1. The proportion of fixed operating costs to variable costs is called:

   	a.	Leverage
   	b.	Operating Leverage
   	c.	Positive Leverage
   	d.	Financial Leverage
   	e.	None of the above

If a company has Return on Sales of 10% and a Sales to Assets ratio of 2.0, then the companys Return on Assets is:

	a.	Can't be calculated without knowing the Return on Equity ratio.
	b.	20%
	c.	Can't be caculated
	d.	10%
	e.	5%

The market value of a publicly traded company (e.g. NYSE or Nasdaq) can be calculated by its market capitalization. More generally, company valuation can be determined by estimating the net present value of all future cash flows. For companies that are already profitable, which of the following tends to have the biggest impact on company valuation/market value?

	a.	Reductions in the level of assets used in the company
	b.	Indications that future cash flows will grow
	c.	Improvements in gross margin results
	d.	Improvements in profitability

1. The process of disaggregating industries into specific markets (to get a clearer understanding of profitability and key success factors) is known as:

   	a.	Market commonality
   	b.	Porter's Five Forces
   	c.	Demand attributes
   	d.	Market segmentation

A model of firm performance that focuses on the resources and capabilities controlled by a firm as sources of competitive advantage, is the definition of:

	a.	Game Theory
	b.	Market Segmentation
	c.	Porter's Five Forces
	d.	DuPont Formula
	e.	Resource-based Theory

The focused cost leadership strategy differs from the cost leadership strategy in that

	a.	the focused cost leaders have a narrower range of economic efficiencies.
	b.	the value-creating activities of focused cost leaders are more constrained.
	c.	there are fewer risks with the focused cost leadership strategy.
	d.	focused cost leaders target a narrower customer market.

In order to establish competitive advantage with resources and capabilities, an organization needs to ensure that its capabilities meet the following criteria:

	a.	Versatile, Replicable, Inimitable, Organized
	b.	Causally ambiguous, Socially Complex, Path Dependent
	c.	Scarce, Relevant, Durable, Replicable, Appropriable
	d.	Part of the primary value chain or the functional value chain
	e.	Valuable, Rare, Costly to Imitate, Non-Substitutable

If an organization has a competitive advantage over its competitors with its existing resources and capabilities, what does it need to do to sustain that advantage:

	a.	Conduct a value chain analysis of their capabilities
	b.	Exploit competitor weaknesses
	c.	Create causal ambiguity
	d.	Analyze the relative strengths and weaknesses of their capabilities
	e.	Create one or more isolating mechanisms

1. If I am trying to analyze which of a companys resources and capabilities and driving their competitive advantage, which analytical technique should I use?

   	a.	Porters Diamond Framework
   	b.	Porters 5 Forces Analysis
   	c.	VRIN Analysis
   	d.	Financial Strategic Analysis
   	e.	Any kind of Competitive Analysis

1. McKinsey has developed a strategic decision-making model that includes 7 steps: Frame the situation; Diagnose business profitability; Forecast futures; Search for alternatives; Choose a strategy; Commit to tangible proximate goals; and, Evolve through change and learning. This is an applied example of what type of decision-making model?

   	a.	Creative Decision Model
   	b.	Intuitive Decision Model
   	c.	Bayesian Decision Model
   	d.	Rational Decision Model