Final Capsim Quiz

Question 1

Four Issues that concern the finance department

Answer 1

-Acquiring capitol to expand companies’ assets

-Driving the financial structure of the firm

-Selecting and monitoring performance measures

-Establishing a dividend policy that maximizes return to share holders

Question 2

Three ways to add and raise capitol

Answer 2

-Current Debt (Bank loans)

-Stock Issue

-Bond issue (long term debt)

Question 3

Interest rate and date current debt is paid off

Answer 3

-Yearly interest rate

-Paid off January 1 of next round

Question 4

What is the cap criteria for long term debt

Answer 4

-80% of last years fixed assets

Question 5

Ways to subtract funds

Answer 5

-Retire Stocks

-Retire Bonds

Question 6

% of stocks you can retire each round

Answer 6

5% of total outstanding shares

Question 7

Fee to retire bonds early

Answer 7

1.5%

Question 8

What do dividends affect

Answer 8

Stock Price

Question 9

Benefits of issuing dividends

Answer 9

-Increase your ability to raise capital on investments

Question 10

When may you have to take out an emergency loan

Answer 10

when company runs out of cash

Question 11

Interest rate on emergency loan

Answer 11

7.5% above current years rate

Question 12

Four criteria that sets stock price

Answer 12

Book Value (total equity)

Earnings Per Share

Dividends Per Share

Emergency loans (negative impact)

Question 13

What happens of dividends are set higher then this years EPS

Answer 13

Stock Price goes down

Question 14

Effects of exchange rate

Answer 14

1% transaction fee

appears on cash flow as “effect of exchange rate changes”

Question 15

4 pillars of the balanced scorecard FINANCE

Answer 15

Profit - 10

Return on assets - 5

Market Cap % - 5

Debt/assset ratio - 5

Question 16

4 pillars of the balanced scorecard CUSTOMER

Answer 16

Product Design Score – 10

Awareness – 5

Accessibility – 5

Market Penetration – 5

Question 17

4 pillars of the balanced scorecard INTERNAL BUSINESS PROCESS

Answer 17

Contribution Margin – 10

Capacity Utilization - 5

Market Share - 5

Market Share Growth - 5

Question 18

4 pillars of the balanced scorecard LEARNING AND GROWTH

Answer 18

Employee Turnover - 10

Profit/Employee - 5

Market Price/Employee – 5

Sales/Employee – 5

Question 19

How are scores determined in the 4 pillars

Answer 19

based on how closely you come to achieving the goals set for you each round

Question 20

Effects of adding a region kit

Answer 20

+ 10% demand boost

+ 3m development time

+ 15% material cost per unit

Question 21

% that awareness decreases each round

Answer 21

33%

Question 22

% of accessibility you lose each round

Answer 22

33%

Question 23

Two forecasting formulas

Answer 23

Last year’s market share * current round segment size

Last year’s potential sale * growth rate

Question 24

increasing service life by 1,000 hours does what?

Answer 24

$.30 to material cost

Question 25

New unit of capacity cost

Answer 25

$6 for floor space + $4 * automation raiting

Question 26

does changing the products service life or adding a region effect affect perceived age

Answer 26

NO

Question 27

Cost to increase automation by one point

Answer 27

$4

Question 28

Length of a bond

Answer 28

10 years

Question 29

Brokerage fee when issuing a bond

Answer 29

5%

Question 30

What is the cap criteria for bond holder lending amounts

Answer 30

80% of the value of plant and equipment

Question 31

How are interest rates for newly issued bonds determined

Answer 31

current debt interest rates + 1.4%

Question 32

How do you calculate demand

Answer 32

Your products scores/ total of competitors product scores

Question 33

What are current debt interest rates based on

Answer 33

debt to asset ratio

Question 34

How to calculate working capitol

Answer 34

current assets - current liabilities

Question 35

How is 90 days of sales calculated

Answer 35

90/360

Question 36

how is excess working capital calculated

Answer 36

working capital - 90 days of sales

Question 37

Criteria for max investment in production plant

Answer 37

depends on capitol budget limit

Question 38

capital budget limit calculation

Answer 38

max amount of money that can be raised through stock and bond issues + Excess working capitol - Stock dividends in current year

Question 39

Profit sharing % with employees

Answer 39

2%

Question 40

what happens if the product service life fall below 1,000 hours of the segments guidelines

Answer 40

- 20% to customer satisfaction score -for every 1,000 hours below

Question 41

max number of stocks that can be issued criteria

Answer 41

20% of your company's outstanding shares in that year

Question 42

book value calculation

Answer 42

equity divided by shares outstanding

Question 43

how is equity calculated

Answer 43

common stock and retained earning values listed on balance sheet