Latest HBX CORe Practice Test Questions, HBX CORe Final Examination Exam Dumps

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NEW QUESTION # 136
Which of the following situations is an example of materiality in accounting?

• A. Company A receives an order from its largest customer, but it is a relatively small order. Company A does not make any entry into the accounts at the time it receives the order.
• B. Company A owns land that it purchased for $100,000 twenty years ago. The land is now appraised at $250,000, but Company A does not adjust the value of the land in its accounts.
• C. Company A wants to purchase $100,000 worth of fabric to use in its upholstery business. However, the supplier will not grant credit for a purchase that large, so Company A reduces the order to $20,000.
• D. Company A initiates a relatively small new advertising campaign. Company A decides to include these costs as part of selling, general, and administrative expenses on the income statement rather than disclose them separately.

Answer: D

NEW QUESTION # 137
An individual interviews 15 people under the age of 40 and asks each for their age and salary. The resulting scatter plot is shown below.

Based on this graph, the correlation between age and salary appears to be approximately:

• A. 0.7
• B. -0.7
• C. -0.3
• D. 0.3

Answer: A

NEW QUESTION # 138
An individual is considering whether to fly or take the train for an upcoming trip. This individual works remotely for $10/hour, but will not be able to work while on the airplane or train. The flight would take two hours and cost $125; the train would take eight hours and cost $50. What are the respective total economic costs of taking the flight and taking the train?

• A. $20 and $80
• B. $125 and $50
• C. $145 and $130
• D. $75 and $175

Answer: C

NEW QUESTION # 139
During 2013, a company's prepaid expense decreased by $40,000, while its unearned revenue increased by $60,000. The company reported a pretax income under accrual basis of $250,000 on its 2013 income statement. What is the company's pretax income under
cash basis of 2013?

• A. $230,000
• B. $270,000
• C. $350,000
• D. $150,000

Answer: C

NEW QUESTION # 140
A company reported income before taxes of $800,000 for Year 2. The company did not have temporary taxable differences at the end of Year 1 but reported a net deferred tax asset of $6,000 for Year 2. The effective income tax rate is 30 percent. What amount should the company pay as income tax for Year 2?

• A. $241,800
• B. $240,000
• C. $234,000
• D. $246,000

Answer: D

NEW QUESTION # 141
A company buys a machine for $175,000. The machine will be depreciated on straight-line basis over a 10-year period with salvage value of $25,000. The company expects the machine to generate after-tax net cash inflows of $30,000 in each of the 10 years. At the end of the 10 years, the machine is expected to be sold for $25,000. The discount rate is eight percent.

What is the net present value?

• A. $37,875
• B. $212,875
• C. $26,300
• D. $51,300

Answer: A

NEW QUESTION # 142
Most patients who need organ transplants rely on donors, as the buying and selling of organs is illegal. If a country legalized the buying and selling of organs, what would be the result?

• A. Only wealthy citizens of the country would be better off.
• B. There would be a shorter waiting time for organ transplants.
• C. Fewer organ transplants would be available.
• D. There would be a decline in total welfare in the country.

Answer: B

NEW QUESTION # 143
A company wants to sell an extremely rare antique. The company does not know how highly consumers value the antique, but it knows that any single consumer's value will rise if the consumer believes other people have a high value for the antique. How should the company sell the item to maximize its price?

• A. Conduct either a Vickrey (sealed second-price) auction or a sealed first-price auction
• B. Conduct a sealed first-price auction
• C. Conduct a Vickrey (sealed second-price) auction
• D. Conduct an English (open outcry) auction

Answer: D

NEW QUESTION # 144
A student wants to analyze the relationship between the percentage of the population in a given city with some college experience and the newspaper circulation in that city. College experience is defined as the percentage of adults in the city that have completed high school and taken some classes at the college level. The appropriate data were collected and a regression analysis was performed, the results of which are displayed below.

Assuming a 5% significance level, what can be said about the relationship between newspaper circulation and the percent of the population with some college experience?

• A. The student should reject the null hypothesis: there is not enough evidence to conclude that there is a significant relationship between the percent of the population with some college experience and newspaper circulation.
• B. The student should not reject the null hypothesis: there is not enough evidence to conclude that there is a significant relationship between the percent of the population with some college experience and newspaper circulation.
• C. The student should reject the null hypothesis: there is enough evidence to conclude that there is a significant relationship between the percent of the population with some college experience and newspaper circulation.
• D. The student should not reject the null hypothesis: there is enough evidence to conclude that there is a significant relationship between the percent of the population with some college experience and newspaper circulation.

Answer: B

NEW QUESTION # 145
A company designs and sells premium jewelry primarily to wealthy professionals living in urban centers. This market is very competitive, and consumers often develop strong brand loyalty. The CEO of the company wants to increase sales. What is the MOST effective advertising strategy?

• A. Emphasizing the flaws of one of the company's competitors
• B. Promoting a new line of jewelry that imitates competitors' offerings
• C. Promoting jewelry without mentioning brand names
• D. Emphasizing customers' positive in-store experience at the company

Answer: D

NEW QUESTION # 146
Which of the following activities will NOT cause net cash provided by investing activities to increase under US Generally Accepted Accounting Principles (GAAP)?

• A. Receiving interest on loans made
• B. Collecting cash as principal from loans made to others
• C. Selling fixed assets to another party for cash
• D. Selling short-term investments for cash

Answer: A

NEW QUESTION # 147
Which of the following options is an example of owner's equity?

• A. Additional paid-in capital
• B. Cash raised by issuing bonds
• C. Obligation to pay common stock dividends that have already been declared
• D. Long-term equity investment in another company

Answer: A

NEW QUESTION # 148
After a year of reduced profits, a commuter rail service has decided to charge a premium for peak hour users. In a media statement released to the public, the rail service company claimed that consumers will benefit from this decision. In what way could consumers benefit from this pricing structure?

• A. The price change makes it more likely that competitors will enter the market.
• B. The pricing structure will increase congestion during peak hours.
• C. The pricing will allow the rail service to continue to serve consumers with lower willingness to pay.
• D. On average, consumers will have a greater share of the value created by the rail service after the price change.

Answer: C

NEW QUESTION # 149
The assets of Company A at the end of their fiscal year are shown on the following common-size table.

Company A is MOST likely to be which of the following types of business?

• A. Law firm
• B. Brewery
• C. Car dealership
• D. Commercial bank

Answer: B

NEW QUESTION # 150
Company B recorded a transaction with a debit of $10,000 to deferred revenue and a credit of $10,000 to revenue. Which of the following situations BEST describes the transaction that would lead to this journal entry?

• A. Company B received an order for a product at the price of $10,000.
• B. Company B collected $10,000 for a product that had not been delivered.
• C. Company B sold a product for $10,000.
• D. Company B delivered a product for which $10,000 had already been paid.

Answer: D

NEW QUESTION # 151
A product manager wants to predict a sales team's performance for the upcoming year based on the average price of the products the team sells and the number of staff members on the sales team. Team performance is measured on a scale from 0 to 100. The resulting regression equation is below:
Performance = 33.50 - 0.02(product price) + 0.79(number of staff members)
What is the predicted team performance for the upcoming year, given that the average price of products sold is forecasted to be $40, and there are 25 people on the sales team?

• A. 64.60
• B. 14.55
• C. 18.95
• D. 52.45

Answer: D

NEW QUESTION # 152
Which of the following figures does an analyst need to calculate from the income statement in order to calculate free cash flows?

• A. Net revenue
• B. Gross profit
• C. Capital expenditures
• D. Earnings before interest and taxes

Answer: D

NEW QUESTION # 153
Which of the following statements is characteristic of all assets?

• A. They are obligations to a third party.
• B. They are owned free and clear by the organization.
• C. They can be converted to cash in the short term.
• D. They are owned or controlled by the organization.

Answer: D

NEW QUESTION # 154
A student is interested in which factors affect the U.S. poverty rate and develops a linear regression model. The student uses poverty rate in all 50
U.S. states and Washington D.C. as the dependent variable and wants to relate it to the following variables:
The unemployment rate
The percent of the adult (over 25) population with at least a bachelor's degree
The percent of the population without health insurance
The percent of the adult (over 25) population without a high school diploma or equivalent
The percent of households with children under 18 run by a single mother
The student collects data from each state and Washington D.C. for the year 2012 and runs the regression in Excel. The results of this regression are given below.

Based on these results, select the independent variables that have a coefficient that is statistically significant at the 5% level. (Select all that apply.)

• A. Percent of Population Uninsured
• B. Percent of High School Dropouts
• C. Percent of Single Mother Households
• D. Bachelor's Degree or Higher
• E. Unemployment Rate

Answer: B,D

NEW QUESTION # 155
Why would an entrepreneur want to operate a mobile food truck instead of a restaurant?

• A. In the short-run restaurants make zero economic profit.
• B. A mobile food truck has lower fixed costs than a restaurant.
• C. In the long-run restaurants make zero economic profit.
• D. A mobile food truck invites a wider variety of customers than a restaurant.

Answer: B

NEW QUESTION # 156
A study was conducted to examine the relationship between age, education level, number of minor legal offenses, daily alcohol consumption, and annual income.

Based on the regression output below, what is the 95% confidence interval of the variable that has the highest statistical significance?

• A. (-1,374.98; 1,232.89)
• B. (-6,560.05; 3,313.41)
• C. (303.02; 9,839.49)
• D. (-3,990.67; 6,334.97)

Answer: C

NEW QUESTION # 157
A company owns an empty office building and is deciding how to use it next year. It would cost $100,000 to staff the office and $15,000 for equipment. The revenues would be $160,000. Meanwhile, it could rent the office to another company for $75,000 in revenues. In both cases, the company must pay $5,000 for the building's electricity. If the company is seeking to maximize its economic profit, which course should it pursue and what is the outcome?

• A. Rent the office to another company, and earn $30,000 in economic profit.
• B. Rent the office to another company, and earn $70,000 in economic profit.
• C. Rent the office, and earn $35,000 in economic profit.
• D. Use the office, and earn $40,000 in economic profit.

Answer: A

NEW QUESTION # 158
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