Unit 8 Quiz

One reason a company might make a capital investment is to increase production.

• True

• False

Which of the following is an example of a capital investment?

• A new brand of staplers for employee use

• Land to build a new office

• A billboard advertisement

• A radio or TV advertisement

Which of the following is a likely reason for a company to make a capital investment?

• To forecast sales

• To calculate assets

• To save costs over time

• To determine if they are insolvent

Which of the following is an example of a capital investment made to improve production efficiency?

• Selling an unused production facility

• Building a wind farm to limit utility costs

• Purchasing a new CNC machine to increase product volume

• Improving product durability to gain an advantage over a competitor

Hiring a celebrity to endorse a product is an example of a capital investment.

• True

• False

Improving a company’s branding by creating a new slogan is an example of a promotional investment.

• True

• False

Which of the following is a reason why companies engage in promotional investing?

• To streamline processes

• To increase audience size

• To improve product efficiency

• To improve cost savings over time

Which of the following is a potential disadvantage of promotional investments?

• A. Investor scrutiny

• B. Increased profit

• Public scrutiny

• Capital equipment costs

Which of the following activities would be related to promotional investing?

• Building solar panels

• Hiring technical staff for a TV commercial

• Purchasing new laptops for sales staff

• Raising capital to purchase training software

The purpose of a break-even analysis is to ________.

• determine demand.

• determine previous sales.

• determine capital investment cost.

• determine if a capital investment will be profitable.