Which of the following is not an appropriate measure of quality?

• A.Market share.
• B.Delivery performance.
• C.Customer satisfaction.
• D.Raw materials costs.

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Which of the following is a computer program that appears to be legitimate but performs some illicit activity when it is run?

• A.Hoax virus.
• B.Web crawler.
• C.Trojan horse.
• D.Killer application.

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Which of the following scenarios indicates an effective use of financial leverage?

• A.An organization has a current ratio of 2 and an inventory turnover of 12.
• B.An organisation has a rate of return on equity of 20% and a rate of return on assets of 15%.
• C.An organization has a debt to total assets ratio of 0.2 and an interest coverage ratio of 10.
• D.An organization has a profit margin of 30% and an assets turnover of 7%.

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Based on a comparison of RST's quick ratios in Year 5 and Year 6, what is a likely conclusion?

• A.RST has improved its management of long-term investments in Year 6.
• B.RST has written off obsolete inventory in Year 6.
• C.RST's ability to meet short-term financing needs has declined since Year 5.
• D.RST's ability to meet short-term financing needs has improved since Year 5.

Correct Answer: C

RST's quick ratio decreased from 2.5 in Year 5 [(US $4,000 cash + $2,000 financial assets held for trading + $14,000 net AIR] + $8,000] to 2.0 in Year 6 [(US $5,000 + $3,000 + $16,000) $12,000]. RST has fewer assets that are easily convertible to cash available to meet current liabilities. Thus, its ability to meet short-term financing needs has declined. RST Corporation's Income Statement for Year 5 and Year 6

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A company stocks, maintains, and distributes inventory. The company decides to add to the safety stock and expedite delivery for several product lines on a trial basis. For the selected product lines, the company will experience:

• A.An increase in some costs but no change in the service level.
• B.A change in the service level.
• C.An increase in ordering, carrying, and delivery costs.
• D.A decrease in ordering, carrying, and delivery costs.

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