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San Jose State University - MARKETING 155 Spring 2013 Chapter 5 1)What is the smartest price strategy? a

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San Jose State University - MARKETING 155

Spring 2013

Chapter 5

1)What is the smartest price strategy?

a. Choose a pricing strategy that incorporates the psychology of pricing.

b. Pick a pricing strategy that is different from the competition's strategy.

c. Offer the lowest price that you can afford to offer.

d. Find the lowest cost products from your suppliers.

 

 

2. To break even, a business must ________.

a. sell enough units to cover all its costs

b. sell enough units to cover its fixed costs

c. sell enough units to earn a profit

d. sell enough units to cover variable costs

 

 

3. Which of the following is a role of the marketing plan?

            a. Convincing skeptical investors that your plan has merit.

            b. Identifying the target market for the organization.

            c. Detailing the advertising plan.

            d. All of the above.

 

 

4. Which of the following is one of the four Ps of marketing?

a. population

b. publicity

c. product

d. packaging

 

 

 

5. Good marketers know that a(n) __________ is the heart of the marketing plan.

            a. researching suppliers

            b. sales forecast

            c. analysis of the market

            d. price/profit schedule

 

 

6. Promotion consists of ________.

a. other promotional devices such as discount coupons and giveaways

b. advertising

b. publicity

d. All of the above.

 

 

 

Chapter 7

7. A ________ is a model or pattern that serves as an example of how a product would look and

operate if it were manufactured.

a. prototype

b. archetype

c. typology

d. model

 

 

 

8. There are two categories of variable costs ________.

a. net variable costs and cost of goods sold

b. gross costs and net variable costs

c. cost of goods sold and other variable costs

            d. interest and taxes paid

 

 

9. The percentage of value of an asset subtracted each year until the value becomes zero; To reflect wear and tear on the asset is called ________.

a. depreciation

b. inventory

c. deductible

d. reduction

 

 

10. ________ will tell you how long it will take you to earn enough profit to cover your start-up

Investment.

a. Return on sales

b. Return on assets

c. Payback

d. ROI

 

 

11. Fixed Operating Costs ________.

a. are not included in COGS

b. are not direct costs of creating each product

c. include expenses like the DSL bill and rent

d. All of the above.

 

 

12. Business start-up cost information can be obtained from ________.

a. competitors

b. quotations from vendors

c. industry data

d. All of the above.

                                         

 

13. Entrepreneurs use the following financial statements to run their business:

a. monthly income statement.

b. monthly ending balance sheet.

c. monthly cash flow statements.

d. All of the above.

 

 

Chapter 8:

 

14. In the income statement, EBIT minus interest costs equals ________.

            a. gross profit

            b. pre-tax profit

            c. net profit

            d. COGS

 

 

15. Cash itself or items that could be quickly turned into cash or will be used within 1 year are called ________.

a. liquid assets

b. long-term assets

c. current assets

            d. liquid cash

 

 

16. What analytic tool allows you to compare income statements from different periods, even if the dollar figures are very different?

a. income analyses

b. asset analyses

c. financial ratios

d. same-day statements

 

 

 

17. Because different types of assets depreciate at different rates, and because they are purchased at various points in time businesses keep a __________ to track the valuation of each asset that is being depreciated.

a. income statement

b. balance sheet

c. depreciation schedule

            d. cash flow statement

 

 

 

18. Successful entrepreneurs use their financial records to prepare ________ income statements that show sales and costs for the previous period.

a. monthly

b. quarterly

c. yearly

d. All of the above.

 

 

19. An income statement shows whether the difference between revenues (sales) and expenses (costs) is a profit or a ________.

a. loss

b. net profit

c. breakeven

            d. semi-loss

 

 

 

 

 

Chapter 9 Cash Flow and Taxes-

 

20. Which of the three financial statements an entrepreneur prepares is used to guide the day-to-day operations of the business?

a. the cash flow statement

b. the income statement

c. the balance sheet

            d. tax returns

 

 

21. Which business below is most likely to have cash flow that is cyclical?

a. gas station

b. pet food business

c. tax return preparation business

            d. grocery store

 

 

 

22. A burn rate is ________.

a. the number of months a business can survive without making sales

b. the amount of cash per month a business can spend before it runs out of cash

c. the amount of cash a business burns on rent per month

            d. the number of days a business can survive without making sales

 

 

23. Entrepreneurs should always ________.

a. ask to be audited by the IRS

b. pay self-employment tax

c. keep records, file returns, and pay taxes on time

            d. attempt to make the highest profit possible

 

 

24. As a sole proprietorship, you sell tangible products to the public at retail. You will need to pay ________.

a. sales tax

b. self-employment tax

c. services tax

d. Both A and B.

 

 

25. Corporate, partnership, individual income tax, and __________ tax returns must be filed on time with the U.S. Internal Revenue Service.

a. state

b. local – city or county

c. self-employment

d. township