss would include procedures to: (Points: 4)

load balance in the event of heavy traffic across the network.

constantly monitor the network for intrusion and attack.

provide an alternate form of electricity to the corporate facilities.

fail-over to a mirrored storage device in the event of interruption or loss.

36. Which one of the following is an example of an edit test for limits? (Points: 4)

Only numbers are allowed to be input into the social security number field and dashes are pre-formatted.

Each sales order is given an identifier that is also tagged to the receipt of goods record, the customer invoice record and the cash receipts record

The purchasing department may order materials up to $5,000 in total before a second electronic authorization is required.

Supplies may not be purchased from any vendor not authorized and existing in the vendor table.

37. The control totals used to ensure the completeness of processing in a batch processing environment include (Points: 4)

record count.

control totals.

hash totals.

all of the above.

38. The type of test used to check that no hourly employee is paid more than $400.00 in one week is: (Points: 4)

an edit test.

a batch control test.

an output control test.

none of the above.

39. Tagging and tracing might best be used to test which of the following? (Points: 4)

The number of confirmations returned compared to the number of confirmations sent out.

The corporate credit card is only being used for business transactions.

All customer orders shipped were also invoiced and that cash was received.

Quantities of product F411029 have been accurately counted in the warehouse.

40. Which one of the following would be the least persuasive type of evidence? (Points: 4)

Confirmations returned by bank directly to the auditor.

Letters of communication from the Securities Exchange Commission.

Physical examination of perpetual inventory.

General ledger in a newly developed information system.

41. The primary support of an audit is (are) (Points: 4)

the financial statements.

the audit working papers.

the audit report.

the confirmation documentation.

42. The primary assertion that is satisfied by physically observing the client's count of inventory is (Points: 4)

existence.

rights.

valuation.

completeness.

43. The audit team asks the client to pull a sample vendor files and examines the invoices supporting the purchases of inventory items during the year. What is the most probable reason for the use of this evidence? (Points: 4)

Confirmation of vendors supplying inventory for existence.

Analytical procedures to determine completeness of inventory.

Testing for the valuation of inventory using the FIFO cost flow assumption.

Reading the terms of the arrangements with vendors for disclosure.

44. The extent of procedures is affected mostly by: (Points: 4)

the sheer volume of procedures to be applied by the auditor.

the time of year in which the client takes a physical inventory in the warehouse.

the auditor's judgment that misstatements are probable in certain balances.

the availability of the client's staff at or near the balance sheet date.

45. An audit program is created to specify: (Points: 4)

the type of audit opinion to be rendered based upon procedures performed.

the audit procedures that will be performed each year for the client.

how an auditor should think while performing audit procedures.

objectives and procedures to be followed during the audit process.

46. Which one of the following is primary reason for documenting audit work? (Points: 4)

to prevent litigation by other parties that question the audit performance.

to provide a stand-alone medium that gives audit conclusions and supports the opinion.

to supply a point of reference for all auditors performing the work subsequently.

47. Which of the following would most likely be considered intentional misapplication of accounting principles on financial statements? (Points: 4)

A capital lease is presented as periodic rent expense rather than interest and depreciation.

A deferred tax asset is reduced to zero with a valuation allowance.

A stock option is expensed even though the fair value of the underlying stock on the date of grant was the same as the option's exercise price.

Revenues for up-front fees are deferred rather than recognized immediately.

48. The audit of financial statements includes the initial approach of addressing fraud. How must an auditor address fraud in the planning stage? (Points: 4)

The auditor must test for fraud in the planning stage by sampling accounts.

The auditor must consider the likelihood of fraud existing in the company in the planning stage.

The auditor must realize that most people are honest and not automatically assume that fraud exists when planning the audit.

The auditor must not be aggressive in its initial approach to fraud as trust may be lost by the client.

49. Which of the following creates an opportunity for fraud to be committed in an organization? (Points: 4)

Management demands financial success.

Poor internal control.

Commitments tied to debt covenants.

Management is aggressive in its application of accounting rules.

50. Sam Jones, controller of Mitnikco, spends three days researching the accounting statements to find loopholes in the "rules" and to make a case for recognizing revenue earlier, rather than in later years. In the end, Sam and the other members of management determine that they will reduce the company's deferred revenue accounts and begin accounting for all revenues as agreements are signed. What are the motivations of Mitnikco management based solely on the information above? (Points: 4)

Pressures

Opportunity

Rationalization

Skepticism

51. Sampling risk is the risk that (Points: 4)

the sample will not contain characteristics representative of the population such that inferences made about that population will be incorrect.

the population will not contain characteristics representative of the sample such that inferences made about that sample will be incorrect.

Neither A nor B is correct.

Both A and B are correct.

52. The sample size varies directly with (Points: 4)

the expected failure rate.

the tolerable error rate.

the allowable risk of assessing control risk too low.

the nonsampling risk

53. The steps used in sampling during substantive testing includes the determination of each of the following except (Points: 4)

the audit objective.

the method of selecting a sample.

expected misstatement conditions

control failure risk.

54. The design of a PPS sample requires the auditor to determine all of the following except (Points: 4)

detection risk.

inherent risk.

tolerable misstatement.

expected misstatement in the account balance.

55. Which of the following is the best example of the control objective in the revenue cycle that all transactions are recorded accurately? (Points: 4)

Sales are recorded at the invoice price expected to be collected from customers.

Sales orders have sequential numbering.

Recorded sales transactions are evidenced by valid invoices and shipping documents.

Credits to customer accounts are classified as liabilities.

56. In an audit of financial statements, the risk of the high rate of return of products sold includes that of (Points: 4)

sales that are recorded improperly.

an estimate of accrued returns that reduces net income.

a reduction of net sales for an increase to the sales returns and allowance account.

consignment goods that are returned and forwarded to third parties.

57. Confirmations that are sent to select customers asking them to review the current balance due the client as shown on the client's statement and return the letters directly to the auditor indicating whether they agree with the indicated balance, are known as (Points: 4)

direct confirmations.

indirect confirmations.

positive confirmations.

negative confirmations.

58. Which of the following is an example of the type of analytics that an auditor would use for inventory? (Points: 4)

Number of day's sales in receivables compared to industry averages.

Inventory turnover for the previous five years.

Number of obsolete units this period compared to last.

Salaries of marketing personnel as a percent of total inventory.

59. Which one of the following accounts would an auditor most likely test by performing analytical procedures? (Points: 4)

Sales commissions expense.

Legal expenses.

Repairs and maintenance expense.

Travel expense.

60. Operational audits of cash management seek to identify areas in which cash management may be improved to contribute to the overall profitability and effectiveness of the organization. The internal auditor would use which of the following procedures on an operational audit of cash? (Points: 4)

determine the compliance of treasury activities with company policy

review procedures for identifying and investing excess funds

review procedures for handling cash receipts

all of the above

61. Which represents the most significant risk associated with restructuring liabilities on the financial statements? (Points: 4)

Future smoothing of income by releasing the reserves.

Related party transactions that are not recorded at arms-length.

Understatement of assets in the period of recording the liabilities.

Payroll liabilities that are not disclosed in the notes.

62. All of the following are significant issues for consideration when auditing for the impairment of goodwill, except (Points: 4)

timing of the assessment by management.

amortization in years of the goodwill.

clear objective evidence supporting the assessment.

understanding the client's business and its risks.

63. Simco's shaving products division was acquired over ten years ago in a purchase transaction by BlizzardCraft. The related goodwill was amortized until 2002 and $4.5 million remained on the books thereafter. In 2008, Simco's production machinery was assessed for impairment as a long-lived asset because of obsolescence issues. What relationship will the auditors most likely make between the facts stated above? (Points: 4)

BlizzardCraft erroneously treated the acquisition of Simco as a purchase transaction when it should have been a pooling of interests.

Simco should not have amortized goodwill previous to 2002.

Simco's goodwill should have been written off when purchased by BlizzardCraft in a one-time transaction.

The goodwill related to Simco may have been impaired during 2008.

64. All of the following represent a related entity to an organization except (Points: 4)

the president's son.

an affiliate with common ownership.

customers.

primary owners.

65. All of the following represent equity issuance requiring prominent accounting, presentation and disclosure treatment, except (Points: 4)

stock with beneficial conversion features.

Warrants issued to a consultant for services performed.

Preferred stock that is cumulative and par value is $0.50 per share.

Dividends have not been paid on common stock since inception.

66. The auditor will examine proceeds and trace them to recorded amounts of the par value of common stock to determine that (Points: 4)

shares exist and have valid stock certificates.

proceeds have been properly distributed between common stock and additional paid-in capital.

dividends have been issued in accordance with the stock indenture agreement as approved by the board.

shareholders actually have the rights to shares issued by the company in exchange for subscribed funds.

67. Which of the following is a tool that is best used by the audit team to determine if the client has included all disclosures? (Points: 4)

Management representation letter.

GAAS.

Inquiry of the CFO.

Checklists.

68. The auditor is responsible for evaluating the likelihood of a client continuing as a going concern for a reasonable period of time. A reasonable period of time is (Points: 4)

one year from the audit report date.

one year from the last day of field work.

one year from the balance sheet date.

two years from the balance sheet date.

69. Rock School, Inc. has a matter of material litigation that is threatened, but that has not gone to trial. The auditor's consideration of such a matter will most likely include all of the following except (Points: 4)

sending a letter to the client's attorneys for more information

discussions of the matter with the client and the client's insurance adjuster.

confirmation with the harmed party regarding the amount that will be claimed.

assessment of proper accrual or disclosure by the client in accordance with SFAS No. 5.

70. When the financial statements contain a material departure from GAAP that the auditor believes is justified, justification (Points: 4)

should appear in a footnote.

should appear in a paragraph added before the scope paragraph.

should appear in the opening paragraph.

should appear in a paragraph added before the opinion paragraph.

#ACC 562 Final Exam – Strayer New

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ACC 560 Week 11 Quiz – Strayer NEW

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Week 11 Quiz 10: Chapter 14

TRUE-FALSE STATEMENTS

1. Intracompany comparisons of the same financial statement items can often detect changes in financial relationships and significant trends.

Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

2. Calculating financial ratios is a financial reporting requirement under generally accepted accounting principles.

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

3. Measures of a company's liquidity are concerned with the frequency and amounts of dividend payments.

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

4. Analysis of financial statements is enhanced with the use of comparative data.

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

5. Comparisons of company data with industry averages can provide some insight into the company's relative position in the industry.

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

6. Vertical and horizontal analyses are concerned with the format used to prepare financial statements.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

7. Horizontal, vertical, and circular analyses are the most common tools of financial statement analysis.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

8. Horizontal analysis is a technique for evaluating a financial statement item in the current year with other items in the current year.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

9. Another name for trend analysis is horizontal analysis.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

10. If a company has sales of $110 in 2012 and $154 in 2013, the percentage increase in sales from 2012 to 2013 is 140%.

Ans: LO: 3, Bloom: AP, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: None, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Performance Measurement

11. In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed.

Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

12. Common size analysis expresses each item within a financial statement in terms of a percent of a base amount.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

13. Vertical analysis is a more sophisticated analytical tool than horizontal analysis.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

14. Vertical analysis is useful in making comparisons of companies of different sizes.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

15. Meaningful analysis of financial statements will include either horizontal or vertical analysis, but not both.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

16. Using vertical analysis of the income statement, a company's net income as a percentage of net sales is 10%; therefore, the cost of goods sold as a percentage of sales must be 90%.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: None, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Performance Measurement

17. In the vertical analysis of the income statement, each item is generally stated as a percentage of net income.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

18. A ratio can be expressed as a percentage, a rate, or a proportion.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

19. A solvency ratio measures the income or operating success of an enterprise for a given period of time.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

20. The current ratio is a measure of all the ratios calculated for the current year.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

21. Inventory turnover measures the number of times on the average the inventory was sold during the period.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

22. Profitability ratios are frequently used as a basis for evaluating management's operating effectiveness.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

23. The rate of return on total assets will be greater than the rate of return on common stockholders' equity if the company has been successful in trading on the equity at a gain.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Performance Measurement

24. From a creditor's point of view, the higher the total debt to total assets ratio, the lower the risk that the company may be unable to pay its obligations.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Investment Decisions

25. A current ratio of 1.2 to 1 indicates that a company's current assets exceed its current liabilities.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: None, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Performance Measurement

26. Using borrowed money to increase the rate of return on common stockholders' equity is called "trading on the equity."

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: None, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

27. When the disposal of a significant segment occurs, the income statement should report both income from continuing operations and income (loss) from discontinued operations.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Communcations, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

28. An event or transaction should be classified as an extraordinary item if it is unusual in nature or if it occurs infrequently.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

29. Variations among companies in the application of generally accepted accounting principles may reduce quality of earnings.

Ans: LO: 7, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

30. Pro forma income usually excludes items that the company thinks are unusual or nonrecurring.

Ans: LO: 7, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Communcations, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

31. The three basic tools of analysis are horizontal analysis, vertical analysis, and ratio analysis.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

32. A percentage change can be computed only if the base amount is zero or positive.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

33. In vertical analysis, the base amount in an income statement is usually net sales.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

34. Profitability ratios measure the ability of the enterprise to survive over a long period of time.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

35. The days in inventory is computed by multiplying inventory turnover by 365.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

36. Extraordinary items are reported net of applicable taxes in a separate section of the income statement.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

MULTIPLE CHOICE QUESTIONS

37. Which one of the following is primarily interested in the liquidity of a company?

a. Federal government

b. Stockholders

c. Long-term creditors

d. Short-term creditors

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

38. Which one of the following is not a characteristic generally evaluated in analyzing financial statements?

a. Liquidity

b. Profitability

c. Marketability

d. Solvency

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

39. In analyzing the financial statements of a company, a single item on the financial statements

a. should be reported in bold-face type.

b. is more meaningful if compared to other financial information.

c. is significant only if it is large.

d. should be accompanied by a footnote.

Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

40. Short-term creditors are usually most interested in evaluating

a. solvency.

b. liquidity.

c. marketability.

d. profitability.

Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

41. Long-term creditors are usually most interested in evaluating

a. liquidity and solvency.

b. solvency and marketability.

c. liquidity and profitability.

d. profitability and solvency.

Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

42. Stockholders are most interested in evaluating

a. liquidity and solvency.

b. profitability and solvency.

c. liquidity and profitability.

d. marketability and solvency.

Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

43. A stockholder is interested in the ability of a firm to

a. pay consistent dividends.

b. appreciate in share price.

c. survive over a long period.

d. all of these.

Ans: LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Risk Analysis, AICPA PC: None, IMA: Business Economics

44. Comparisons of financial data made within a company are called

a. intracompany comparisons.

b. interior comparisons.

c. intercompany comparisons.

d. intramural comparisons.

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

45. A technique for evaluating financial statements that expresses the relationship among selected items of financial statement data is

a. common size analysis.

b. horizontal analysis.

c. ratio analysis.

d. vertical analysis.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

46. Which one of the following is not a tool in financial statement analysis?

a. Horizontal analysis

b. Circular analysis

c. Vertical analysis

d. Ratio analysis

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

47. In analyzing financial statements, horizontal analysis is a

a. requirement.

b. tool.

c. principle.

d. theory.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

48. Horizontal analysis is also called

a. linear analysis.

b. vertical analysis.

c. trend analysis.

d. common size analysis.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

49. Vertical analysis is also known as

a. perpendicular analysis.

b. common size analysis.

c. trend analysis.

d. straight-line analysis.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

50. In ratio analysis, the ratios are never expressed as a

a. rate.

b. negative figure.

c. percentage.

d. simple proportion.

Ans: LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

51. The formula for horizontal analysis of changes since the base period is the current year amount

a. divided by the base year amount.

b. minus the base year amount divided by the base year amount.

c. minus the base year amount divided by the current year amount.

d. plus the base year amount divided by the base year amount.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

52. Horizontal analysis evaluates a series of financial statement data over a period of time

a. that has been arranged from the highest number to the lowest number.

b. that has been arranged from the lowest number to the highest number.

c. to determine which items are in error.

d. to determine the amount and/or percentage increase or decrease that has taken place.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

53. Horizontal analysis evaluates financial statement data

a. within a period of time.

b. over a period of time.

c. on a certain date.

d. as it may appear in the future.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

54. Assume the following sales data for a company:

2014 $1,050,000

2013 950,000

2012 800,000

2011 550,000

If 2011 is the base year, what is the percentage increase in sales from 2011 to 2013?

a. 100%

b. 90.9%

c. 72.7%

d. 52.4%

Ans: LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

55. Comparative balance sheets are usually prepared for

a. one year.

b. two years.

c. three years.

d. four years.

Ans: LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

56. Horizontal analysis is appropriately performed

a. only on the income statement.

b. only on the balance sheet.

c. only on the statement of retained earnings.

d. on all three of these statements.

Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

57. A horizontal analysis performed on a statement of retained earnings would not show a percentage change in

a. dividends paid.

b. net income.

c. expenses.

d. beginning retained earnings.

Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

58. Under which of the following cases may a percentage change be computed?

a. The trend of the balances is decreasing but all balances are positive.

b. There is no balance in the base year.

c. There is a positive balance in the base year and a negative balance in the subsequent year.

d. There is a negative balance in the base year and a positive balance in the subsequent year.

Ans: LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

59. Assume the following sales data for a company:

2014 $945,000

2013 877,500

2012 650,000

If 2012 is the base year, what is the percentage increase in sales from 2012 to 2013?

a. 24%

b. 35%

c. 76%

d. 135%

Ans: LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

60. Assume the following cost of goods sold data for a company:

2014 $1,680,000

2013 1,400,000

2012 1,200,000

If 2012 is the base year, what is the percentage increase in cost of goods sold from 2012 to 2014?

a. 140%

b. 40%

c. 23%

d. 17%

Ans: LO: 3, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

61. Darius, Inc. has the following income statement (in millions):

DARIUS, INC.

Income Statement

For the Year Ended December 31, 2013

Net Sales $300

Cost of Goods Sold 120

Gross Profit 180

Operating Expenses 44

Net Income $136

MC 61. (Cont.)

Using vertical analysis, what percentage is assigned to Cost of Goods Sold?

a. 30%

b. 40%

c. 100%

d. None of the above

Ans: LO: 4, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

62. Darius, Inc. has the following income statement (in millions):

DARIUS, INC.

Income Statement

For the Year Ended December 31, 2013

Net Sales $300

Cost of Goods Sold 120

Gross Profit 180

Operating Expenses 44

Net Income $136

Using vertical analysis, what percentage is assigned to Net Income?

a. 100%

b. 75.6%

c. 45.3%

d. None of the above

Ans: LO: 4, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

63. Vertical analysis is also called

a. common size analysis.

b. horizontal analysis.

c. ratio analysis.

d. trend analysis.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

64. Vertical analysis is a technique which expresses each item within a financial statement

a. in dollars and cents.

b. in terms of a percentage of the item in the previous year.

c. in terms of a percent of a base amount.

d. starting with the highest value down to the lowest value.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

65. In common size analysis,

a. a base amount is required.

b. a base amount is optional.

c. the same base is used across all financial statements analyzed.

d. the results of the horizontal analysis are necessary inputs for performing the analysis.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

66. In performing a vertical analysis, the base for prepaid expenses is

a. total current assets.

b. total assets.

c. total liabilities and stockholders' equity.

d. prepaid expenses.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

67. In performing a vertical analysis, the base for sales revenues on the income statement is

a. net sales.

b. sales.

c. net income.

d. cost of goods available for sale.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

68. In performing a vertical analysis, the base for sales returns and allowances is

a. sales.

b. sales discounts.

c. net sales.

d. total revenues.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

69. In performing a vertical analysis, the base for cost of goods sold is

a. total selling expenses.

b. net sales.

c. total revenues.

d. total expenses.

Ans: LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

70. Each of the following is a liquidity ratio except the

a. acid-test ratio.

b. current ratio.

c. debt to total assets ratio.

d. inventory turnover.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

71. A ratio calculated in the analysis of financial statements

a. expresses a mathematical relationship between two numbers.

b. shows the percentage increase from one year to another.

c. restates all items on a financial statement in terms of dollars of the same purchasing power.

d. is meaningful only if the numerator is greater than the denominator.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

72. A liquidity ratio measures the

a. income or operating success of an enterprise over a period of time.

b. ability of the enterprise to survive over a long period of time.

c. short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash.

d. number of times interest is earned.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

73. The current ratio is

a. calculated by dividing current liabilities by current assets.

b. used to evaluate a company's liquidity and short-term debt paying ability.

c. used to evaluate a company's solvency and long-term debt paying ability.

d. calculated by subtracting current liabilities from current assets.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

74. The acid-test (quick) ratio

a. is used to quickly determine a company's solvency and long-term debt paying ability.

b. relates cash, short-term investments, and net receivables to current liabilities.

c. is calculated by taking one item from the income statement and one item from the balance sheet.

d. is the same as the current ratio except it is rounded to the nearest whole percent.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

75. Harvey Clothing Store had a balance in the Accounts Receivable account of $390,000 at the beginning of the year and a balance of $410,000 at the end of the year. Net credit sales during the year amounted to $3,000,000. The average collection period of the receivables in terms of days was

a. 30 days.

b. 365 days.

c. 274 days.

d. 48.7 days.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

76. Parker Hardware Store had net credit sales of $8,000,000 and cost of goods sold of $5,000,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $600,000 and $700,000, respectively. The receivables turnover was

a. 7.7 times.

b. 4.6 times.

c. 11.4 times.

d. 12.3 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

77. Wagon Department Store had net credit sales of $16,000,000 and cost of goods sold of $15,000,000 for the year. The average inventory for the year amounted to $2,000,000. Inventory turnover for the year is

a. 8 times.

b. 15 times.

c. 7.5 times.

d. 5 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

78. Wagon Department Store had net credit sales of $16,000,000 and cost of goods sold of $15,000,000 for the year. The average inventory for the year amounted to $2,000,000. The average number of days in inventory during the year was

a. 365 days.

b. 48.7 days.

c. 46 days.

d. 30 days.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

79. Each of the following is included in computing the acid-test ratio except

a. cash.

b. inventory.

c. receivables.

d. short-term investments.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

80. Which one of the following would not be considered a liquidity ratio?

a. Current ratio

b. Inventory turnover

c. Acid-test ratio

d. Return on assets

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

81. Asset turnover measures

a. how often a company replaces its assets.

b. how efficiently a company uses its assets to generate sales.

c. the portion of the assets that have been financed by creditors.

d. the overall rate of return on assets.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

82. Profit margin is calculated by dividing

a. sales by cost of goods sold.

b. gross profit by net sales.

c. net income by stockholders' equity.

d. net income by net sales.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

83. Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Stout Corporation's common stock is selling for $75 per share on the New York Stock Exchange. Stout Corporation's price-earnings ratio is

a. 3.8 times.

b. 15 times.

c. 18.8 times.

d. 12 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

84 Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Stout Corporation's common stock is selling for $60 per share on the New York Stock Exchange. Stout Corporation's payout ratio for 2013 is

a. $4 per share.

b 25%.

c. 20%.

d. 12.5%.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

85 Flake Company reported the following on its income statement:

Income before income taxes $600,000

Income tax expense 150,000

Net income $450,000

An analysis of the income statement revealed that interest expense was $50,000. Flake Company's times interest earned was

a. 13 times.

b. 12 times.

c. 6 times.

d. 7 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

86. The debt to total assets ratio measures

a. the company's profitability.

b. whether interest can be paid on debt in the current year.

c. the proportion of interest paid relative to dividends paid.

d. the percentage of the total assets provided by creditors.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

87. Trading on the equity (leverage) refers to the

a. amount of working capital.

b. amount of capital provided by owners.

c. use of borrowed money to increase the return to owners.

d. number of times interest is earned.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

88. The current assets of Margo Company are $300,000. The current liabilities are $100,000. The current ratio expressed as a proportion is

a. 300%.

b. 3.0 : 1

c. .33 : 1

d. $300,000 ÷ $100,000.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

89. The current ratio may also be referred to as the

a. short run ratio.

b. acid-test ratio.

c. working capital ratio.

d. contemporary ratio.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

90. A weakness of the current ratio is

a. the difficulty of the calculation.

b. that it doesn't take into account the composition of the current assets.

c. that it is rarely used by sophisticated analysts.

d. that it can be expressed as a percentage, as a rate, or as a proportion.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

91. A supplier to a company would be most interested in the company’s

a. asset turnover.

b. profit margin.

c. current ratio.

d. earnings per share.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

92. Which one of the following ratios would not likely be used by a short-term creditor in evaluating whether to sell on credit to a company?

a. Current ratio

b. Acid-test ratio

c. Asset turnover

d. Receivables turnover

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

93. Ratios are used as tools in financial analysis

a. instead of horizontal and vertical analyses.

b. because they may provide information that is not apparent from inspection of the individual components of the ratio.

c. because even single ratios by themselves are quite meaningful.

d. because they are prescribed by GAAP.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

94. The ratios that are used to determine a company's short-term debt paying ability are

a. asset turnover, times interest earned, current ratio, and receivables turnover.

b. times interest earned, inventory turnover, current ratio, and receivables turnover.

c. times interest earned, acid-test ratio, current ratio, and inventory turnover.

d. current ratio, acid-test ratio, receivables turnover, and inventory turnover.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

95. A measure of the percentage of each dollar of sales that results in net income is

a. profit margin.

b. return on assets.

c. return on common stockholders' equity.

d. earnings per share.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

96. West Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $75,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on the amount of West Company's working capital?

a. No effect

b. $75,000 increase

c. $150,000 increase

d. $75,000 decrease

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

97. West Company had $375,000 of current assets and $150,000 of current liabilities before borrowing $75,000 from the bank with a 3-month note payable. What effect did the borrowing transaction have on West Company's current ratio?

a. The ratio remained unchanged.

b. The change in the current ratio cannot be determined.

c. The ratio decreased.

d. The ratio increased.

Ans: LO: 5, Bloom: C, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

98. If equal amounts are added to the numerator and the denominator of the current ratio, the ratio will always

a. increase.

b. decrease.

c. stay the same.

d. equal zero.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

99. The acid-test ratio

a. is a quick calculation of an approximation of the current ratio.

b. does not include all current liabilities in the calculation.

c. does not include inventory as part of the numerator.

d. does include prepaid expenses as part of the numerator.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

100. If a company has an acid-test ratio of 1.2:1, what respective effects will the borrowing of cash by short-term debt and collection of accounts receivable have on the ratio?

Short-term Borrowing Collection of Receivable

a. Increase No effect

b. Increase Increase

c. Decrease No effect

d. Decrease Decrease

Ans: LO: 5, Bloom: C, Difficulty: Medium, Min: 2, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

101. A company has a receivables turnover of 10 times. The average receivables during the period are $500,000. What is the amount of net credit sales for the period?

a. $50,000

b. $5,000,000

c. $500,000

d. Cannot be determined from the information given

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

102. If the average collection period is 60 days, what is the receivables turnover?

a. 6.0 times

b. 6.1 times

c. 12.2 times

d. None of these

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

103. A general rule to use in assessing the average collection period is that

a. it should not exceed 30 days.

b. it can be any length as long as the customer continues to buy merchandise.

c. it should not greatly exceed the discount period.

d. it should not greatly exceed the credit term period.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

104. Inventory turnover is calculated by dividing

a. cost of goods sold by the ending inventory.

b. cost of goods sold by the beginning inventory.

c. cost of goods sold by the average inventory.

d. average inventory by cost of goods sold.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

105. A company has an average inventory on hand of $40,000 and the days in inventory is 73 days. What is the cost of goods sold?

a. $200,000

b. $2,920,000

c. $400,000

d. $1,460,000

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

106. A successful grocery store would probably have

a. a low inventory turnover.

b. a high inventory turnover.

c. zero profit margin.

d. low volume.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

107. An aircraft company would most likely have

a. a high inventory turnover.

b. low profit margin.

c. high volume.

d. a low inventory turnover.

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

108. Net sales are $6,000,000, beginning total assets are $2,800,000, and the asset turnover is 3.0 times. What is the ending total asset balance?

a. $2,000,000

b. $1,200,000

c. $2,800,000

d. $2,200,000

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

109. Earnings per share is calculated

a. only for common stock.

b. only for preferred stock.

c. for common and preferred stock.

d. only for treasury stock.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

110. Which of the following is not a profitability ratio?

a. Payout ratio

b. Profit margin

c. Times interest earned

d. Return on common stockholders' equity

Ans: LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

111. Times interest earned is also called the

a. money multiplier.

b. interest coverage ratio.

c. coupon coverage ratio.

d. premium ratio.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

112. The ratio that uses weighted average common shares outstanding in the denominator is the

a. price-earnings ratio.

b. return on common stockholders' equity.

c. earnings per share.

d. payout ratio.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

113. Net income does not appear in the numerator of the

a. profit margin.

b. return on assets.

c. return on common stockholders' equity.

d. payout ratio.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

114. Bria Clothing Store had a balance in the Accounts Receivable account of $920,000 at the beginning of the year and a balance of $980,000 at the end of the year. Net credit sales during the year amounted to $7,600,000. The receivables turnover ratio was

a. 8.0 times.

b. 8.4 times.

c. 7.8 times.

d. 8.3 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

115. Bria Clothing Store had a balance in the Accounts Receivable account of $810,000 at the beginning of the year and a balance of $850,000 at the end of the year. Net credit sales during the year amounted to $6,640,000. The average collection period of the receivables in terms of days was

a. 91.3 days.

b. 45.6 days.

c. 30 days.

d. 46.7 days.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

116. Donner Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Donner Corporation's common stock is selling for $35 per share on the New York Stock Exchange. Donner Corporation's price-earnings ratio is

a. 5 times.

b. 8.75 times.

c. 4 times.

d. 10.9 times.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

117. Donner Corporation had net income of $400,000 and paid dividends to common stockholders of $40,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Donner Corporation's common stock is selling for $50 per share on the New York Stock Exchange. Donner Corporation's payout ratio for 2013 is

a. $8 per share.

b. 10%.

c. 12.5%.

d. 20%.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

118. Town Company reported the following on its income statement:

Income before income taxes $750,000

Income tax expense 150,000

Net income $600,000

An analysis of the income statement revealed that interest expense was $100,000. Town Company's times interest earned was

a. 5 times.

b. 8.5 times.

c. 6 times.

d. 7.5 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

119. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 25,000

Inventory 20,000

Property, plant and equipment 210,000

Total Assets $300,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 160,000

Total Liabilities and Stockholders’ Equity $300,000

Income Statement

Sales $ 120,000

Cost of goods sold 66,000

Gross profit 54,000

Operating expenses 30,000

Net income $ 24,000

Number of shares of common stock 6,000

Market price of common stock $20

Dividends per share .50

MC 119. (Cont.)

What is the current ratio for Sampson?

a. 1.80

b. 1.30

c. 1.40

d. .64

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

120. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 35,000

Inventory 20,000

Property, plant and equipment 210,000

Total Assets $310,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 160,000

Total Liabilities and Stockholders’ Equity $310,000

Income Statement

Sales $ 105,000

Cost of goods sold 66,000

Gross profit 39,000

Operating expenses 30,000

Net income $ 9,000

Number of shares of common stock 6,000

Market price of common stock $20

Dividends per share .50

What is the receivables turnover for Sampson?

a. 1.5 times

b. 1.1 times

c. 3.0 times

d. 12.9 times

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

121. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 25,000

Inventory 11,000

Property, plant and equipment 210,000

Total Assets $291,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 151,000

Total Liabilities and Stockholders’ Equity $291,000

Income Statement

Sales $ 120,000

Cost of goods sold 55,000

Gross profit 65,000

Operating expenses 30,000

Net income $ 35,000

Number of shares of common stock 6,000

Market price of common stock $20

Dividends per share .50

What is the inventory turnover for Sampson?

a. 3.2 times

b. 5 times

c. 10.9 times

d. 0.20 times

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

122. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 25,000

Inventory 20,000

Property, plant and equipment 210,000

Total Assets $300,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 160,000

Total Liabilities and Stockholders’ Equity $300,000

MC 122. (Cont.)

Income Statement

Sales $ 120,000

Cost of goods sold 66,000

Gross profit 54,000

Operating expenses 30,000

Net income $ 24,000

Number of shares of common stock 6,000

Market price of common stock $20

Dividends per share .50

What is the return on assets for Sampson?

a. 8.0%

b. 7.0%

c. 18.0%

d. 16.0%

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

123. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 25,000

Inventory 20,000

Property, plant and equipment 310,000

Total Assets $400,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 260,000

Total Liabilities and Stockholders’ Equity $400,000

Income Statement

Sales $ 300,000

Cost of goods sold 66,000

Gross profit 234,000

Operating expenses 30,000

Net income $ 204,000

Number of shares of common stock 6,000

Market price of common stock $20

Dividends per share .50

MC 123. (Cont.)

What is the profit margin for Sampson?

a. 115%

b. 28.2%

c. 68%

d. 51%

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

124. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 25,000

Inventory 20,000

Property, plant and equipment 230,000

Total Assets $320,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 180,000

Total Liabilities and Stockholders’ Equity $320,000

Income Statement

Sales $ 150,000

Cost of goods sold 66,000

Gross profit 84,000

Operating expenses 30,000

Net income $ 54,000

Number of shares of common stock 6,000

Market price of common stock $20

Dividends per share .50

What is the return on common stockholders’ equity for Sampson?

a. 30%

b. 46.7%

c. 36%

d. 16.9%

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

125. The following information pertains to Sampson Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 45,000

Accounts receivable (net) 25,000

Inventory 20,000

Property, plant and equipment 210,000

Total Assets $300,000

Liabilities and Stockholders’ Equity

Current liabilities $ 50,000

Long-term liabilities 90,000

Stockholders’ equity—common 160,000

Total Liabilities and Stockholders’ Equity $300,000

Income Statement

Sales $ 120,000

Cost of goods sold 66,000

Gross profit 54,000

Operating expenses 18,000

Net income $ 36,000

Number of shares of common stock 6,000

Market price of common stock $33

Dividends per share .50

What is the price-earnings ratio for Sampson?

a. 5.5 times

b. 1.1 times

c. 6 times

d. 6.6 times

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

126. The following information pertains to Eura Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 40,000

Accounts receivable (net) 30,000

Inventory 25,000

Property, plant and equipment 215,000

Total Assets $310,000

Liabilities and Stockholders’ Equity

Current liabilities $ 60,000

Long-term liabilities 75,000

Stockholders’ equity—common 175,000

Total Liabilities and Stockholders’ Equity $310,000

MC 126. (Cont.)

Income Statement

Sales $ 90,000

Cost of goods sold 45,000

Gross profit 45,000

Operating expenses 25,000

Net income $ 20,000

Number of shares of common stock 5,000

Market price of common stock $22

Dividends per share 1.00

What is the return on assets for Eura?

a. 4.8%

b. 9.7%

c. 6.5%

d. 12.9%

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

127. The following information pertains to Eura Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 40,000

Accounts receivable (net) 30,000

Inventory 25,000

Property, plant and equipment 215,000

Total Assets $310,000

Liabilities and Stockholders’ Equity

Current liabilities $ 60,000

Long-term liabilities 75,000

Stockholders’ equity—common 175,000

Total Liabilities and Stockholders’ Equity $310,000

Income Statement

Sales $ 135,000

Cost of goods sold 45,000

Gross profit 90,000

Operating expenses 25,000

Net income $ 65,000

Number of shares of common stock 5,000

Market price of common stock $22

Dividends per share 1.00

What is the profit margin for Eura?

a. 27.8%

b. 51.9%

c. 72.2%

d. 48.1%

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

128. The following information pertains to Eura Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 40,000

Accounts receivable (net) 30,000

Inventory 45,000

Property, plant and equipment 215,000

Total Assets $330,000

Liabilities and Stockholders’ Equity

Current liabilities $ 60,000

Long-term liabilities 75,000

Stockholders’ equity—common 195,000

Total Liabilities and Stockholders’ Equity $330,000

Income Statement

Sales $ 90,000

Cost of goods sold 45,000

Gross profit 45,000

Operating expenses 30,000

Net income $ 15,000

Number of shares of common stock 5,000

Market price of common stock $22

Dividends per share 1.00

What is the return on common stockholders’ equity for Eura?

a. 4.8%

b. 7.7%

c. 23.1%

d. 46.2%

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

129. The following information pertains to Eura Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments $ 40,000

Accounts receivable (net) 30,000

Inventory 25,000

Property, plant and equipment 215,000

Total Assets $310,000

Liabilities and Stockholders’ Equity

Current liabilities $ 60,000

Long-term liabilities 75,000

Stockholders’ equity—common 175,000

Total Liabilities and Stockholders’ Equity $310,000

MC 129. (Cont.)

Income Statement

Sales $ 90,000

Cost of goods sold 45,000

Gross profit 45,000

Operating expenses 25,000

Net income $ 20,000

Number of shares of common stock 5,000

Market price of common stock $22

Dividends per share 1.00

What is the price-earnings ratio for Eura?

a. 5 times

b. 4.0 times

c. 7.3 times

d. 5.5 times

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

130. The following information is available for Compton Company:

2013 2012

Accounts receivable $ 460,000 $ 500,000

Inventory 280,000 320,000

Net credit sales 2,470,000 1,400,000

Cost of goods sold 1,860,000 1,060,000

Net income 300,000 170,000

The receivables turnover ratio for 2013 is

a. 1.6 times.

b. 5.4 times.

c. 5.1 times.

d. 3.9 times.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

131. The following information is available for Compton Company:

2013 2012

Accounts receivable $ 360,000 $ 400,000

Inventory 340,000 420,000

Net credit sales 2,470,000 1,400,000

Cost of goods sold 1,860,000 1,060,000

Net income 300,000 170,000

The inventory turnover ratio for 2013 is

a. 6.2 times.

b. 4.9 times.

c. 5.5 times.

d. 4.4 times.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

132. The following amounts were taken from the financial statements of Plant Company:

2013 2012

Total assets $800,000 $1,000,000

Net sales 720,000 650,000

Gross profit 352,000 320,000

Net income 126,000 117,000

Weighted average number of common shares outstanding 90,000 90,000

Market price of common stock $35 $39

The return on assets ratio for 2013 is

a. 16%.

b. 14%.

c. 32%.

d. 28%.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

133. The following amounts were taken from the financial statements of Plant Company:

2013 2012

Total assets $800,000 $1,000,000

Net sales 840,000 650,000

Gross profit 352,000 320,000

Net income 155,400 117,000

Weighted average number of common shares outstanding 90,000 90,000

Market price of common stock $35 $39

The profit margin ratio for 2013 is

a. 19.4%.

b. 44.1%.

c. 18.5%.

d. 10.7%.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

134. The following amounts were taken from the financial statements of Plant Company:

2013 2012

Total assets $800,000 $1,000,000

Net sales 720,000 650,000

Gross profit 352,000 320,000

Net income 150,000 117,000

Weighted average number of common shares outstanding 60,000 90,000

Market price of common stock $67.50 $39

The price-earnings ratio for 2013 is

a. 27 times.

b. 45 times.

c. 11 times.

d. 2.5 times.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

135. Star Corporation had net income of $300,000 and paid dividends to common stockholders of $40,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Star Corporation's common stock is selling for $36 per share on the New York Stock Exchange.

Star Corporation's price-earnings ratio is

a. 5.2 times.

b. 6 times.

c. 18 times.

d. 6.9 times.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

136. Star Corporation had net income of $320,000 and paid dividends to common stockholders of $80,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Star Corporation's common stock is selling for $30 per share on the New York Stock Exchange.

Star Corporation's payout ratio for 2013 is

a. 16%.

b. 25%.

c. 9%.

d. $4 per share.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

137. The following financial statement information is available for Houser Corporation:

2013 2012

Inventory $ 44,000 $ 43,000

Current assets 81,000 106,000

Total assets 432,000 358,000

Current liabilities 30,000 36,000

Total liabilities 102,000 88,000

The current ratio for 2013 is

a. .37:1.

b. 2.7:1.

c. .79:1.

d. 4.24:1.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

138. The following financial statement information is available for Jones Corporation:

2013 2012

Net sales $784,000 $697,000

Cost of goods sold 406,000 377,000

Net income 112,000 80,000

Tax expense 48,000 29,000

Interest expense 14,000 14,000

The profit margin ratio for 2013 is

a. 14.3%.

b. 16.1%.

c. 48.2%.

d. 11.7%.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

139. The following financial statement information is available for Henn Corporation:

2013 2012

Stockholders' equity - common $330,000 $270,000

Net sales 784,000 697,000

Cost of goods sold 406,000 377,000

Net income 112,000 80,000

Inc tax expense 48,000 29,000

Interest expense 14,000 14,000

Dividends paid to preferred

stockholders 22,000 20,000

Dividends paid to common

stockholders 15,000 10,000

The return on common stockholders’ equity for 2013 is

a. 25.0%.

b. 37.3%.

c. 27.3%.

d. 30.0%.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

140. The following financial statement information is available for Bongo Corporation:

2013 2012

Net income $115,000 $ 80,000

Income tax expense 50,000 29,000

Interest expense 15,000 14,000

Dividends paid to preferred

stockholders 22,000 20,000

Dividends paid to preferred

stockholders 15,000 10,000

The times interest earned for 2013 is

a. 8.8 times.

b. 7.7 times.

c. 12 times.

d. 11 times.

Ans: LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

141. Dean Corporation reported net income $48,000, net sales $400,000, and average assets $800,000 for 2013. The 2013 profit margin was:

a. 6%.

b. 12%.

c. 50%.

d. 200%.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

142. Goin Company reports the following amounts for 2013:

Net income $ 150,000

Average stockholders’ equity 2,000,000

Preferred dividends 48,000

Par value preferred stock 200,000

The 2013 rate of return on common stockholders’ equity is:

a. 5.1%.

b. 5.7%.

c. 7.5%.

d. 8.3%.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

143. Gamble Corporation had beginning inventory $100,000, cost of goods purchased $700,000, and ending inventory $140,000. What was Gamble's inventory turnover?

a. 5 times.

b. 5.5 times.

c. 5.83 times.

d. 6.6 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

144. In 2013 Shum Corporation reported income from operations $180,000, interest expense $50,000, and income tax expense $40,000. Shum’s times interest earned ratio was:

a. 5.4 times.

b. 4.6 times.

c. 4.4 times.

d. 3.6 times.

Ans: LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

145. Reynolds Company has income before taxes of $360,000 and an extraordinary loss of $80,000. If the income tax rate is 30% on all items, the income statement should show income before irregular items and an extraordinary loss, respectively, of:

a. $360,000 and ($80,000)

b. $252,000 and ($24,000)

c. $252,000 and ($56,000)

d. $108,000 and ($24,000)

Ans: LO: 6, Bloom: AN, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

146. All of the following statements regarding changes in accounting principles are true except:

a. Most changes in accounting principles are only reported in current periods when the principle change takes place.

b. Changes in accounting principles are allowed when new principles are preferable to old ones.

c. Most changes in accounting principles are retroactively reported.

d. Consistency is one of the biggest concerns when a change in accounting principle is undertaken.

Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

147. Alpha’s Bunny Barn has experienced a $60,000 loss due to tornado damageto itsinventory. Tornados have never before occurred in this area. Assuming that the company’s tax rate is 30%, what amount will be reported for this loss on the income statement?

a. $60,000

b. $42,000

c. $18,000

d. $54,000

Ans: LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

148. Wing Company reported income before taxes of $900,000 and an extraordinary loss of $250,000. Assume that the company’s tax rate is 30%. What amounts will be reported on the income statement for income before irregular items and extraordinary items, respectively?

a. $630,000 and $250,000

b. $630,000 and $175,000

c. $650,000 and $250,000

d. $650,000 and $175,000

Ans: LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

149. Krug Corporation has income before taxes of $900,000 and an extraordinary gain of $300,000. If the income tax rate is 25% on all items, the income statement should show income before irregular items and extraordinary items, respectively, of

a. $600,000 and $300,000.

b. $600,000 and $225,000.

c. $675,000 and $300,000.

d. $675,000 and $225,000.

Ans: LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

150. Hook Inc. has an investment in available-for-sale securities of $80,000. This investment experienced an unrealized loss of $5,000 during the current year. Assuming a 35% tax rate, the effect of this loss on comprehensive income will be

a. no effect.

b. $80,000 increase.

c. $28,000 decrease.

d. $5,000 decrease.

Ans: LO: 6, Bloom: K, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

151. The disposal of a significant component of a business is called

a. a change in accounting principle.

b. an extraordinary item.

c. an other expense.

d. discontinued operations.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

152. ACME Company reports income before income taxes of $2,400,000 and had an extra-ordinary loss of $800,000. If the tax rate is 30%,

a. the income before the extraordinary item is $1,920,000.

b. the extraordinary loss would be reported on the income statement at $800,000.

c. the income before the extraordinary item is $1,680,000.

d. the extraordinary loss will be reported at $240,000.

Ans: LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

153. Eaton, Inc. disposes of an unprofitable segment of its business. The operation of the segment suffered a $360,000 loss in the year of disposal. The loss on disposal of the segment was $180,000. If the tax rate is 30%, and income before income taxes was $2,250,000,

a. the income tax expense on the income before discontinued operations is $513,000.

b. the income from continuing operations is $1,575,000.

c. net income is $1,710,000.

d. the losses from discontinued operations are reported net of income taxes at $270,000.

Ans: LO: 6, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

154. Each of the following is an extraordinary item except the

a. effects of major casualties, if rare in the area.

b. effects of a newly enacted law or regulation.

c. expropriation of property by a foreign government.

d. losses attributable to labor strikes.

Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

155. The discontinued operations section of the income statement refers to

a. discontinuance of a product line.

b. the income or loss on products that have been completed and sold.

c. obsolete equipment and discontinued inventory items.

d. the disposal of a significant segment of a business.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

156. Which one of the following would be classified as an extraordinary item?

a. Expropriation of property by a foreign government

b. Losses attributed to a labor strike

c. Write-down of inventories

d. Gains or losses from sales of equipment

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

157. A loss on the write down of obsolete inventory should be reported as

a. "other expenses and losses."

b. part of discontinued operations.

c. an operating expense.

d. an extraordinary item.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

158. If an item meets one (but not both) of the criteria for an extraordinary item, it

a. only needs to be disclosed in the footnotes of the financial statements.

b. may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss).

c. is reported as an "other revenue or gain" or "other expense and loss," net of tax.

d. is reported at its gross amount as an "other revenue or gain" or "other expense or loss."

Ans: LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

159. The order of presentation of nontypical items that may appear on the income statement is

a. Extraordinary items, Discontinued operations, Other revenues and expenses.

b. Discontinued operations, Extraordinary items, Other revenues and expenses.

c. Other revenues and expenses, Discontinued operations, Extraordinary items.

d. Other revenues and expenses, Extraordinary items, Discontinued operations.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

160. Each of the following is a factor affecting quality of earnings except

a. alternative accounting methods.

b. improper recognition.

c. pro forma income.

d. extraordinary items.

Ans: LO: 7, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

161. Comparisons can be made on each of the following bases except

a. industry averages.

b. intercompany basis.

c. intracompany basis.

d. Each of these is a basis for comparison.

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

162..... Comparisons of data within a company are an example of the following comparative basis:

a. Industry averages

b. Intercompany

c. Intracompany

d. Interregional

Ans: LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

163..... Center Corporation reported net sales of $200,000, $350,000, and $550,000 in the years 2012, 2013, and 2014 respectively. If 2012 is the base year, what is the trend percentage for 2014?

a. 100%

b. 75%

c. 175%

d. 275%

Ans: LO: 3, Bloom: AN, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

164. In vertical analysis, the base amount for each income statement item is

a. gross profit.

b. net income.

c. net sales.

d. sales.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

165. When performing vertical analysis, the base amount for administrative expense is generally

a. administrative expense in a previous year.

b. net sales.

c. gross profit.

d. fixed assets.

Ans: LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

166. Ratios that measure the short-term ability of the company to pay its maturing obligations are

a. liquidity ratios.

b. profitability ratios.

c. solvency ratios.

d. trend ratios.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

167. What type of ratios best measure the short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash?

a. Leverage

b. Solvency

c. Profitability

d. Liquidity

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

168. The acid-test ratio is also known as the

a. current ratio.

b. quick ratio.

c. fast ratio.

d. times interest earned ratio.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

169. The debt to total assets ratio

a. is a solvency ratio.

b. is computed by dividing total assets by total debt.

c. measures the total assets provided by stockholders.

d. is a profitability ratio.

Ans: LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

170. An extraordinary item is one that

a. occurs infrequently and is uncontrollable in nature.

b. occurs infrequently and is unusual in nature.

c. is material and is unusual in nature.

d. is material and is uncontrollable in nature.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

171. Parrish, Inc. decided on January 1 to discontinue its telescope manufacturing division. On July 1, the division’s assets with a book value of $1,250,000 are sold for $850,000. Operating income from January 1 to June 30 for the division amounted to $125,000. Ignoring income taxes, what total amount should be reported on Parrish’s income statement for the current year under the caption, Discontinued Operations?

a. $125,000

b. $275,000 loss

c. $400,000 loss

d. $525,000

Ans: LO: 6, Bloom: AP, Difficulty: Hard, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

172. When there has been a change in accounting principle,

a. the old principle should be used in reporting the results of operations for the current year.

b. the cumulative effect of the change should be reported in the current year’s retained earnings statement.

c. the change should be reported retroactively.

d. the new principle should be used in reporting the results of operations of the current year, but there is no change to prior years.

Ans: LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

#ACC 560 Week 11 Quiz – Strayer NEW

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