1. Which of the following is NOT an action company co-managers can take to help meet or beat
the investor-expected increases in the company's stock price in upcoming years?
- Making it company practice to issue additional shares of stock each year and use the
proceeds to pay down the debt outsta...
which of the following is not an action company co managers can take t
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globus quiz 2 questions and answ
1. Which of the following is NOT an action company co-managers can take to help meet or beat
the investor-expected increases in the company's stock price in upcoming years?
- Making it company practice to issue additional shares of stock each year and use the
proceeds to pay down the debt outstanding until the company's debt-equity
percentages reach 20% or lower for debt and 80% or more for equity
- Increasing annual dividend payments to shareholders most every year
- Making it a frequent management practice to allocate a portion of internal cash flows from
operations to repurchasing shares of the company's common stock
- Putting increased attention on boosting operating profits in all four geographic regions -- the
resulting growth in operating profits companywide will act to increase total net profits and
EPS; higher earnings per share are an important driver of the company's stock price
- When the company's stock price drops because of unexpectedly weak company performance
in the prior year but is expected to recover and rise in the next several decision rounds.
opting to borrow money preferably in the form of 1-year loans from the Global Community
Bank (but not so much as to impair the company's credit rating) and using the borrowed
funds to repurchase outstanding shares of common stock
2. Which of the following is NOT an action company co-managers can take that has good potential
for increasing the company's average ROE and helping the company meet or beat the
investorexpected ROE targets in upcoming years?
- Pursuing efforts to boost total operating profits in all four geographic regions -- the resulting
growth in operating profits companywide will increase total net profits (a company's net profits
are the numerator in calculating the company's ROE)
- Paying a small annual dividend to shareholders (less than $0.50 per share) which is
increased annually by about $0.05 per shares; a small but growing dividend provides
the company with more cash to fund capital expenditures and/or pay down bank
borrowings ahead of schedule
- Using a portion of the company's internal cash flows from operations for the next several
years to repurchase shares of common stock
- Borrowing money from the Global Community Bank (preferably in the form of a 1-year loan
that can be fully or mostly repaid the following year) and using the proceeds to repurchase
outstanding shares of common stock: such action makes considerable financial sense when
the company's stock price is expected to rise substantially in future years and/or when
unexpectedly weak company performance in the prior year causes a drop in its stock price
- Increasing annual dividend payments to shareholders (because all net profits not paid out as
dividends are treated as retained earnings and because bigger retained earnings have the
effect of increasing shareholders equity)
3. Which one of the following is NOT a way to improve the P/Q rating of a company's brand of
action-capture cameras?
- Adding one or two more extra performance features
- Increasing the image sensor size and the resolution of the LCD display screen
- Increasing expenditures for camera R&D
- Spending several more dollars on the camera housing and on included accessories
- Increasing the number of models in the company's lineup of multi-featured cameras
4. If a company pays each camera PAT member a base wage of $21,000, thereby resulting in base
wages of $84,000 per 4-person PAT, and if camera PATs work an average of 2,000 hours per
year to assemble 3,000 cameras annually, it follows that
- the hourly base wage cost for a PAT to assemble a camera would be $30.00 and that the
labor cost of assembling a camera at overtime would be $60.00 per PAT.
- the hourly base wage cost for a PAT to assemble a camera would be $28.00 and that
the labor cost of assembling a camera at overtime would be $42.00 per PAT.
- the hourly base wage cost for a PAT to assemble a camera would be $24.00 and that the
labor cost of assembling a camera at overtime would be $36.00 per PAT.
- the hourly base wage cost for a PAT to assemble a camera would be $10.50 and that the
labor cost of assembling a camera at overtime would be $15.75 per PAT.
,- the hourly base wage cost of assembling a camera would be $28.00 and that the labor cost
of assembling a camera at overtime cannot be determined from the available information due
to the lack of information about compensation payments for assembly quality incentives.
perfect attendance bonuses, and the cost of fringe benefit packages
5. Actions that can lead to higher labor productivity in assembling cameras/drones do NOT include
- increasing the annual bonus for perfect attendance paid to cameraidrone PAT members from
$800 to $875.
- reducing the number of camera/drone models being assembled.
- boosting the minimum number of cameras/drones that camera/drone PATs are
expected to assemble each week -- such failure to achieve the weekly quota in as
many as 4 weeks a year constitutes automatic disqualification for year-end perfect
attendance bonuses.
- increasing total annual compensation per camera/drone PAT member by a minimum of 2%
and a maximum of 5% annually.
- increasing annual expenditures to train camera/drone PATs in best practice assembly
methods and ways to improve productivity from S2.000 per PAT to $2,250 per PAT
6. The website prices virtually all companies in the industry charge Asia-Pacific buyers for UAV
drones are likely to be higher than the website prices they charge UAV drone buyers in North
America
because the administrative costs per drone sold that companies incur on sales to buyers in
the Asia-Pacific region are over $10 higher than those incurred on sales to buyers in North
America.
because unfavorable exchange rate adjustments are consistently $10 to $30 higher on sales
to buyers in the Asia-Pacific region than for buyers in North America.
because the corporate profits taxes that all companies have to pay to governments in the
Asia-Pacific region are 35% higher on average than the corporate profits companies have to
pay governments in North America.
when the import duties on shipments of UAV drones to buyers in the Asia-Pacific
region are significantly bigger than the import duties on shipments of UAV drones to
buyers in North America.
because the production/assembly costs per drone that companies incur on UAV drones
shipped to the Asia-Pacific region are many dollars higher than production/assembly costs
per drone shipped to North America.
7. After each decision round, company managers should make a point of examining the
information on p. 2 of the Company Operating Report that concerns the company's profitability
in the action camera segment in each geographic region because
total operating profits and operating profit margins are very likely to be lower in some
regions than others and because management needs to take actions to boost its
profitability in the underperforming regions in the upcoming decision round.
this report provides the company's management team with convincing documentation of the
precise reasons why the company's camera-related operating profits and operating profit
margins were bigger in some regions than in others.
this report provides superb guidance about how much the company needs to raise/lower its
average wholesale camera prices in each geographic region.
this report provides superb documentation about whether the company spent too much or too
little in each region on advertising, retailer support, and website product displays/info in the
just-completed decision round.
the information in this report allows managers to see in which regions the company was most
, competitively successful and least competitively successful, competitive factor by competitive
factor.
8. Which one of the following actions helps boost a company's image rating/brand reputation?
Using environmentally friendly camera components and recycled materials for manuals and
packaging for the company's action cameras
Charging camera retailers an average wholesale price that is typically 10% or more below the
highest price being charged in the region
Paying camera/drone PAT members attractively high total annual compensation packages.
thereby enabling them to enjoy a standard of living well above the Taiwan average
Making it standard practice for the company to offer all buyers of its camera and drones a full
1-year warranty
Increasing the PIQ rating of the company's UAV drones
9. Which of the following combinations of actions will likely provide the LEAST competitive
benefits
in helping a company catch the eye of action camera shoppers. significantly boost overall buyer
appeal for its cameras versus rival brands, and cause more camera shoppers to purchase its
brand instead of rival brands in each of the four geographic regions?
Increasing expenditures for website product displays/info $100,000 in all four regions
and increasing advertising expenditures by $250,000 in all four regions
Increasing the warranty period from 90 days in each region to 180 days in each region and
increasing the number of camera models from 4 to 6
Boosting spending for retailer support by $500,000 in all four geographic regions and
instituting $7 reductions in the average wholesale prices charged to camera retailers in each
geographic region
Boosting its P/Q rating from 5.5 stars to 6.3 stars and increasing spending for advertising
from levels that are $1,000,000 above the prior-year regional averages to levels about
$3,000,000 above the prior-year regional averages in all four geographic regions.
Boosting the number of weekly sales promotion from 4 to 7 in all four regions and also
increasing the percentage discounts to camera retailers during these promotions from 11% to
15%
10. If a company earns net income of $40 million in Year 8, has 10 million shares of common stock
outstanding, pays a dividend of $1.00 per share, and has annual interest costs of $10 million,
then
the company would have Year 8 earnings per share of $3.00 and retained earnings of $20
million.
the company's EPS for Year 8 would be $2.00, its dividend payout for Year 8 would equal
25% of net income, and its cash flow from operations would be $20 million (net income of $40
million less dividend payments of $10 million less interest costs of $10 million).
the company's retained earnings for the year would be $30 million: the $30 million in retained
earnings would be shown on the company's balance sheet as a reduction in equity
investment by stockholders in Year 9.
the company's EPS for Year 8 would be $4.00 and its retained earnings for Year 8
would be $30 million (net income of $40 million less dividend payments of $10 million);
the $30 million addition to retained earnings would cause shareholders' equity
investment to increase by $30 million in Year 8.
the company's retained earnings for the year would be $20 million (net income of $40 million
less dividend payments of $10 million less interest costs of $10 million) and its earnings per
share would be $2.00.
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