For more course tutorials visit uophelp.com is now newtonhelp.com www.newtonhelp.com BUS 475 Capstone Final Examination Part 1 From the following information calculate the net increase in cash. • $88,780 • $18,620 • $13,220 • $23,380

1. BUS 475 Capstone Final Examination Part 1 (New, 2018)
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BUS 475 Capstone Final Examination Part 1
From the following information calculate the net increase in cash.
• $88,780
• $18,620
• $13,220
• $23,380
Irvin’s Ice Creams a popular chain of ice cream parlors located only in the United States
is looking for opportunities to grow its business. Which of the following suggestions, if
provided by the company’s marketing manager, would present the least amount of risk to
the firm?
• Leveraging the firm’s brand value by selling children’s toys
• Increasing sales by increasing the number of stores in the United States
• Selling Irvin’s branded clothing in a new market
• Selling its current products in an attractive new market
Claudia is a team lead in an organization. One day at work a team member Marc informs
Claudia that he wants to speak to her about the problems that he faces at work. Marc tells
her that he is being treated unfairly at work and that his colleagues often ridicule him
because of his ethnicity. He goes on to say that his disturbed state of mind has caused a
dip in the productivity and quality of his work. Claudia does not interrupt him when he is
speaking and encourages him to talk openly. She also lets him know that she understands
his situation and that his feelings are valid. In this scenario, Claudia is primarily engaged
in __________.
• selective listening

2. • passive listening
• empathic listening
• defensive listening
Calculate the net working capital from the information given below. The figures are in
millions of dollars.
• $(140)
• $520
• $610
• $1,030
TwissData Corp. is an electronics firm based in Damiya that manufactures motherboards.
Because of a rapid growth in the personal computing industry, TwissData Corp. decides
to produce personal desktops and laptops instead of motherboards. By doing so, which
type of market-product strategy has TwissData Corp. applied?
• Product development
• Diversification
• Market penetration
• Market development
Zuckain Corp. has issued a 10-year coupon bond. The bond is issued at an annual coupon
rate of 14%. The face value of the bond is $1,500, and the bond is currently trading at
$1,232.56. Calculate the bond’s yield to maturity.
• 64%
• 32%
• 25%
• 95%
The current price of Latera Corporation’s common stock is $45 per share. The company
expects to pay a dividend of $3.30 per share during the next year. The expected growth
rate of the stock is 12%. Calculate the cost of equity using the constant-growth model.
• 33%
• 60%
• 64%
• 33%
General Pharmacy’s stock has a beta of 1.8 and an expected return of 14%, and Sicoras
Corp.’s stock has a beta of 1.5 and an expected return of 16.2%. Assuming capital-asset
pricing model holds, calculate the return on the market portfolio.
• 3%
• 2%
• 6%
• 9%
In 2006, Dexel Electronics Inc. introduced audio systems in the market for electronic
gadgets. Because of an increase in sales volume as well as a growing proportion of repeat

3. purchasers, the company has now upgraded the old version of audio systems by
introducing new features. Given this information, in which stage of the product life cycle
does Dexel Electronics lie?
• Growth
• Decline
• Introduction
• Maturity
FarmFresh Inc. partners with multiple retailers to sell its organic products. If stocks fall
below a product’s threshold, the retail managers raise purchase orders to FarmFresh. It
takes two days for FarmFresh to process the orders and dispatch the products. The
process proves to be ineffective when the retail stores do not have the stock to meet a
sudden increase in demand. How can supply chain management (SCM) systems solve
this problem and make the process more efficient?
• The retail stores can track the status of a shipment.
• Managers from the retail stores can raise purchase orders over telephone.
• FarmFresh can have real-time access to sales information.
• Customers can track the status of a product delivery.
LaBelle, a famous cosmetic brand, introduces a new skin cleanser. Initially, the product
does extremely well and reaps huge profits for the company. After using the product for
few months, consumers having acne complain of rashes and allergies. An external
chemical agency accuses that the company used a harsh chemical that causes allergies to
people with acne, and it did not include it on the ingredients list displayed on the
product’s label. These harsh chemicals did not cause allergies to people with normal skin.
When enquired, the company’s CEO confesses that the products would have not done so
well if they had listed the chemical. The company can be charged with __________.
• battery
• fraud
• defamation
• Assault
Ricalta Inc. earns a total of $500,000 before interest and taxes. Its total debt is $1,110,000
(costing 5%). It has 150,000 shares of common stock at $5 per share. The firm is
considering reducing its debt by $450,000 by issuing an additional 90,000 shares of
common stock. The firm is in the 35 percent tax bracket. Its earnings before interest and
taxes will remain the same as the new capital structure will not impact the firm’s
operations. Which of the following will be a consequence of the change in Ricalta’s
capital structure?
• The firm’s earnings before taxes (EBT) will remain unchanged.
• The firm’s net income will decrease by $14,625.
• The firm’s earnings per share (EPS) will be reduced by $0.66.
• The firm’s net income will increase by $10,625.
The capital structure of Wilken Corporation is given below.
Calculate the weighted average cost of capital (WACC).

4. Additional details are as follows:
• 35%
• 65%
• 75%
• 45%
Mirabel Inc. has recently ventured into the home cleaning supplies market with its very
own floor cleaner, Flofix, which does not contain any harmful chemicals such as phenol.
The company has used aggressive marketing strategies and innovative advertising
campaigns to promote the product. The company’s revenue analysis shows that the sales
for the product are increasing steadily. However, when the market survey team of the
company surveyed a large number of consumers in the target market, the consumers
mentioned that they had not switched over to the new brand of floor cleaner. Which of
the following, if true, best explains how the sales for the company went up in spite of
consumers not purchasing the product?
• People prefer to use products that they are familiar with rather than trying out new
products.
• Organizational buyers purchase new products before consumers do.
• Consumers sometimes wait to see how well a product performs in the market before
purchasing it.
• Mirabel Inc. did not invest equal amounts of money on its different advertising
campaigns.
A popular hypermarket chain came under criticism for failing to protect the e-mail
addresses and credit card details of 50,000 customers. CloudCom Inc., a web services
company, identified that the lapse was because of a worm that had breached the
hypermarket’s internal servers through an unauthorized e-mail, and that the anti-malware
system failed to catch the worm. Which of the following actions should CloudCom take
to restrict such malwares from entering the hypermarket’s internal network?
• Install a firewall
• Use a virtual private network to connect its users
• Whitelist the malware
• Update the anti-malware system’s database
Robert, an ardent blogger, is approached by the marketing manager of LaBelle, a famous
cosmetic brand, to write positive reviews about the company’s products. Robert knows
that the company’s products cause allergic reactions and to write positive reviews about
the products would be unethical. Which of the following decisions will be considered an
ethical lapse?
• To write positive reviews about the product

5. • To turn down the company’s offer
• To write a review after testing the product
• To inform people about the products’ allergic reactions
After a series of thefts in an organization, the management is considering whether or not
to install cameras inside the office. The management is torn between violating the privacy
of employees and preventing future thefts from taking place. This scenario illustrates an
__________.
• ethical dilemma
• ethical lapse
• absence of codes of professionalism
• absence of codes of ethics
Kwalkon Computing released a new software update for their calendar app. The update
synchronizes both personal and business calendars seamlessly. The update has all the
relevant bug fixes and promises to make the app work faster. Since there have been no
recent complaints about the software, the update must have solved all the customers’
issues. Which of the following questions would be most relevant in evaluating the
argument?
• Has enough time passed after the release of the update?
• What is the memory required in order to install the update?
• What is the pace at which the updated app will perform its functions?
• Has Kwalkon released any updates for their other software applications?
Hailey’s Food Inc. sells fish sticks at $3.00 a box. The government passes a law requiring
sellers of food products to pay $0.50 as tax for each product they sell. Hailey’s has to pay
the government $0.50 for every box of fish sticks it sells. The company decides to trade
down to compensate for the tax. Which of the following is a likely outcome of the
company’s decision?
• The company will increase the price of one box of fish sticks to $3.50 while also
increasing the package size.
• The company will sell fish sticks worth $2.50 at $3.00 per box.
• The company will increase the price and quantity of fish sticks.
• The company will continue to sell the same quantity of fish sticks at the same price.
Michael deposits $35,000 today in his bank account. Calculate the approximate amount
he will have at the end of six years if interest is 10% per year and is compounded
semiannually.
$115,560
$70,060
$50,180
$62,860

6. Irvin’s Ice Creams, a popular chain of ice cream parlors present only in the United States,
is looking for opportunities to grow its business. If the firm conducts a SWOT analysis of
its performance, which of the following would be categorized as a threat?
• The growing demand for ice creams in international markets
• The entry of international ice cream brands in the U.S. market
• The firm’s inability to scale up in terms of revenue
• The firm’s positive brand value among customers
The intensive 45-day training program for new employees at Zed Inc. requires trainees to
take several tests that trainers at Zed Inc. have to grade. Recently, there has been a 30%
increase in hiring. With the present number of trainers, it is not possible to finish grading
all the tests in time.
HR manager: The training team should transfer all the tests for the trainees to software
that will grade them automatically. Our hiring budget will not allow the hiring of
additional people to manage the increased number of trainees. Using auto-grading
software will not require any funds from our hiring budget.
Which of the following is assumed by the HR manager?
• Using auto-grading software will allow Zed Inc. to support all of its potential training
needs in the future.
• Trainees will need a shorter duration of time to answer the tests after the auto-grading
software is implemented.
• Zed Inc. will not need to hire additional people to operate the auto-grading software.
• The duration of the training cannot be reduced without negatively affecting the quality
of the training.
Hush Sports Inc., sellers of sportswear, transitioned from being just a brick-and-mortar
store to an online marketplace for sports goods. Hush Sports still relied on customers to
call the store for feedbacks or complaints. To speed up the process, the company updated
its Web site with options for the customers to review the products they purchased.
Positive reviews attracted more customers, and negative reviews helped the company
improve its products. Which of the following strategies has Hush Sports included in its
business process?
• Crowdsourcing
• Cooperative advertising
• Blogging
• Conversational marketing
A shift in the demand curve for pretzels increases the price of pretzels from $1.25 to
$1.75 and its quantity demanded from 30 million to 35 million. The price elasticity of
demand for pretzels is _____.
5 million pretzels per dollar

7. 2.32
$1.50 per pretzel
0.46
Dupon Inc. is a leading manufacturer of handheld game consoles. Each console
manufactured by the firm has a different game. Although the video game industry faced a
sharp decline in demand with the introduction of mobile games, Dupon still holds a
significant market share for handheld games compared to its competitors. To hold the
market share, Dupon provides discounts to customers purchasing more than one console.
Which of the following stages of the product life cycle is Dupon’s products going
through?
• The decline stage
• The growth stage
• The maturity stage
• The introduction stage
LaBelle, a famous cosmetic brand, introduces a new skin cleanser. The company pays
bloggers to write positive reviews about the product. The consumers who follow these
blogs assume that the bloggers are sharing their personal experiences and decide to try
the product. They are unaware that the blogs are part of a marketing campaign. After a
few days of using the product, they complain of rashes and allergies. The bloggers can be
charged with __________.
• assault
• negligence
• battery
• Defamation
Mark is expected to receive $950 at the end of two years. Calculate the present value of
this amount if the discount rate is 6%.
• $1690.99
• $896.23
• $845.50
• $1792.45
Marketers at Cream & Fresh Ice Creams update the company’s web site and online
journals regularly with information about new ice creams. Readers who are interested in
the articles updated on the company’s web site and online journals share the links with
their friends who further share it with more people. Some readers try the ice creams and
add their own comments to the web site and online journals. Which of the following
strategies is the company using to promote its products?
• Telemarketing
• Wholesaling
• Stealth marketing
• Blogging

8. Managers at Hush Sports Inc., leading manufacturers of sports apparel, are contemplating
manufacturing high-end maple baseball bats. To understand the existing demand for the
product, the marketing managers decide to set an online campaign, promoting the product
through blogs, videos, and interactive forums. Which of the following approaches should
the company adapt in its campaign?
• Posting messages that the company would not prefer to convey to an audience face-to-
face
• Replying to the consumer queries about the advantages of using high-end maple
baseball bats
• Restricting the consumers from posting comments on the company’s Web site
• Withholding information that would cause potential concern over the product’s quality
Sophie owns SugarCream bakery that produces 20 pastries in a day. The price of one
pastry is $12. If she hires another worker, she will be able to produce 24 pastries in a day.
Assuming that she operates in a competitive market and aims to maximize her profits, she
decides not to hire the additional worker. Which of the following explains why Sophie
did not hire the additional worker?
• The cost of hiring the additional worker was greater than the value of producing
additional pastries.
• The cost of hiring the additional worker was less than the average product of the
additional worker.
• The cost of hiring the additional worker was less than the marginal product of the
additional worker.
• The opportunity cost of hiring the additional worker was zero.
Rikan Inc.’s credit sales for the year 2016 are $5,000,000, and its gross profit is
$1,500,000. The company’s average inventories are $595,000. Its average accounts
receivable is $750,000 and average accounts payable is $640,000. From this information,
calculate the company’s cash cycle. (Round the answer to one decimal.)
50.1 days
199.5 days
36.8 days
183.5 days
Sam’s stores, a popular retail store, uses barcode scanners to scan each product that it
sells. The data generated from the scanners are saved in a database. The database is
updated every time a product is scanned and sold. This computer-based information
system helps managers access and analyze sales data. Which of the following systems is
the store using for its business?
Transaction processing system
Supply chain management system
Expert system
Electronic commerce system

9. Colneith Corp. is a pharmaceutical firm that mainly produces drugs for Alzheimer’s
disease. The Medical Association of Zachary Islands conducted a study on the
effectiveness of the firm’s drugs and found that multiple dosages of drugs were fatal.
This discovery would most likely lead to:
• short-run profits for the firm.
• a decline in the production of the drug.
• an increase the production of the drug.
• the exit of the firm from the market.
Dupon Inc., a leading manufacturer of handheld game consoles, decides to enter the
global marketplace. It decides to sell its products directly in a foreign country. The
foreign government denies permission to the company on the grounds of protecting
domestic manufacturers. However, the government is willing to change its decision if the
company contributes to local employment. Which of the following strategies of entering
the foreign market will present the least risk to the company while also meeting the
government’s condition?
• Direct exporting
• Joint venture
• Direct investment
• Contract assembly
Which of the following alternatives will give the lowest present value?
• Receiving $650 at the end of three years at an interest rate of 10% compounded
annually
• Receiving $500 at the end of three years at an interest rate of 11% compounded
annually
• Receiving $450 at the end of two years at an interest rate of 9% compounded annually
• Receiving $550 at the end of two years at an interest rate of 8% compounded annually
Tony holds 350 shares of a company’s stock. At the end of 2015, the market price of each
share was $32. During the year 2016, the company pays $2.25 in dividends per share. At
the end of 2016, the company’s stock is priced at $39.50. Calculate the percentage return
for holding the company’s stock during the year 2016. (Round the answer to one decimal
place.)
• 8%
• 5%
• 6%
• 4%
Rodriquez works as a scriptwriter in an advertising agency. He has been assigned the task
of developing a script for a television commercial. He prepares a rough draft of the script
and submits it to his manager, Carl. Carl reads the script but derives a different meaning

10. from it than what Rodriquez intended. According to the basic communication model,
which of the following will be the next step?
• Carl will refuse to provide feedback to Rodriquez.
• Carl will respond with his interpretation of the script.
• Rodriquez will be asked to narrate his script to an audience.
• Rodriquez will choose a communication channel to transmit his message.
The owners of Brizzels’ Food Truck send live notifications to their customers when their
truck is close to the customers’ locations. Their strategy was in response to a customer’s
blog post about having to wait for long hours till the truck arrives. Which of the
following strategies does this scenario illustrate?
• Social commerce
• Social intelligence
• Social publishing
• Social analytics
Managing Director: Our business has expanded over the past couple of years. The profit
margin and revenue earned have both gone up. On careful analysis of our client base, we
have found that all of our clients belong to the same culture as us. They also hold ethical
values that are similar to ours. Based on this finding, it would be best if our company
stops training our employees on cultural sensitivity and instead gives our employees
specialized training in market research analysis.
The Managing Director’s argument is flawed because it:
• disregards the influence that a training on cultural sensitivity could have on the
company’s profit margin.
• fails to consider that the suppliers for the company might belong to a different culture
than the clients.
• takes for granted the continued increase in revenue that the company will experience.
• assumes that training in market research analysis is less expensive than training in
cultural sensitivity.
Calculate the cost of preferred stock from the information given below:
• 73%
• 27%
• 45%
• 98%
When Ronike Ltd. decided to change its logo, it encouraged its employees to get involved
in the decision-making process. Employees were asked to engage in brainstorming
sessions by forming groups and working together in teams. Which of the following is a
likely outcome of their teamwork?

11. • Increased diversity of views among team members will help improve decision making.
• The dangers of groupthink will be reduced.
• Team members are less likely to support the final decision regarding the change in logo.
• Team members who have hidden agendas will be automatically filtered and removed.
Harry is receiving a loan of $3,000 from his friend to pay off some outstanding bills. The
loan is structured in such a manner that the interest rate is 6% for the first year, after
which the interest rate increases by 2% per year until the loan is paid. Calculate the
amount that Harry will have to pay his friend if he waits for a period of four years to pay
off the loan. (Round the answer to one decimal place.)
• $4,231.20
• $4,005.50
• $3,777.80
• $2,127.10
Five years ago, Rigatani Corp. introduced its new energy drink, Energize. According to
recent market surveys, the product is in its decline stage. At the same time Energize was
introduced, Panne Inc. introduced White Unicorn, another new energy drink. Therefore,
White Unicorn must also be in its decline stage now.
Which of the following is an assumption on which the conclusion is based?
• Market surveys are not a reliable method to determine the stages in a product’s life
cycle.
• Consumers have realized that the presence of caffeine in energy drinks is detrimental to
their health.
• Both products were not well received in the market.
• White Unicorn did not spend more time in the maturity stage than Energize did.
Rosa Maria attends an interview for a sales manager position at Pixxels Inc. As part of
the interview process, she is asked to reveal personal information. The company gets
Rosa’s consent to share the information with a security company for background
verification. Which of the following actions, if taken by the security company, will be
unethical?
• Contacting Rosa’s previous employer for verification
• Selling Rosa’s personal information to a third party
• Requesting for additional information
• Providing Pixxels Inc. reports on Rosa’s online behavior
The government of Seronia is deeply concerned about the rate of obesity in the country. It
has framed a policy that requires food and beverage manufacturers to be taxed according
to the sugar and fat content in their products. This will make high-sugar and high-fat
products more expensive for consumers. The government believes that this policy will
surely benefit the health of Seronian citizens.

12. Which of the following statements, if true, would undermine the government’s argument?
• The policy is not applicable to food products that are not manufactured within Seronia.
• Recent campaigns done by nutritionists have increased consumer awareness about the
adverse effects of a high-calorie diet.
• The Seronian government’s expenditure on providing health care to its citizens has
steadily increased over the last ten years.
• Consumers tend to decrease the consumption of some healthy food products to afford
the prices of high-sugar and high-fat products, which are tastier.
Marketing head of Tosel Inc.: Our company has been using an advanced CRM platform,
Inito, which is popular among businesses for its sophisticated functionality. Inito allows
us to store customers’ psychographic data as well as their recent shopping behavior.
However, since we began using Inito, we have not been able to generate a significant
greater number of leads. Clearly then, using CRM software does not help in generating
any business.
Which of the following statements, if true, would weaken the argument above?
• It is difficult to create a successful marketing strategy for a customer base that greatly
varies in demographic and psychographic factors.
• Inito is the most commonly used CRM platform.
• Tosel has integrated Inito into the other information systems used by the company.
• Tosel has not invested the resources required to maintain its database of customers’
psychographic data and shopping behavior.
Cream & Fresh Ice Creams pays bloggers to write positive reviews about its ice creams.
Readers who are interested in the product read these reviews and share the link with their
friends who further share the reviews with more people. Some readers try the ice creams
and add their own comments to the blog. Which of the following strategies is the
company using to promote its products?
• Stealth marketing
• Wholesaling
• Online word-of-mouth marketing
• Telemarketing
In 2005, Susana purchased a 7-year zero coupon bond for $967.23. The face value of the
bond was $1,200. Calculate the capital gain on this bond in 2006.
• $42.56
• $30.75
• $78.56
• $23.56
Truno Corp. plans to purchase new project management software. There are three
available choices in the market: Telpro, Morse, and Verla.

13. Systems manager: I have compared the three available choices. All three choices are
similar in quality, features, and usability. However, Morse is the most commonly used
software, and it also has the lowest purchase price. Therefore, the best choice of project
management software for us would be Morse.
Which of the following statements, if true, would strengthen the systems manager’s
argument?
• Morse is easily customized to fit individual customer needs.
• Employees at Truno Corp. do not support the idea of using project management
software.
• The project management requirements of other users of Morse are not similar to those
of Truno Corp.
• The prices of Verla and Telpro have fluctuated considerably over the past 5 years.
MaxSale, a popular supermarket, is approached by Hartane’s, an organic food producer,
to sell its products through the supermarket’s stores. MaxSale demands a substantial
amount of money to display these products for a minimum duration. MaxSale uses this
strategy to charge premium amounts to a select few producers as a means to reduce
competition. By doing so, which of the following consumer rights is MaxSale violating?
• The right to be informed
• The right to be heard
• The right to choose
• The right to safety