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Blue Ego Inc.is a market leader in the cell phone industry.To gain competitive advantage, the company has a post on its official site requesting its suppliers and customers to contribute ideas about the kinds of features and technology they think should be included in the next smartphone.This has helped the company reduce the burden of innovation on its employees, effectively meet customers' needs, and also include the larger community in product development.This process best exemplifies:


A) offshoring.
B) product diversification.
C) crowdsourcing.
D) horizontal integration.

E) A) and B)
F) A) and C)

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Photohome is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges.However, users have to pay a fee for advanced features on the cloud storage system and additional storage space.Which of the following business models does this best illustrate?


A) Subscription-based
B) Freemium
C) Pay-as-you-go
D) Razor-razor-blade

E) All of the above
F) B) and C)

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Accounting data focus mainly on tangible assets, which are no longer the most important.Elaborate on this statement.

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Accounting data focus mainly on tangible...

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Which of the following is NOT an advantage of the balanced scorecard approach to assess firm performance?


A) It allows managers to communicate and link the strategic vision to responsible parties within an organization.
B) It helps managers to implement feedback and organizational learning in order to modify and adapt strategic goals when indicated.
C) It provides a concise report that tracks chosen metrics and measures and compares them to target values.
D) It is a tool which can be effectively used by managers for both strategic implementation and strategic formulation.

E) A) and B)
F) A) and C)

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What do you mean by total return to shareholders?

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Investors are primarily interested in a ...

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Which of the following is NOT true of risk capital?


A) From the shareholders' perspective, the measure of competitive advantage is primarily based on return on their risk capital.
B) Risk capital invested in a firm can be legally recovered if the firm goes bankrupt.
C) A person who provides capital to a firm gets equity shares in return.
D) Return on risk capital includes stock price appreciation plus dividends received over a specific period.

E) B) and C)
F) A) and B)

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During the process of formulating an effective business model, a firm's managers should first:


A) transform their strategy of how to compete into a blueprint of actions and initiatives.
B) implement their strategy at corporate, strategic business unit, and functional levels.
C) implement their blueprint of actions and initiatives through structures, processes, culture, and procedures.
D) evaluate the firm's strategy already in effect and take corrective actions if necessary.

E) B) and C)
F) A) and D)

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What do you mean by fixed asset turnover and inventory turnover?

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Managers break down working capital turn...

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Which of the following businesses is required by law to make its data available to the public?


A) A restaurant owned and managed by an individual proprietor
B) A premium salon owned by two business partners
C) A carpet manufacturing unit runs solely by a third-generation entrepreneur
D) A software company with over 300 shareholders

E) A) and B)
F) All of the above

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Which of the following statements is true of the balanced scorecard?


A) It is a more or less a one-dimensional metric of measuring competitive advantages of a firm.
B) It is one of the traditional approaches of measuring firm performance.
C) Its primary focus is to base a firm's strategic goals entirely on external performance dimensions.
D) It attempts to provide a holistic perspective on firm performance.

E) All of the above
F) B) and D)

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_____ denotes the dollar amount a consumer would attach to a good or service.


A) Utility
B) Value
C) Consumer surplus
D) Economic contribution

E) None of the above
F) A) and B)

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_____ precisely indicates how much of a firm's sales is converted into profits.


A) Break-even price
B) Working capital turnover
C) Return on revenue
D) Inventory turnover

E) B) and C)
F) B) and D)

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Illustrate market capitalization.

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Students' answers may vary.
Market capit...

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_____ indicates how fast a firm is collecting the credit amount extended by a firm to its customers.


A) Payables turnover
B) Receivables turnover
C) Assets turnover
D) Inventory turnover

E) C) and D)
F) B) and D)

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After trying on a dress, a consumer assesses it to be worth a maximum of $100 and is willing to pay that amount for the dress.However, the dress was priced at $80.What is the amount, $100, referred to as?


A) The producer surplus
B) The firm's cost (C) in manufacturing the dress
C) The consumer surplus
D) The value (V) the consumer attaches to the dress

E) A) and B)
F) A) and C)

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What pricing options does a firm have when the difference between V, the consumer's willingness to pay, and C, the cost to produce the good or service, is large?

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A large difference between V, the consum...

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The market capitalization of a public company is $5 billion.Each share of the company is traded at $200.What do you infer from this financial data?


A) The firm's number of outstanding shares is 25 million.
B) The firm pays an annual dividend of 10 percent.
C) The firm's total return to shareholder is $5 billion.
D) The firm's economic value created is $5 billion.

E) All of the above
F) B) and C)

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When using the balanced scorecard approach to assess a firm's performance, which of the following is NOT a key question that managers need to answer?


A) How do customers view us?
B) How do we reduce the economic value created?
C) What core competencies do we need?
D) How do shareholders view us?

E) None of the above
F) A) and B)

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_____ indicates how much a firm benefits from interest-free loans extended by its suppliers and creditors.


A) Payables turnover
B) Receivables turnover
C) Assets turnover
D) Inventory turnover

E) A) and B)
F) C) and D)

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What is risk capital?

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From the shareholders' perspective, the ...

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