MGT311 Final Exam (July 2014)

1.      The manager at a construction site observes that he is spending a great deal of time interviewing prospective employees. This is due to the large amount of absenteeism and turnover among his skilled workers. While questioning exiting employees, he discovers that many of them quit because they feel the work place is too dangerous. In particular, several foremen have stated that the need to get the job done quickly is more important than a few rules, and have gone as far as to mock the courage of workers who question this attitude. What is the best way for the manager to control the deviant behavior of the foremen?

Ordering the foremen to conform with the required safety standards

Finding out why the foremen place a greater importance on finishing the job than on safety

Firing the foremen and promoting new foremen from the current pool of workers

Taking over the work of the foreman himself

 

2 Tony loves programming. He was on the ground level of the computer revolution. This year his boss has set personal goals for each of the programmers, one of which includes a presentation from each programmer about a project. Tony is very annoyed because he has a tremendous amount of work to do and he will have to spend the weekend, his personal time, preparing the presentation. Taking into account self-determination theory, why did his manager’s goals and the presentation reduce Tony’s motivation?

 

The self-imposed goal increases his sense of competence, causing the intrinsic motivation to suffer.

The externally imposed goal feels coercive, causing Tony’s intrinsic motivation to suffer.

The internally imposed goal feels coercive, causing Tony’s intrinsic motivation to suffer.

The externally imposed goal is an external reward, causing Tony’s intrinsic motivation to increase.

 

 

3 Angelina feels that her cubicle neighbor talks too loudly on the phone, but in other ways she is a great neighbor. Angelina gets annoyed every time her neighbor’s phone rings, but she has decided it is simply not worth the trouble to talk to her neighbor. What is Angelina’s conflict intention called?

 

Avoiding

Compromising.

Collaborating

Accommodating

 

4 Regardless of the composition of a group, managers can leverage diversity to achieve superior performance by which of the following approaches?

 

Ensure that everyone knows the importance of diversity in groups.

Emphasize the higher-level similarities among members.

Explain the legal and ethical implications involved of not having a diverse group.

Focus on the benefits of having a diverse group.

 

5 What is the degree to which a person identifies with his or her job, actively participates in it, and considers his or her performance as being important to self-worth?

 

Job stability

Organizational commitment

Job involvement

Job satisfaction

 

6  When your superior offers you a raise if you will perform additional work beyond the requirements of your job, he or she is exercising ________ power.

 

Legitimate

Reward

Personal

Coercive

 

7   Basing managerial methods on the best available scientific evidence is called what?

 

Organizational behavior

Evidence-based management

Conceptual management

Systematic study

 

8 If there is a basic conflict between the individual’s expectations and the reality of working in an organization, the employee is most likely to be disillusioned and quit during which stage of socialization?

 

Metamorphosis

Encounter

Prearrival

Ritual

 

9 In her work in the publishing industry, Vera seeks out new authors whom she considers promising. In the past 2 years she has found a number of new writers whose work she thought was exceptional, and immersed herself in the task of helping them shape their manuscripts for submission to her managers for publishing. Although she was extremely proud of the results, none of the authors she worked with were chosen for publication. Vera believes that the decision not to publish these authors was based on personal rivalries within management, rather than the quality of her writers’ work. She is extremely frustrated, dreads coming into work each morning, and is seriously thinking of resigning. How can Vera’s job attitude best be described?

 

Low job satisfaction and high job involvement

High job satisfaction and low job involvement

High job satisfaction and high job involvement

Low job satisfaction and low job involvement

 

10 Effective workforce programs that encourage diversity have three distinct components. First, they inform managers about the legal framework for equal employment opportunities and encourage fair treatment. Second, they teach managers how a diverse workforce will be better able to serve a diverse market of customers and clients. Third, they

 

foster personal development practices that bring out the skills and abilities of all workers

generally involve one-shot training sessions that don’t take up an undue amount of time

ensure that certain groups have not been underutilized

ensure top-level management represents the diversity of its workforce and client base

 

11 ________ are consistent with recent efforts by companies to reduce costs, cut overhead, speed up decision making, increase flexibility, get closer to customers, and empower employees.

 

Narrower spans of control

Wider spans of control

Matrix structures

Simple structures

 

12 Political behaviors usually

 

Are counter productive to individual goals

are seen only in large organizations

are frowned upon by organizational leaders

lie outside of an individual’s specified job performance

 

13  Julia works as a receptionist at a real-estate company. Her boss just came in the door and yelled at her, telling her that the front office was a mess and that she needed to get up and clean it immediately. After her boss left the room, Julia grabbed three magazines and violently slammed them into the trash can. Which of the following best describes Julia’s action?

 

An affect

A thought

An emotion

A mood

14 A  incompatibility between two or more attitudes or between behavior and attitudes results in what?

 

Attitudinal clarification

Values clarification

Cognitive dissonance

Organizational dissonance

 

15 Janet needs to assign a very important advertising account to one of her writers. First she reviewed each writer’s work load, then she studied the sales data of the products for the last three campaigns of each writer, then she reviewed each writer’s annual review to familiarize herself with their goals. Finally, she gave the account to Paula, a very creative, efficient writer who has had high sales results with her last three clients’ products. What is Janet’s management style is based on?

 

Substantive evidence approach

Organizational behavior studies

Systematic study

Preconceived notions

 

16 What term is used for those emotions that an organization requires workers to show and considers appropriate for a given job?

 

Displayed emotions

Conditional emotions

Felt emotions

Required emotions

 

17 Which tactic to overcome resistance to change is a relatively easy way to gain the support of adversaries, but may backfire if the targets become aware of the tactic?

 

Conciliation

Cooperation

Coercion

Manipulation

 

18 Araceli is a team member in a large corporation. She never speaks in the team meetings because she has seen members talk behind each others’ backs outside of the meetings. Members are constantly monitoring the other member’s work, looking for a mistake to point out in a meeting. According to the information provided, which contextual factor is most likely hindering the success of Araceli’s team?

 

Climate of trust

Adequate resources

Performance evaluations

Team structure

 

19 What is the process through which employees are adapted to an organization’s culture?

 

Mentoring

Socialization

Institutionalization

Personalization

 

20 Today Marci’s boss entered her cubicle and told her that her work has been fantastic, and that because of her last project the client is going to give the company all of their business. Marci’s boss continued to talk about what a great job she’s doing. When her boss left, Marci felt very confident and satisfied with herself and her job. Marci’s boss uses communication in which of the following functions?

 

Control

Motivation

Emotional expression

Information

 

21  What can managers do to make sure that important information is not withheld from them through silence?

 

Deal with information overload.

Interpret what they see and call it reality.

Tell employees what they want to hear.

Listen to and support diverse opinions.

 

22 When Neal Patterson, CEO of Cerner Corporation, sent his seething e-mail to 400 managers, he erred by selecting the wrong

 

message

emotional charge

channel for his message

distribution

 

23 If individuals resisting change are included in making change decisions in an attempt to gain their support, what is this approach called?

Coercion

Cooptation

Manipulation

Exploitation

 

24  Erin works on a software help desk. After being yelled at by a customer about the state of her company’s software, she becomes angry, and has to take a short break to calm down. What makes her anger an emotion, rather than a mood?

 

It can be controlled given some time.

It has contextual stimulus.

It interferes with her capacity to work effectively.

It is a simple, unambiguous feeling.

 

25 Ayesha is leading a group to develop a prototype for a new product. She has chosen three people to work with her. Ben and Tom are good friends and socialize on the weekend. They are both very creative. Julian is older than Ben and Tom, but they have worked together before and been quite productive. Julian is organized. Ayesha has never worked with any of the men, but knows the product well. She brings the highest level of expertise. Which of the following statements best describes Ayesha’s group?

 

Low norms, high cohesiveness, low productivity

High norms, high cohesiveness, high productivity

High norms, low cohesiveness, high productivity

Low norms, low cohesiveness, low productivity

 

26 Phil loves sales. He has been a stellar sales person since he was 12. Recently he was awarded a full paid trip for two to Puerto Rico for breaking a company sales record. Phil is so motivated to work; he has set a new goal to break his old record in the coming year. Taking into account self-determination theory, why did the company recognition and award, an extrinsic reward, motivate Phil?

 

The reward increased Phil’s sense of competence by providing feedback that improved his intrinsic motivation.

 

The reward was imposed to work toward a standard that Phil could not believe in, and his intrinsic motivation suffered.

 

The reward increased Phil’s sense of competence by providing feedback that diminished his intrinsic motivation.

The reward was seen as a coercive method of increasing sales and motivated Phil to prove himself intrinsically

 

27 Glendon has a degree in business and worked for 2 years at an international firm in Spain. When the firm suffered cutbacks and Glendon returned home, he took a job at a nonprofit agency mentoring at-risk Spanish-speaking children. Glendon earns a third of what he earned in the business world, but has decided that his new goal is to acquire a larger case load and continue to use his Spanish to help people. Which theory explains why Glendon is happy with a much smaller external reward for his work?

 

Self-concordance

Self-imposition of goals

Extrinsic motivation

 

28  Irma does not like a few of the standard operating procedures adapted for the new project. However, she discussed the items with the team and told them that she realized she was in the minority and that she would adapt the new procedures to maintain smooth operations within the team. What is this type of intention called?

 

Sacrificing

Collaborating

Compromising

Accommodating

 

29 For process conflict to be productive, it must be

 

Kept high

Kept low

Kept at moderate levels

Kept at low to moderate levels

 

30 The right inherent in a managerial position to give orders and expect orders to be obeyed is termed

 

authority

unity of command

power

chain of command

 

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Week 1 EVT

Q1. Is a short position of a call option (= writing a call) equivalent to a long position of a put option (=buying a put)? Please explain.

Q2. Explain the similarities and the differences between a forward contract and a futures contract.

Chapter 2
Q3. A company enters into a long futures contract to buy 4,000 bushels of wheat for $2.00 per bushel. The initial margin is $3,000 and the maintenance margin is $2,000.
a. If futures price becomes $2.10 per bushel, calculate the cumulative gain.
b. What futures price change will trigger a margin call?

Chapter 3
Q4. A fund manager has a portfolio worth $20 million with a beta of 1.3. The manager is concerned about the performance of the market over the next two months and plans to use three month futures contracts on the S&P 500 to hedge the risk. The current index level is 2,000 and one futures contract is on 250 times the index (i.e., the index multiplier is 250). The risk free rate is 3.0% per annum and the dividend yield on the index is 2.0% per annum. The current three month futures price is $2,100.
a. What position should the fund manager take to hedge exposure to the market over the next two months? In other words, how many futures contracts does the manager have to buy or sell? Specify whether it’s a long (=buy) or short (=sell) position.
b. Calculate the effect of your strategy on the fund manager’s returns if the index in two months is 1900, 2000, 2100, 2200 and 2300. Assume in 2 months, the one month futures price will be 0.25% higher than the index level. For example, if the index becomes 2000 two months from now, the index futures price will be 1.0025*2000 = 2005.00.
c. Are the total values (hedged values = stock portfolio plus futures position) always greater than the stock (=unhedged) values, no matter what the index becomes in 2 months? If not, does it mean the hedge was unsuccessful? Explain.
Hint: To answer part b, replicate closely the textbook example in pages 6567. or review week 1 template as we will be discussing a very similar example. In other words, you need to create a spreadsheet similar to Table 3.4.

Get Answer;  http://homework.ecrater.com/p/20262872/hw-1256-week-1-evt 

FNC330 Summer 2014 with working in excel

1)A furniture store has a sofa on sale for $399.00, with the payment due one year from today. The store is willing to discount the price at an annual rate of 9% if you pay today. What is the amount if you pay today.
2) Dividend growth rate is important to many investors. You are considering investing in a firm after looking at the firm’s dividends over a seven-year period. At the end of the year 2002, the firm paid a dividend of $1.35. At year-end 2009, it paid a dividend of $1.84. What was the average annual growth rate of dividends for this firm?
3) In 1930, the highest paid player in major league baseball was Babe Ruth of the New York Yankees, with an annual salary of $80,000. In 2000, the highest paid player in major league baseball player was Alex Rodriguez, also of the New York Yankees, with a salary of $25,000,000. What was the average annual rate of growth in the  top baseball salary over this time period?
4) Your employer has agreed to place year-end deposits of $1,000, $2,000 and $3,000 into your retirement  account. The $1,000 deposit will be one year from today, the $2,000 deposit two years from today, and the $3,000 deposit three years from today. If your account earns 7% per year, how much money will you have in the account at the end of year three when the last deposit is made?
5) The furniture store offers you no-money-down on a new set of living room furniture. Further, you may pay for the furniture in three equal annual end-of-the-year payments of $1,100 each with the first payment to be made one year from today. If the discount rate is 6%, what is the present value of the furniture payments?
6) Your department at work places $10,000 every year-end into an account earning 5%. The money is used when the corporate office fails to fully finance your profitable projects. The money has not been touched since a first deposit was made exactly six years ago. If the most recent deposit was made today, how much money is currently in the account?
7) If you borrow $50,000 at an annual interest rate of 12% for ten years, what is the annual payment (prior to maturity) on a fully amortized loan?
8) The Cougar Corporation has issued 20-year semi-annual coupon bonds with a face value of $1,000. If the annual coupon rate is 10% and the current yield to maturity is 14%, what is the firm’s current price per bond?
9) Your parents have an investment portfolio of $400,000, and they wish to take out cash flows of $50,000 per year as an ordinary annuity. How long will their portfolio last if the portfolio is invested at an annual rate of 4.90%? Use a calculator to determine your answer.
10) Johnson Construction Inc. has issued 20-year $1,000 face value, 17% annual coupon bonds, with a yield to maturity of 11%. The current price of the bond is
11) Suppose you invest $1,000 today, compounded quarterly, with the annual interest rate of 5.50%. What is your investment worth in one year?
12) Your firm intends to finance the purchase of a new construction crane. The cost is $1,500,000. What is the size of the annual ordinary annuity payment if the loan is amortized over a six-year period at a rate of 8.50%?
13) The next dividend (Div1) is $1.80, the growth rate (g) is 9%, and the required rate of return (r) is 12%.  What is the stock price, according to the constant growth dividend model?
14) You want to invest in a stock that pays $5.00 annual cash dividends for the next four years. At the end of the six years, you will sell the stock for $20.00. If you want to earn 12% on this investment, what is a fair price for this stock if you buy it today?
15) Johnson has an annuity due that pays $600 per year for 15 years. What is the present value of the cash flows if they are discounted at an annual rate of 9.50%?
16) Rogue Racing Inc. has $1,000 par value bonds with a coupon rate of 8% per year making semiannual coupon payments. If there are twelve years remaining prior to maturity and these bonds are selling for $896.40, what is the yield to maturity for these bonds?
17) Joe bought a share of stock for $47.50 that paid a dividend of $.92 and sold one year later for $51.38. What was Joe’s dollar profit or loss and holding period return?
18) Consider the following ten-year project. The initial after-tax outlay or after-tax cost is $1,000,000. The future after-tax cash inflows each year for years 1 through 10 are $400,000 per year. What is the payback period without discounting cash flows?
19) Assume the following information about the market and JumpMasters’ stock. JumpMasters’ beta = 1.50, the risk-free rate is 3.50%, the market return is 10.0%. Using the SML, what is the expected return for JumpMasters’ stock?
20) Kip owns the following portfolio of securities. What is the beta for the portfolio?
21) Your investment banking firm has estimated what your new issue of bonds is likely to sell for under several different economic conditions. What is the expected (average) selling price of each bond?
22) Willie’s Western Corp. has outstanding nonconvertible preferred stock (cumulative) that pays a quarterly  dividend of $1.65. If your required rate of return is 9.5%, what should you be willing to pay for 1000 shares of Willie’s Western?
23) Lincoln Industries Inc. is considering a project that has an initial after-tax outlay or after-tax cost of  $350,000. The respective future cash inflows from its five-year project for years 1 through 5 are $85,000 each year. Lincoln expects an additional cash flow of $50,000 in the fifth year. The firm uses the net present value method and has a discount rate of 10%. Will Lincoln accept the project?
24) In a stream of past dividends, the initial dividend is $1.25 and the most recent dividend is $1.80. The  number of years between these two dividends (n) is 9 years. What is the average growth rate during this seven-year period? Use a calculator to determine your answer.
25) Bacon Signs Inc., purchases a machine for $70,000. This machine qualifies as a five-year recovery asset  under MACRS with the fixed depreciation percentages as follows: year 1 = 20.00%; year 2 = 32.00%; year 3 = 19.20%; year 4 = 11.52%, etc. The firm has a tax rate of 34%. If the machine is sold at the end of two years for $50,000, what is the cash flow from disposal?
26) Mulligan, Inc. is currently considering an eight-year project that has an initial outlay or cost of $140,000. The cash inflows from its project for years 1 through 8 are the same at $35,000. Mulligan has a discount rate of 13%. Because there is a shortage of funds to finance all good projects, Mulligan wants to compute the profitability index (PI) for each project. That way Mulligan can get an idea as to which project might be a better choice. What is the PI for Mulligan’s current project?
27) Find the Modified Internal Rate of Return (MIRR) for the following series of future cash flows, given a discount rate of 11%: Year 0: -$22,000; Year 1: $5,000; Year 2: $6,000; Year 3: $9,000; Year 4: $7,500; and, Year 5: $8,000.
28) Rogers’ Rotors has debt with a market value of $250,000, preferred stock with a market value of $50,000, and common stock with a market value of $750,000. If debt has before-tax cost of 7%, preferred stock a cost of 9%, common stock a cost of 11%, and the firm has a tax rate of 34%, what is the WACC? 28)
29) Geronimo, Inc. is considering a project that has an initial outlay or cost of $220,000. The respective future cash inflows from its four-year project for years 1 through 4 are: $50,000, $60,000, $80,000, and $90,000, respectively. Geronimo uses the internal rate of return method to evaluate projects. Will Geronimo accept the project if its hurdle rate is 10%?
30) The initial outlay or cost for a four-year project is $1,000,000. The respective cash inflows for years 1, 2, 3 and 4 are: $500,000, $200,000, $300,000, $300,000. What is the discounted payback period if the discount rate is 10%?
31) Your firm has just issued a 20-year $1,000.00 par value, 10% annual coupon bond for a net price of $984.00. Floatation costs are $15 per bond sold. Tax rate is 30%. What is the after-tax cost of debt? Use a financial calculator to determine your answer.
32) You plan to place a $40,000 down payment on a lake cabin in Northern Minnesota in ten years. If you invest in a long-term CD earning an annual rate of 5.50%, how much would you need to invest today to have enough for the down payment in ten years?
33) Orange Electronics Inc. has a profitability ratio of 0.14, an asset turnover ratio of 1.9, a debt to equity ratio of 0.60 and a total asset to equity ratio of 1.60. What is the firm’s ROE?
34) EBIT is $10,000 and interest expense is $3,000. If the tax rate is 30%, what is the net income?
35) Perfect Purchase Electronics
Selected Income Statement Items, 2009
Cash Sales $1,500,000
Credit Sales $8,500,000
Total Sales $10,000,000
COGS $6,000,000
 Using the information provided, what is the collection cycle for the firm?
36) Explain why is financial leverage so important?
 37) The chart below gives information for four classes of U.S. securities over the 10-year time period from 1900 – 1999. Order the securities from highest average annual return to lowest for this time period. Now rank the securities from highest to lowest based on risk. Is the information consistent with what financial theory tells us? Why or why not?
38) Assume that today’s date is August 15, 2010 and that the Rite Aid Bond is an annual-coupon bond. Describe what each of the following terms mean and how each value was determined if appropriate. Par value of the bond is $5,000.
 In your answer you should also answer the following questions:
a) Calculate the price of the bond in $$?
b) Calculate annual coupon interest payments.
c) Calculate yield to maturity of the bond.
d) Calculate current yield on the bond.
39) Define authorized shares, issued shares, treasury shares, and outstanding shares. Is a company limited in treasury shares that it may own? Briefly explain.
40) Describe callable bonds. In your description, be sure to include in which situation the company will call the bond back?
Or

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