Capital Management

Working Capital Management

 

Unit outcomes addressed in this Assignment:

·      Analyze working capital management in a healthcare organization.

·      Describe the tools that an organization manager can use to manage the revenue cycle.

 

Course outcome addressed in this Assignment:

 

Describe the overall planning process and the key components of the financial plan.

Instructions

Solve the following financial problems from your textbook, and submit the answers, including your work, in a Word or Excel document:

Problem 16.5 from page 602, Chapter 16 (Gapenski, 2012)

 

Defense Electronics

How long does it take $1,000 to quadruple in value if you have an 11% annual return? Assume annual compounding, and express your answer in years (to two decimals)
2) Assume the following spot and forward rates for the euro ($/euro).
Spot rate: $1.6277
30 day forward rate: $1.6330
90 day forward rate: $1.6353
120 day forward rate: $1.6387
A) What is the dollar value of one euro in the spot market?
B) Suppose you issued a 120-day forward contract to exchange 200,000 euros into Canadian dollars. How many dollars are involved?
C) How many euros can you get for one dollar in the spot market?
D) What is the 120-day forward premium?
3) The MacHardee Plumbing Company has common stock outstanding. The stock paid a dividend of $2.00 per share last year, but the company expects that earnings and dividends will grow by 25% for the next two years before dropping to a constant 9% growth rate afterward. The required rate of return on similar common stocks is 13%.

What is the per-share value of the company’s common stock?

4) Defense Electronics Corporation is considering building an overseas manufacturing facility to produce radar detection systems. As a consultant to DEC, you have the contract to determine the appropriate discount rate for evaluating this project.
Current information regarding DEC includes:
Debt: 25,000 bonds outstanding, each with a coupon rate of 6.5% paid semi-annually, par value of $1,000, maturity of 20 years, and current value of 96% of par.
Common Stock: 400,000 shares outstanding with a current value of $89/share. An annual dividend of $4.74 has just been paid, and dividends are expected to grow by 9% annually into the foreseeable future.
Preferred Stock: 35,000 shares of 6.5% stock with a par value of $100/share, and a current value of $99/share.
Tax rate: DEC’s combined tax rate is 34%.
Other liabilities: DEC has the usual accounts payable and accruals on its balance sheet, but does not regularly utilize any interest-bearing debt other than the bonds described above.
Risk Adjustment: Since the new manufacturing facility is to be built overseas, management is suggesting an adjustment factor of +2% to account for the increased riskiness.
Showing your work, recommend an appropriate discount rate for DEC’s proposed venture. You must show your work to receive any credit.

the slope of a regression line

1. Beta is estimated as the slope of a regression line fit to pairs of periodic returns, (rx, ry), where: (Points : 1)

rx is the return for a market index such as the S&P 500 Index. rx is the return for the stock being analyzed—for example, IBM’s return if we are estimating IBM’s beta. the slope measures the average return for the market portfolio for each percentage change in the value of the security of interest. ry is the return for the market index such as the S&P 500 Index.

Question 2. 2. Weights used in calculating the WACC should: (Points : 1)

sum to 1.00. always include Wd. be based on the book value of each source of financing. be calculated according to the price of each security—so if the price of a bond is $1,000, and the price of common stock is $50, then the weight of debt would be .20.

Question 3. 3. Which of the following statements regarding the cost of preferred stock is true? (Points : 1)

It is typically found by solving for an annuity’s discount rate. It is typically found by solving for an annuity due’s discount rate. It is found similarly to a perpetuity’s discount rate but with irregular spacing of the dividends. It is typically found by solving for a perpetuity’s discount rate.

Question 4. 4. In the Capital Asset Pricing Model, the market risk premium is best approximated by: (Points : 1)

the most recent one-year return on the S&P 500 Index (or another market index). the long-term historic return on a stock market index such as the S&P 500 (or another market index). the long-term average spread of the S&P 500 (or another market index) over the yield of long-term government bonds. the return of the S&P 500 (or another market index) over the current yield of long-term government bonds.

Question 5. 5. In the Capital Asset Pricing Model, the risk-free rate: (Points : 1)

links the CAPM to current market conditions. is the historic long-term average rate of government bonds. can be approximated by using yields on high-rated corporate bonds. is always the current yield on 30-year US government Treasury bonds.

Question 6. 6. Total risk is measured by: (Points : 1)

the standard deviation of returns. the firm’s beta. Moody’s, Standard & Poor’s, and Fitch ratings. the variability of EBIT.

Question 7. 7. The Hamada Equation allows the firm to: (Points : 1)

solve for a company’s total risk. adjust the beta of a pure-play firm for its use of debt financing. estimate its asset beta. Both b and c are correct.

Question 8. 8. Using the Capital Asset Pricing Model, estimate the required rate of return for Caterpillar Incorporated stock if the company’s beta is 1.87 (as of February 1, 2013). Use a risk-free rate of 3% and a market risk premium of 6%. (Points : 1)

8.61% 11.22% 14.22% 16.83%

Question 9. 9. The financing mix reflected in the WACC should: (Points : 1)

reflect the desired mix and not necessarily the mix being used to finance a specific project. vary from project to project, depending on how they are financed. always reflect the firm’s current capital structure. None of these answers is correct.

Question 10. 10. Chapter 9 discusses three different types of returns. Identify the item in the list below that is NOT one of those three types of returns. (Points : 1)

the actual rate of return the expected rate of return the risk-free rate of return the required rate of return

0

15

0

663841601

MultipleChoice

25

663841593

MultipleChoice

9

0

663841594

MultipleChoice

17

0

663841595

MultipleChoice

19

0

663841596

MultipleChoice

12

0

663841597

MultipleChoice

11

0

663841598

MultipleChoice

7

0

663841599

MultipleChoice

27

0

663841600

MultipleChoice

Garza and Neely, CPAs, are preparing their service revenue (sales) budget for the coming year (2012). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Department    Quarter 1    Quarter 2    Quarter 3    Quarter 4
Auditing        2.420    1.920    2.150        2.500
Tax        3.130    2.620    2.200        2.600
Consulting        1.740    1.740    1.740        1.740

Average hourly billing rates are: auditing $84, tax $93, and consulting $104.

Prepare the service revenue (sales) budget for 2012 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

Stanton Company is planning to produce 1,300 units of product in 2012. Each unit requires 3.50 pounds of materials at $5.00 per pound and a half-hour of labor at $13.60 per hour. The overhead rate is 90% of direct labor.

(a) Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead.
(b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)
In Harley Company it costs $28 per unit ($18 variable and $10 fixed) to make a product that normally sells for $52. A foreign wholesaler offers to buy 4,770 units at $26 each. Harley will incur special shipping costs of $1 per unit. Assuming that Harley has excess operating capacity.

Indicate the net income (loss) Harley would realize by accepting the special order. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Reject Order        Accept Order        Net Income
Increase
(Decrease)

Vintech Manufacturing incurs unit costs of $7 ($4 variable and $3 fixed) in making a subassembly part for its finished product. A supplier offers to make 11,100 of the part at $6.30 per unit. If the offer is accepted, Vintech will save all variable costs but no fixed costs.

Prepare an analysis showing the total cost saving, if any, Vintech will realize by buying the part. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Make        Buy        Net Income
Increase
(Decrease)

Ridley Company has a factory machine with a book value of $89,100 and a remaining useful life of 4 years. A new machine is available at a cost of $201,000. This machine will have a 4-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $617,100 to $429,300.

Prepare an analysis showing whether the old machine should be retained or replaced. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)

Retain
Equipment         Replace
Equipment         Income
Increase
(Decrease)

incorporate all responses

1.              Suppose the weighted average cost of capital of the Gadget Company is 10%. If Gadget has a capital structure of 50% debt and 50% equity, a before-tax cost of debt of 5%, and a marginal tax rate of 20%, then its cost of equity capital is

The below problem relates to question 2, 3, 4 and 5 below. You can incorporate all responses on one Excel spreadsheet

Barbara Andrade is an equity analyst who covers the entertainment industry for Greengable Capital Partners, a major global asset manager. Greengable owns a significant position with a large unrealized capital gain in Mosely Broadcast Group (MBG). On a recent conference call, MBG’s management states that they plan to increase the proportion of debt in the company’s capital structure. Andrade is concerned that any changes in MBG’s capital structure will negatively affect the value of Greengable’s investment. To evaluate the potential impact of such a capital structure change on Greengable’s investment, she gathers the information about MBG given in Exhibit A.

 

EXHIBIT A Current Selected Financial Information for MBG

Yield to maturity on debt 8.00%
Market value of debt $100 million
Number of shares of common stock 10 million
Number of shares of common stock $30
Cost of capital if all equity-financed 10.3%
Marginal tax rate 35%
   

 

Andrade expects that an increase in MBG’s financial leverage will increase its costs of debt and equity. Based on an examination of similar companies in MBG’s industry, Andrade estimates MBG’s cost of debt and cost of equity at various debt-to-total capital ratios, as shown in Exhibit B.

 

EXHIBIT B Estimates of MBG’s Before-Tax Costs of Debt and Equity

 

Debt-to-Total Capital Ratio Cost of Debt Cost of Equity
20% 7.7% 12.5%
30% 8.4% 13.0%
40% 9.3% 14.0%
50% 10.4% 16.0%

 

 

2.              MBG is best described as currently: A. 25% debt financed and 75% equity financed. or B. 33% debt financed and 66% equity financed. or C. 75% debt financed and 25% equity financed.

 

3.              Based on Exhibits A and B, the current after-tax cost of debt for MBG is:

 

Current after-tax cost of debt = 5.2%

 

 

4.                Based on Exhibits A and B, MBG’s current cost of equity capital is:

Current Cost of Equity Capital = 10.3%

 

5.              Based on Exhibits A and B, what debt-to-total capital ratio would minimize MBG’s weighted average cost of capital? A. 20% or. B. 30%. or C. 40%.

Calculating Returns and Variability

Assignment 5 Text edition 7: Chapter 12 – Questions and Problems – 5, 7, 8, 9, 12, 13. Rubric Assignment 5: Calculation Questions. Show your work – include formulas and step by step calculations. 5. Nominal versus Real Returns: What is the average annual return on Canadian stock from 1957 through 2008: a. In nominal terms? b. In real terms? 7. Calculating Returns and Variability: Using the following returns, calculate the arithmetic average returns, the variances and the standard deviations for X and Y. Returns Year X Y 1 6% 18% 2 24 39 3 13 -6 4 -14 -20 5 15 47 8.

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Assignment 5 Text edition 7: Chapter 12 – Questions and Problems – 5, 7, 8, 9, 12, 13. Rubric Assignment 5: Calculation Questions. Show your work – include formulas and step by step calculations. 5. Nominal versus Real Returns: What is the average annual return on Canadian stock from 1957 through 2008: a. In nominal terms? b. In real terms? 7. Calculating Returns and Variability: Using the following returns, calculate the arithmetic average returns, the variances and the standard deviations for X and Y. Returns Year X Y 1 6% 18% 2 24 39 3 13 -6 4 -14 -20 5 15 47 8. Risk Premiums: Refer to the table attached and look at the period from 1970-1975. a. Calculate the arithmetic average returns for large-company stocks and T-Bills over this period. b. Calculate the standard deviation of the returns for large-company stocks and T-Bills over this period. c. Calculate the observed risk premium in each year for the large-company stocks versus T-Bills. What was the average risk premium over this period? What was the standard deviation of the risk premium over this period? d. Is it possible for the risk premium to be negative before an investment is undertaken? Can the risk premium be negative after the fact? 9. Calculating Returns and Variability: You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past 5 years: 2 percent, -8 percent, 24percent, 19 percent and 12 percent. a. What was the arithmetic average return on Crash-n-Burn’s stock over this 5-year period? b. What was the variance of Crash-n-Burn’s returns for this period? The standard deviation? 12. Effects of Inflation: Look at table 12.1 (same table from Q8) and the attached figure (12.4), When were T-bill rates at their highest over the period of 1957 through 2008? Why do you think they were so high during this period? What relationship underlies your answer? 13. Calculating Investment Returns: You bought one of Great White Shark Repellant Co’s 7 percent…

resolve the situations

Assignment 2: LASA 1—The Time Value of Money

By Wednesday, October 15, 2014 submit a 4-5 page report based on the following problem:

Mary has been working for a university for almost 25 years and is now approaching retirement. She wants to address several financial issues before her retirement and has asked you to help her resolve the situations below. Her assignment to you is to provide a 4-5 page report, addressing each of the following issues separately. You are to show all your calculations and provide a detailed explanation for each issue.

Issue A:
For the last 19 years, Mary has been depositing $500 in her savings account , which has earned 5% per year, compounded annually and is expected to continue paying that amount. Mary will make one more $500 deposit one year from today. If Mary closes the account right after she makes the last deposit, how much will this account be worth at that time?

Issue B:
Mary has been working at the university for 25 years, with an excellent record of service. As a result, the board wants to reward her with a bonus to her retirement package. They are offering her $75,000 a year for 20 years, starting one year from her retirement date and each year for 19 years after that date. Mary would prefer a one-time payment the day after she retires. What would this amount be if the appropriate interest rate is 7%?

Issue C:
Mary’s replacement is unexpectedly hired away by another school, and Mary is asked to stay in her position for another three years. The board assumes the bonus should stay the same, but Mary knows the present value of her bonus will change. What would be the present value of her deferred annuity?

Issue D:
Mary wants to help pay for her granddaughter Beth’s education. She has decided to pay for half of the tuition costs at State University, which are now $11,000 per year. Tuition is expected to increase at a rate of 7% per year into the foreseeable future. Beth just had her 12th birthday. Beth plans to start college on her 18th birthday and finish in four years. Mary will make a deposit today and continue making deposits each year until Beth starts college. The account will earn 4% interest, compounded annually. How much must Mary’s deposits be each year in order to pay half of Beth’s tuition at the beginning of each school each year?

Turn in your completed work to the M3: Assignment 2 Dropbox by Wednesday, October 15, 2014.

Assignment 2 Grading Criteria
Maximum Points
Calculated the compounded interest over 20 years and evaluated the value of the savings account upon closing. (CO 1)
32
Calculated the bonus payout over 20 years vs. a one time payout with interest and distinguished which bonus option would be better for the client. (CO 1)
32
Calculated the present value of the bonus and analyzed the difference in bonus for the client. (CO 2)
32
Analyzed the tuition costs for the client and determined what the future costs will be and determined how these funds can be accumulated over time. (CO 4)
60
Written Components: Organization, usage and mechanics, APA elements, style
44
Total:
200

jurisdiction and the State and Local governments

Today’s urban transportation planning process is being impacted by the President’s Stimulus Plan. High speed rail is one such option to congestion along the highways of urban areas. These projects have two sides to them. There are those who support high speed rail and those who do not support high speed rail. You have been chosen to not support the Stimulus Plan for use of high speed rail to ease congestion. Your task is to help decision makers make up their minds. So, you are now on the opposing side. Discuss how this Stimulus Plan for high speed rail will not work. You can use any reference. But, you must also present your opinion based on facts and data, not just because you don’t like it. You will have to provide evidence to back up what you believe is a bad idea. (25 points)

Most (97 percent) roads and streets in the United States are under the jurisdiction of State and local governments. The Federal jurisdiction is mainly limited to National Parks, National Forests, and other government-owned land. Discuss what issues and problems might be common between the Federal jurisdiction and the State and Local governments, and what issues and problems might be unique to the Federal government compared to the State and local governments. List the common and unique attributes and provide a brief explanation to support your choice. Use references in APA format and also offer your own opinion on what you think of these issues and problems. (25 points)The North American Free Trade Agreement (NAFTA) went into effect on January 1, 1994. This sweeping agreement is designed to open the borders separating Canada, Mexico, and the United States to the free exchange of goods and services. There are many pros and cons of NAFTA that have emerged since 1994. The future of NAFTA is in the wind these days. It may fail or succeed for the next ten years. You job is to help Congress and other decision makers to decide what course of action they should take regarding NAFTA’s future. You are to take the side that NAFTA is a bad business investment; you are to represent the “con” side of the argument. So, discuss why you would defeat or destroy NAFTA or morph it from its current state to some other new state. (25 points)In early 1990s with a second wave of low-cost carriers (LCCs), which led to the second period of strong traffic growth from early 1993 through early 2000, Southwest Airlines arguably provided the blueprint for U.S. Between 2006 and 2009 a fuel crisis happened and a recession for business and the transportation industry. What is the impact today on LCC’s in order to be competitive in this economy coming on the heels of this recession?

recognizing the strengths

Question 1

Identifying weaknesses, while recognizing the strengths is not needed in critical thinking, but only in SWOT Analysis.

Answer

True

False

.0.2 points

Question 2

Wages and Working Conditions are excluded from the ethical issues of concern in international business.

Answer

True

False

.0.2 points

Question 3

Which of the following is correct about ethical management?

Answer

a. Decision making leads to orientation, discussion, and implementation

b. Ethical decision making leads to orientation, discussion, and implementation

c. Ethical management has a handsome long-term reward

d. Ethical orientation leads to discussion, decision Making, and implementation

e. Ethical implementation leads to discussion, orientation, and ethical Decision Making

.0.2 points

Question 4

Critical thinking is a normal mode of thinking.Answer True

False

.0.2 points

Question 5

Which of the following is not in the logical order of progression in an

Ethical Process Dialogue:Answer a. Modify Proposals

b. Value Differences

c. Uncover Assumptions

d. Evaluate Alternative Views

e. None of the above

.0.2 points

Question 6

Which of the following statement is incorrect?

Answer a. Ethical issues could be used as justification of the Market System

b. Ethics, economics, and the law are not related in business

c. Ethics could be viewed as a part of the conditions for free markets

d. Ethics, economics, and the Law are related in business

e. Ethical right or wrong could be justified by economics and could be legal or illegal

.0.2 points

Question 7

Ethical process analysisAnswer a. Uses argumentative structures

b. Is that which is examined as the outcome of an experiment

c. Is that which is manipulated or changed

d. All of the above

e. None of the above

.0.2 points

Question 8

Ethical process analysisAnswer a. Is designed for people who are willing to discuss controversial issues with others

b. Examines direct cause-and-effect relationships

c. Focus on cause and effect, but are pre-assigned

d. All of the above

e. None of the above

.0.2 points

Question 9

Decision making could be at:Answer a. Individual level

b. Organization level

c. Business System level

d. All of the above

e. None of the above

.0.2 points

Question 10

Critical thinking is:Answer a. Self-directed

b. Self-disciplined

c. Self-monitored

d. Self-corrective

e. All of the above

.0.2 points

Question 11

Ethics is a guide to thinking.Answer True

False

.0.2 points

Question 12

Disagreements, as an advantage:Answer a. May prevent mistakes

b. Can promote a more inclusive and realistic proposal

c. Creates opportunity for learning

d. All of the above

e. None of the above

.0.2 points

Question 13

Disagreements, as a disadvantage:Answer a. May threaten cooperation

b. Can create a debating game of winners and losers

c. May delay action

d. All of the above

e. None of the above

.0.2 points

Question 14

Analyzing, evaluating, and improving are critical in critical thinking.Answer True

False

.0.2 points

Question 15

Which of the following is correct about ethics and corporations?Answer a. Ethical behavior of Corporate entities could be legally binding on company executives through agency law

b. The decisions made by the teams are the responsibilities of the individual executives

c. Corporate teams perform as individuals when making ethical decisions

d. All of the above

e. None of the above

.0.2 points

Question 16

Critical thinking is Answer a. An objective reasoning and judgment to determine merits and faults.

b. Thinking aimed at a well-founded judgment, using appropriate evaluative standards to determine true worth, merit, or value.

c. The art of thinking about thinking while thinking, in order to make thinking better.

d. All of the above.

e. None of the above.

.0.2 points

Question 17

Critical thinkersAnswer a. Use theories to explain how the mind works.

b. Apply those theories to the way they live every day.

c. Have self-command of the principles of critical thinking; keep alive in the mind; and have continual engagement in everyday life.

d. All of the above.

e. None of the above.

.0.2 points

Question 18

Ethical process analysisAnswer a. Balances advocacy and inquiry

b. Includes both descriptive and normative analysis

c. Connects dialogue and argument

d. All of the above

e. None of the above

.0.2 points

Question 19

The following are related to the theory of absolutism and relativism, except:Answer a. Lack of contact with other cultures

b. Morally Relevant Differences

c. The variety of Ethical Outlooks

d. The Right of People to Decide

e. Required Conditions for Doing Business

.0.2 points

Question 20

Corporations are legal entities that bear no social responsibility.Answer True

False

.0.2 points

Question 21

The following could be identified in corporate governance, except:Answer a. Interested groups vs. Corporate goals

b. Stakeholders Theory

c. Devil’s advocate

d. Property Rights and Social Institutions Theory

e. Contractual Theory

.0.2 points

Question 22

The following could be identified in corporate governance, except:Answer a. Property Rights and Social Institutions Theory

b. Diversity myths

c. Contractual Theory

d. Agency Theory

e. Codes of Ethics

.0.2 points

Question 23

Which of these does not belong to the Dialogical Choice of Debate:Answer a. Is driven by implicit meanings

b. Exploits weaknesses

c. Increases alienation

d. Forces participants to protect positions

e. Forces participants to face each other as combatants

.0.2 points

Question 24

Critical thinkers use theories to explain how the mind works.Answer True

False

.0.2 points

Question 25

In international business, ethical frame of reference could beAnswer a. Diversity Consciousness versus Understanding

b. Awareness versus Skills in handling people

c. Absolutism versus Relativism

d. Enhanced Diversity versus Skills

e. Expanded Horizon versus Empowerment

.0.2 points

Question 26

Ethical issues of concern in international business include the following, except:Answer a. Taking an active role in educating yourself

b. Foreign Bribery

c. Cultural Differences

d. Employment Practices

e. Consumer Protection

.0.2 points

Question 27

Define critical thinking in five ways.Answer

1. First, critical thinking seeks to evaluate the validity of a claim by presenting oneself with arguments that will help the thinker know the validity of a claim.

2. From this, critical thinking is, as said in the previous questions, self-directed, self-disciplined, self- monitored, and self-corrective thinking. This means that a critical thinker is aware of his thought process, and evaluates it over and over again so that he can correct any preconceived notions and assumptions.

3. Because of this, critical thinking allows the thinker to have a clear and open mind that will entertain all sorts of claims, how absurd they may appear to be initially.

4. However, this does not mean that critical thinking will result in accepting all assumptions – after entertaining the claims, there will be a reasonable, disciplined, and controlled filtering process that will accept and reject some of the claims.

5. Lastly, critical thinking requires thinkers to use sound theories that explain how the mind works, and apply these theories in everyday decision-making processes. In the end, critical thinking involves criticizing one’s own mind.

.0.5 points

Question 28

Corporate social responsibility is the voluntary actions and decision outcomes affecting society, that are perceived to have the best interest of society, not just goals beyond purely economic and legal responsibilities.Answer True

False

.0.2 points

Question 29

Ethical process analysis Answer a. Is neither dependent nor independent

b. Begins with people stating their views of what should be done

c. Is only of the control, extraneous, and moderator variety

d. All of the above

e. None of the above

.0.2 points

Question 30

People see the role of managers in business ethics as:Answer a. Economic Actors

b. Company Leaders

c. Community Leaders

d. All of the above

e. None of the above

.0.2 points

Question 31

How can you apply critical thinking to your life and in business in five different ways?Answer

1. First, when we are presented with a claim or a problem, we must gather the necessary information needed to evaluate the claim properly and reasonably. We must be persistent in researching about the claim, so that we will not simply jump to conclusions as this can destroy us quite rapidly. Also, when we gather information, we must research furthermore where this information came from, as sources can affect the credibility of the information. For example, some guy tells me that my wife has been seeing some other guy. I should gather a lot of information about this claim before I confront my wife. Also, I should evaluate who this guy is (my father, my brother, or some prankster neighbor kid).

2. Second, after gathering the needed information, we must analyze it thoroughly. Weight out the evidence, conduct tests and experiments if this is about an academic research or a business survey.

3. After all of these, combine the findings and formulate possible conclusions. I can write these explicitly or this can happen in a few seconds only inside my head. As all these commence, we must remember to be open minded, and that in some cases, there is no absolute answer.

4. Consider and listen to the views of other people. In fact, it is better to try and put myself in the shoes of other people. For example, I have a heated disagreement with an officemate because he insists on cutting budget for production, while I defend my stand of increasing the budget so that quality products are made. Unknowingly, this officemate of mine can be the one who is pressured almost every day by questions of the board regarding the diminishing profits over the past few weeks, while I am not receiving that amount of flak. Considering this will push me to pursue an agreement that will benefit the both of us, in a clear and calm manner.

5. Lastly, I believe in trying to understand the background of the person talking to me. This is very much related to 4, but this involves the person’s ethnicity, cultural background, religion, job, etc. There are lots of listening that we need to do in life, and when we allow ourselves to really listen, then we can make each other’s lives better than before.

.0.5 points

Question 32

Ethical process:Answer a. Examines direct cause-and-effect relationships.

b. Focus on cause and effect, but are pre-assigned.

c. Is a way of working together to make better decisions and fewer mistakes.

d. All of the above

e. None of the above.

.0.2 points

Question 33

Likely guideline (s) for multinational companies (MNC) could be:Answer a. Human Rights

b. Welfare

c. Justice

d. All of the above

e. None of the above

.0.2 points

Question 34

To maintain ethical standards:Answer a. Become a critic of your thinking.

b. Establish old habits of thought.

c. Develop no confidence in your ability to reason and figure things out.

d. All of the above.

e. None of the above.

.0.2 points

Question 35

Ethical issues of concern in international business include the following, except:Answer a. Employment Practices

b. Be modest

c. Consumer Protection

d. Environmental Protection

e. Political Payments and Involvement

.0.2 points

Question 36

Ethics in the World of Business affect:Answer a. Business Decision Making

b. Economic Interest

c. Organizational Interest

d. All of the above

e. None of the above

.0.2 points

Question 37

Which of the following is not in the logical order of progression in an

Ethical Process Dialogue:Answer a. Encounter Disagreements

b. Engage in Dialogue

c. Develop Good Reasons

d. All of the above

e. None of the above

.0.2 points

Question 38

Disagreements, as a disadvantage:Answer a. May favor “argumentative” types over others

b. May stifle participation

c. May be stressful

d. All of the above

e. None of the above

.0.2 points

Question 39

The best critical thinker pays close attention to thinking by:Answer a. Analyzing

b. Evaluating

c. Improving

d. All of the above

e. None of the above

.0.2 points

Question 40

Thinking Critically, you would:Answer a. Examine your thinking and put it to test.

b. Take your thinking apart, to see it as something constructed out of parts.

c. Identify weaknesses, while recognizing the strengths.

d. Creatively reconstruct your thinking to make it better, overcoming the natural tendency of the mind to be rigid.

e. All of the above.

.0.2 points

Question 41

To maintain ethical standards:Answer a. Apply non-intellectual standards to thinking.

b. Focus on clarity, accuracy, precision, and relevance.

c. No need for depth and breadth.

d. All of the above

e. None of the above.

.0.2 points

Question 42

To maintain ethical standards:Answer a. No need for logic and significance.

b. No need for fairness.

c. Avoid sweeping statements that could lead to serious errors.

d. All of the above.

e. None of the above.

.0.2 points

Question 43

Ethics affect business decision making only in theory.Answer True

False

.0.2 points

Question 44

Ethical issues of concern in international business include the following, except:Answer a. Wages and Working Conditions

b. What is a Justified Wage?

c. Following through

d. Foreign Bribery

e. Cultural Differences

.0.2 points

Question 45

Which of these does not belong to the Dialogical Choice of Dialogue:Answer a. Is driven by individual interests

b. Supports strengths

c. Strengthens community

d. Allows participants to explore positions

e. Allows participants to face each other as partners

.0.2 points

Question 46

Ethics is the right or wrong without regard to culture or perception.Answer True

False

.0.2 points

Question 47

Disagreements, as an advantage:Answer a. Allows us to examine reasons

b. Increases the pool of resources

c. Can reveal a proposal’s limits

d. All of the above

e. None of the above