Business Strategy - Capsim test 1 Questions and Solutions
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Module
CAPSIM
Institution
CAPSIM
Business Strategy - Capsim test 1 Questions and Solutions
1. EBIT is a financial acronym for what?
Earnings Before Interest & Taxes
What is the current top marginal corporate tax rate in the U.S. for large, C- corporations:
21%
How do you compute market capitalization (its stock ma...
what is the current top marginal corporate tax rat
how do you compute market capitalization its stoc
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Business Strategy - Capsim test 1
Questions and Solutions
1. EBIT is a financial acronym for what? - answer Earnings Before Interest & Taxes
What is the current top marginal corporate tax rate in the U.S. for large, C- corporations:
- answer 21%
How do you compute market capitalization (its stock market valuation) for a
corporation? - answer Current Stock Price X Number of Outstanding Shares of Stock
How do you compute stockholders' equity? - answer Assets - Liabilities
How do you compute the book value of a share of stock? - answer Shareholders'
Equity ÷ Number of Outstanding Shares of Stock
Name the five product segments of sensors that your Capsim team makes (5 points): -
answer Traditional, Low End, High End, Performance, Size
What is meant by Leverage? - answer The amount of debt incurred by a company,
whether short term (current debt with maturity of 12 montsh) or long term (bonds with,
for example, maturities of 10 years)
In Capsim, you can borrow long-term debt (bonds)? What is the length or term of these
bonds? - answer 10 years
In Capsim, you can borrow short-term or current debt? What is the length or term of
short-term or current debt? - answer 1 year
Which type of borrowing will carry the higher interest rate and why? Long-term debt or
short term (current) debt? (2 points) - answer Long-term debt because it is much
harder for a lender to predict economic and market conditions 10 years out
In Capsim, an emergency loan will be imposed on your team if you run out of cash.
What is the financial penalty for incurring an emergency loan? - answer 1. 7.5% of
the amount necessary to be borrowed
In Capsim, the customer/industry demands for its your products will drift which direction
on the perceptual map over time? And Why? (2 points) - answer Down and to the
right, or southeast on the perceptual map, because over time customers will want
sensors that are smaller and higher performing with longer life spans or months to go
before failure (MTBF)
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