[Nov 18, 2021] Verified CORe dumps and 265 unique questions
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NEW QUESTION 140
A criminologist wants to investigate the relationship between income, gender composition, and the number of violent crimes. The criminologist collects data from the 50 U.S. states on the number of violent crimes committed in 2012, the percentage of the population that is male, andper capita income in each state. Regression results and residual plots for the regression are provided below.
The criminologist find that the correlation between the percent of the population that is male and per capita income is -0.053. Aside from the fact that neither slope coefficient is statistically significant, what other regression issue is MOST likely occurring in this model?
- A. Multicollinearity
- B. Lagged variables
- C. Homoskedasticity
- D. Heteroskedasticity
Answer: D
NEW QUESTION 141
Company B recorded a transaction with a debit of $10,000 to deferred revenue and a credit of $10,000 to revenue. Which of the following situations BEST describes the transaction that would lead to this journal entry?
- A. Company B sold a product for $10,000.
- B. Company B received an order for a product at the price of $10,000.
- C. Company B delivered a product for which $10,000 had already been paid.
- D. Company B collected $10,000 for a product that had not been delivered.
Answer: C
NEW QUESTION 142
The following regression equation shows the relationship between the cost of homeowner's insurance and two variables: the home's distance from the waterfront (in miles) and the amount spent on the home's security system (in dollars).
Cost of Homeowner's Insurance = 3,000 - 300*(distance from waterfront) - 10*(amount spent on security systems)
Which of the statements below accurately describes this relationship?
- A. Provided the amount spent on security systems remains constant, for each additional mile a house is from the waterfront, the cost of homeowner's insurance decreases by $300 on average.
- B. Provided the distance from the waterfront remains constant, for each additional dollar spent on a security system, the cost of homeowner's insurance increases by $10 on average.
- C. For each additional mile a house is from the waterfront, the cost of homeowner's insurance decreases by $300 on average.
- D. As a house's distance from the waterfront increases by 300 miles, the amount spent on security systems decreases by $10 on average.
Answer: A
NEW QUESTION 143
A company's Balance Sheet for the year ended Dec. 31, 2013 is as follows:
(In millions)
The company is MOST likely in which of the following industries?
- A. Pharmaceutical
- B. Civil aviation
- C. Retailing
- D. Commercial banking
Answer: C
NEW QUESTION 144
Company A has a Weighted Average Cost of Capital (WACC) of 12 percent. They are evaluating four different projects/investments with financial flows as described below. Available funds are limited, so they can only pursue one of the investment alternatives. Each project/investment involves an initial outflow of $1,000,000 and has an eight year life.
Which project should they select?
- A. Project 3
- B. Project 4
- C. Project 1
- D. Project 2
Answer: B
NEW QUESTION 145
A government is considering issuing a fixed number of permits allowing firms to pollute. When would this system fail to reduce pollution?
- A. If the government issued too many pollution permits
- B. When the price for a unit of pollution is too high
- C. During an economic expansion
- D. When the system is applied to all industries
Answer: A
NEW QUESTION 146
Mobile telephone providers often require customers to enter two-year contracts, with the stipulation that these customers pay a termination fee if they would like to end their contracts early. A new mobile telephone provider offers to pay customers' early termination fees if they are currently in a contract but would like to change providers. If the goal of the company is to gain as many new customers as possible, it might be offering this promotion in order to:
- A. differentiate its brand by requiring shorter contracts.
- B. compete for a customer segment that is interested in different mobile phone models.
- C. compete with existing carriers by offering the lowest costs plans.
- D. overcome the barriers to entry induced by high customer switching costs.
Answer: D
NEW QUESTION 147
The only bakery in a small town has introduced a new type of cookie and is not sure what demand for the cookie looks like. How could the bakery determine the marginal revenue earned by each additional cookie produced?
- A. Ask customers to fill out a survey about how a change in price would affect their purchasing decisions
- B. Decrease the price by small increments and observe the corresponding changes in quantity sold and revenue
- C. Conduct a focus group to determine how sensitive customers are to price changes
- D. Increase advertising to raise demand and sell more cookies
Answer: B
NEW QUESTION 148
After a major storm cuts off power to a large city, the local government passes an anti-gouging law to prevent a surge in the price for gasoline. After the law is in place, government officials learn that a side market for gasoline has developed, in which suppliers are procuring gasoline from surrounding areas and charging more than the legal price. Should the government shut down the side market?
- A. Yes; shutting down the side market will signal to the market that gasoline suppliers should sell more gasoline at the legal price.
- B. Yes; otherwise the existence of the side market will result in an increase in the legal price of gasoline.
- C. No; the shortage of gasoline would become more severe if the government shut down the side market.
- D. No; by ignoring this side market, the government will be able to collect significant tax revenue.
Answer: C
NEW QUESTION 149
Which of the following options represent implicit transactions? (Select all that apply.)
- A. Recording a loss on the sale of a piece of plant equipment
- B. Interest expense accrued at the end of the fiscal year
- C. The repurchase of shares of the company's stock
- D. The recognition of revenue over time related to payment received in advance for a multiyear contract
- E. An inter-company sale of goods under a short term agreement
Answer: B,D
NEW QUESTION 150
A company wants to sell an extremely rare antique. The company does not know how highly consumers value the antique, but it knows that any single consumer's value will rise if the consumer believes other people have a high value for the antique. How should the company sell the item to maximize its price?
- A. Conduct an English (open outcry) auction
- B. Conduct a sealed first-price auction
- C. Conduct either a Vickrey (sealed second-price) auction or a sealed first-price auction
- D. Conduct a Vickrey (sealed second-price) auction
Answer: A
NEW QUESTION 151
A professor asks a class of 100 students to spend the weekend sampling the heights of adults. After each student samples 30 adults, the student is then asked to calculate the mean of his or her sample. As the professor collects the individual sample results from each student, which of the options below is the MOST likely to be observed?
- A. As more samples are collected, the sample means will converge to the true population mean.
- B. As more samples are collected, the average of the sample means increases but will not converge to the true population mean.
- C. As more samples are collected, the sample means may vary but the average of the sample means will converge to the true population mean.
- D. As more samples are collected, the average of the sample means decreases but will not converge to the true population mean.
Answer: C
NEW QUESTION 152
Changing accounting assumptions from year to year without having justifiable reasons for the changes is a departure from the accounting principle of:
- A. Historical cost
- B. Conservatism
- C. Consistency
- D. Verifiability
Answer: C
NEW QUESTION 153
In finance, beta is a measure of the systematic risk of a security in comparison to the market as a whole. Beta can be found by running a regression analysis of the monthly returns of the security versus the monthly returns of the general market. The regression output table below shows the relationship between Boeing's monthly returns and the monthly returns of the Standard and Poor's 500 (S&P 500) which is a stock market index of 500 large companies.
If beta is the average change in Boeing's monthly returns as the monthly returns of the S&P 500 increase by one, what is Boeing's beta?
- A. 0.5204
- B. 0.2708
- C. 0.0100
- D. 1.1400
Answer: D
NEW QUESTION 154
On a balance sheet, assets are arranged in the order of:
- A. Stability
- B. Liquidity
- C. Materiality
- D. Profitability
Answer: B
NEW QUESTION 155
A government agency is interested in developing the most accurate forecast for the poverty rate in the United States and decides to perform regression analyses using a combination of the following independent variables: the percent of women in the labor force and the percent of the population that is uninsured. The agency collects data from all 50 U.S. states but is unsure whether both variables should be in the model. The agency runs three regressions:
Regression A. Poverty Rate = a + b1*(Percent of women in the labor force) + b2*(Percent uninsured)
Regression B. Poverty Rate = a + b*(Percent of women in the labor force)
Regression C. Poverty Rate = a + b*(Percent uninsured)
The regression statistics for all three regressions are given below. Based on these statistics, which model should the agency use to obtain the MOST accurate forecast?
- A. Regression A
- B. Regression C
- C. Regressions A and B provide equally accurate forecasts
- D. Regression B
Answer: D
NEW QUESTION 156
A study is conducted to determine what factors drive used car prices. The study initially examined two variables: the make of the car and the number of miles driven on the car. Not surprisingly, the group commissioning the study found that there was a strong relationship between these two variables and price. In an attempt to explain more of the variation in price the researcher added a thirdvariable:the car's age (in years).A prior study had shown that age was a significant factor in explaining used car selling prices. When added to the new model, however, the group found that although adding age explained more of the variation in price, age was no longer significant when combined with the car's make and miles. This problem is an example of:
- A. lagged variables
- B. homoskedasticity
- C. heteroskedasticity
- D. multicollinearity
Answer: D
NEW QUESTION 157
The owner of a t-shirt store on a beach sells 200 shirts per month in the summer for a price of $15.00. During the winter months, the owner reduces the price to $9.00 and sells 100
shirts per month. The store must be leased in one-year increments at $400 per month in rent. The cost of labor, materials, and utilities are an additional $600 a month. Should the store remain open during the winter months?
- A. Yes, the store should remain open during the winter months.
- B. No, the store should shut down during the winter months.
- C. Yes, the store should remain open but should lower prices to $6.00 during the winter months.
- D. No, the store should shut down completely.
Answer: A
NEW QUESTION 158
In calculating cash flows, which of the following scenarios would lead to a decrease in net working capital?
- A. A decrease in current liabilities greater than a decrease in current assets
- B. An increase in current assets greater than an increase in current liabilities
- C. A decrease in net operating fixed assets
- D. An increase in current liabilities greater than an increase in current assets
Answer: D
NEW QUESTION 159
An airline company wants to improve its understanding of its product and customers. Using an internal model, the company predicts that business class revenues will decrease if the price of business class is reduced, but coach class revenues will increase if the price of coach class is reduced. Why might this be the case?
- A. Coach travelers often pay out of their own pocket, whereas business travelers do not.
- B. Business class travel is a luxury good.
- C. Coach travelers typically have a lower opportunity cost of time than business travelers.
- D. There are too many business class seats in the airplane.
Answer: C
NEW QUESTION 160
Company B has the following summarized Statement of Cash Flows for the year. Company B is MOST likely in what stage of the business life-cycle?
- A. Profitable - moderate growth
- B. Mature - no growth
- C. Declining - shrinking
- D. Start-up - fast growing
Answer: A
NEW QUESTION 161
In Dec. of 2013, a company signed a promissory note and recorded a note payable of $150,000. This note is payable in three equal annual installments beginning from Dec. of 2014. How should the company report the note payable on its Dec. 31, 2013 balance sheet?
- A. $150,000 in noncurrent liability
- B. $50,000 in current liability and $100,000 in noncurrent liability
- C. $50,000 in noncurrent liability and $100,000 in current liability
- D. $150,000 in current liability
Answer: B
NEW QUESTION 162
Which of the following items would be considered a relevant cash flow for capital budgeting purposes?
- A. Intangible and qualitative factors
- B. Fixed operating expenses that will be incurred no matter which alternative is chosen
- C. Research expenses incurred during the previous three years
- D. Incremental investment in working capital as the sales revenue increases
Answer: D
NEW QUESTION 163
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