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SPMA 2P27 Sport Finance Midterm questions well answered already passed
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SPMA 2P27 Sport Finance Midterm questions well answered already passed
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SPMA 2P27 Sport Finance MidtermOperational budget - correct answer ✔✔A short-term financial plan used to coordinate what is needed
to achieve the short-term goals of the company.
Capital Budget - correct answer ✔✔budget for major capital, or investment, expenditures
Variable costs - correct answer ✔✔the numbers of products that may be sold/consumed by buyers (e.g.,
cost of materials)
If majority of expenses are variable costs, reducing cost per unit improves profitability
If majority of expenses are fixed costs, maximizing sales improves profitability
Fixed costs - correct answer ✔✔Costs that do not vary with the quantity of output produced (e.g.
salaries, machinery)
If majority of expenses are variable costs, reducing cost per unit improves profitability
If majority of expenses are fixed costs, maximizing sales improves profitability
Incrimental Budgeting - correct answer ✔✔Increasing budget based on expected changes
Decrement Budgeting - correct answer ✔✔Reducing an existing budget based on expected lower
revenues to avoid a loss
Break-even analysis - correct answer ✔✔a method of determining what sales volume must be reached
before total revenue equals total costs (when earnings before deductions are 0)
, EBIT - correct answer ✔✔Earnings Before Interest and Taxes
Steps in Planning Process - correct answer ✔✔1. Gathering Information
2. Forecasting sales
3. Projecting profits and losses
4. Comparing to Industry norms
5. Determining Capital Needs
Exchange Theory - correct answer ✔✔theory that holds that people are motivated by self-interests in
their interactions with other people (give something to get something)
Economic perspective - correct answer ✔✔If benefits exceed costs, people are more likely to make a
decision becasue they feel they are being treated equitably
Equilibrium point - correct answer ✔✔Where quantity demanded = quantity supplied (price at which
consumers and producers agree)
Fan Cost Index - correct answer ✔✔a reflection of how much it costs a family to attend a professional
sporting event (4 tickets, 4 concessions, 2 souvenirs, 1 parking pass)
Pricing Strategies - correct answer ✔✔1. Expected price threshold (setting price just below expected
threshold like $0.99)
2. Anchoring (Show full price beside discounted price to set reference)
3. Consuner Willingness to Pay (WTP) (Absolute highest price a consumer will pay)
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