Economic Concepts And Analysis Flashcards
What is the objective of sovereign wealth funds?
To invest in technologies, brands, resources, better access to international markets, and protectionist impulses.
What is country risk?
Political and financial risks of conducting business in a particular location.
Batch processing of business transactions can be the appropriate mode when:
When a high volume of transactions exist, economies of scale can be gained by utilizing batch processing since many transactions are processed in the same run.
What does batch processing mean?
Transactions are accumulated for some period of time.
Management reporting systems
Relies on a mix of internal and external data. They also combine financial and operational data so that managers have flexibility in determining the information that they will use for decision making.
What is a distributed data processing network?
Is a network of interdependent computers where certain functions are centralized and other functions are decentralized and processing is shared among two or more computers. In a distributed data processing network, each computer can also process its own data. Distributed data processing is and alternative to both centralization and decentralization.
Which one of the following input validation routines is nit likely to be appropriate in a real-time operation?
A. Field Check
B. Sign Check
C. Sequence Check
D. Redundant data check
In real-time operations, transactions are processed as they occur without regard to any particular sequence. Therefore, a sequence check would not be an appropriate input validation routine.
Which of the following procedures would an entity most likely include in its disaster recovery plan?
A. Convert all data from EDI format to an internal company format.
B. Maintain a Trojan horse program to prevent illicit activity.
C. Develop an auxiliary power supply to provide uninterrupted electricity.
D. Store duplicate copies of files in a location away from the computer center
In the event of certain disasters, the company will need to restore computer files. For certain disasters, the backup will only be possible if the copies are stored at a separate location.
The computer operations procedures should call for a backup of the files. This is a process of making duplicate copies of files and storing them in a different location to protect against loss through fire, flood, and other disasters. If the backup copies are needed, they are copied back to the primary storage devices.
Which of the following computerized control procedures would be most effective in ensuring that data uploaded from personal computers to a mainframe are complete and that no additional data are added?
A. Self-checking digits to ensure that only authorized part numbers are added to the database
B. Batch control totals, including control totals and hash totals
C. Passwords that effectively limit access to only those authorized to upload the data to the mainframe computer
D. Field-level edit controls which test each field for alpha/numerical integrity
Batch control totals, including control totals and hash totals, is the best procedure because the batch control totals for the data transferred can be reconciled with the batch control totals in the existing file. This provides information on the completion of the data transfer.
Although self-checking digits are an effective control to ensure that a correct part has been identified, passwords help ensure that only authorized personnel make the transfer, and field-level edit controls are effective data-entry control procedures, the objective here is to ensure that data transfer is complete.
A department store company with stores in 11 cities is planning to install a network so that stores can transmit daily sales by item to headquarters and store salespeople can fill customer orders from merchandise held at the nearest store. Management believes that having daily sales statistics will permit better inventory management than is the case now with weekly deliveries of sales reports on paper. Salespeople have been asking about online inventory availability as a way to retain the customers that now go to another company’s stores when merchandise is not available. The planning committee anticipates many more applications so that in a short time the network would be used at or near its capacity.
The planning committee was concerned that unauthorized people might attempt to gain access to the network. If the company installs a network using leased lines, then it should ensure that:
A. phone numbers for the network are kept confidential.
B. tone suppression devices are installed on all ports.
C. transmission facilities on its premises are secure.
D. network availability is limited to certain times of the day
If the company installs a leased-line network, it should ensure that transmission facilities on its premises are secure.
In a leased-line network, there are no phone numbers and hence no ports with tone devices for incoming calls. Limiting network availability to certain times of the day is often associated with public switched lines, not leased lines, to reduce the time during which unauthorized people could potentially gain access to the system
It is important to maintain proper segregation of duties in a computer environment. Which of the following access setups is appropriate?
A. Users have update access for production data
B. Users have update access for production data and application programmers have update access for production programs
C. Application programmers have update access for production data and users have update access for production programs
D. Users have update access for production data and application programmers have update access for both production data and programs
Users need to update data through applications programs.
Application programmers should not be able to change production programs. They should submit changes to the change control unit.
Application programmers should never have update access to production data. Users have no need to change production programs.
The gross margin ratio can be subjected to detailed analysis by a firm’s:
A. creditors.
B. customers.
C. investors.
D. management.
Sales = Unit Price x Number of Units
COGS = Unit Cost x Number of Units
Gross Margin = (Unit Price - Unit Cost) x Number of Units
The above detailed information is available only to the firm’s management.
Thus, a detailed analysis could not be performed by the other parties mentioned.
A company purchases inventory on terms of net 30 days and resells to its customers on terms of net 15 days. The inventory conversion period averages 60 days. What is the company’s cash conversion cycle?
A. 15 days
B. 45 days
C. 75 days
D. 105 days
The cash conversion cycle is the time between the investment of cash in inventory and the return of cash after the sale and collection of the related account receivable. In this case, cash is not invested in the inventory until 30 days into the 60-day inventory conversion cycle. The remaining 30 days of the inventory conversion cycle plus the 15-day receivable collection period results in a 45-day cash conversion cycle
Using the expenditure approach, GDP equals
Personal consumption + gross domestic private investment + government purchases + (exports - imports)
Contribution margin ratio is
the contribution margin divided by the sales revenue
