1. In  project management the acronym CPM is used for:

a) Communist Party of Marx

b) Critical Project Methods

c) Critical Path Method

d) Common Program Milestone

 2. The basic difference between macroeconomics and microeconomics is that

a) Macroeconomics looks at the forest (aggregate markets), while microeconomics is concerned with the individual trees (subcomponents).

b) Macroeconomics is concerned with policy decisions, while microeconomics applies only to theory.

c) Microeconomics is concerned with the forest (aggregate markets), while macroeconomics is concerned with the trees (components).

d) Opportunity cost is applicable to macroeconomics, and the fallacy of composition relates to microeconomics.

3. If the service rate decreases as the arrival rate   remains constant, then, in general:

a) customer waiting time increases.

b) customer waiting time decreases.

c) service costs increase.          

d) customer dissatisfaction decreases.

 4. Which of the following is NOT an example of an opportunity for a firm?

a)  Identification of a previously overlooked market segment

b)  Improved buyer or supplier relationships

c)  Positive changes in regulatory circumstances

d)  Strong reputation and image with a key demographic

 5. The demand of a product is 20, 25, 35, 50 units with probability .2, .3, .4, and .1, respectively. The probability that demand will be at least 30 is:

a)  .1

b)  .5

c)  .8

d)  .9

6. Products are classified as being business or consumer products according to the

a) objectives of the firm

b) buyer's intended use of the product

c) types of stores from which they are bought

d) Seller's intended use of the product

7. Assume that until yesterday, one U.S. dollar could be exchanged for 85 Japanese yens. Today, a dollar gets you 102 yens. Which of the following statements is true?

a) U.S. goods will be more expensive in Japan.

b) Japanese goods will be more expensive in the U.S.

c) U.S. goods will be the same price in Japan.

d) Japanese goods will be the same price in the U.S.

8. Alabama Airlines has three planning specialists who help division managers develop their own division plans. Serving as consultants to the divisions, the planning specialists give advice about strengths, weaknesses, opportunities, and threats. Alabama Airlines is utilizing what approach to the planning function?

a) Centralized planning department

b) Decentralized planning staff

c) Planning task force

d) Centralized planning committee

9. Which of the following would be most likely to   lead to a decrease in a firm’s dividend payout ratio?

a) Its earnings become more stable.

b) Its access to the capital markets increases.

c) Its R&D efforts pay off, and it now has more high-return investment opportunities.

d) Its accounts receivable decrease due to a change in its credit policy.

10. Below is the common equity section (in millions) of a company’s last two year-end balance sheets:

                                 2005              2006

Common Stock            $1,000            $2,000

Retained Earnings        $2,340            $2,000

Total common Equity   $3,340             $4,000

This company has never paid a dividend to its common stockholders.  Which of the following statements is CORRECT?

a) The company’s net income in 2006 was higher than in 2005.

b) This company issued common stock in 2006.

c) The market price of this company’s stock doubled in 2006.

d) This company had positive net income in both 2005 and 2006, but the company’s net income in 2006 was lower than it was in 2005.

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