CORe Sample Practice Exam Questions 2023 Updated Verified
Exam Study Guide Free Practice Test LAST UPDATED CORe
NEW QUESTION # 56
The following regression equation shows the relationship between the cost of homeowner's insurance and two variables: the home's distance from the waterfront (in miles) and the amount spent on the home's security system (in dollars).
Cost of Homeowner's Insurance = 3,000 - 300*(distance from waterfront) - 10*(amount spent on security systems)
Which of the statements below accurately describes this relationship?
- A. For each additional mile a house is from the waterfront, the cost of homeowner's insurance decreases by $300 on average.
- B. As a house's distance from the waterfront increases by 300 miles, the amount spent on security systems decreases by $10 on average.
- C. Provided the distance from the waterfront remains constant, for each additional dollar spent on a security system, the cost of homeowner's insurance increases by $10 on average.
- D. Provided the amount spent on security systems remains constant, for each additional mile a house is from the waterfront, the cost of homeowner's insurance decreases by $300 on average.
Answer: D
NEW QUESTION # 57
Which of the following options would increase the willingness to pay for new cars in a country?
- A. The government increases the tax on new cars.
- B. A new highway is built between two major cities.
- C. The number of commuters that use public transit to get to work increases.
- D. The overall price of cars decreases by 15 percent.
Answer: B
NEW QUESTION # 58
Which of the following figures does an analyst need to calculate from the income statement in order to calculate free cash flows?
- A. Earnings before interest and taxes
- B. Gross profit
- C. Net revenue
- D. Capital expenditures
Answer: A
NEW QUESTION # 59
A company's Balance Sheet for the year ended Dec. 31, 2013 is as follows:
(In millions)
The company is MOST likely in which of the following industries?
- A. Retailing
- B. Pharmaceutical
- C. Civil aviation
- D. Commercial banking
Answer: A
NEW QUESTION # 60
The only grocery store in a town has recently seen its profits decrease. An executive at the grocery store has been challenged to find a way to reverse this trend without losing significant sales. What is a possible technique the company can use to increase its producer surplus?
- A. Advertise the products with the highest volumes sold
- B. Charge a monthly fee to its customers and lower prices for its goods
- C. Raise prices on all goods sold
- D. Raise prices for the products with the highest volumes sold
Answer: B
NEW QUESTION # 61
An individual has relocated to a new city for a job and is looking for an apartment. Apartments in this city tend to be low in price but are often in disrepair and lack extra amenities. For each new apartment that comes on the market, there are dozens of people who wish to rent it. What could explain these conditions?
- A. The city has become popular and more people are moving there.
- B. The city is experiencing an economic recession.
- C. There is a price ceiling on apartment rental prices.
- D. Landlords are maximizing profits.
Answer: C
NEW QUESTION # 62
A company sold a piece of equipment to another party for $150,000. The equipment was originally purchased for $300,000. Depreciation of $200,000 had been recognized against the equipment. How would the accounting equation for the company be impacted upon the disposal of the equipment?
- A. Assets increased by $50,000 and owner's equity increased by $50,000.
- B. Assets decreased by $100,000 and owner's equity increased by $100,000.
- C. Assets decreased by $100,000 and assets increased by $100,000.
- D. Assets increased by $150,000 and owner's equity increased by $150,000.
Answer: A
NEW QUESTION # 63
If an analyst looks at a start-up's statement of cash flows for the past three years, it is MOST likely that the analyst will find:
- A. a significant positive operating cash flow, because the start-up may achieve a large market share.
- B. a significant positive operating cash flow because of the effect of depreciation.
- C. a positive investing cash flow, because the start-up has just enough equipment to operate.
- D. a large positive financing cash flow, because the start-up has been funded by investors or other third parties.
Answer: D
NEW QUESTION # 64
In a two-sided hypothesis test for a population mean, which of the following statements provides sufficient evidence to reject the null hypothesis at the 5% significance level?
- A. The one-sided p-value is 0.035.
- B. The sample size is large.
- C. The 95% range around the historical population mean does not include the sample mean.
- D. The 95% range around the historical population mean includes the sample mean.
Answer: C
NEW QUESTION # 65
Individual orange farmers in a country decide to pool their advertising money and collectively release a new series of advertisements for oranges. Why would the farmers do this?
- A. They want to shift the demand curve for oranges to the right.
- B. They want to increase their market power in the orange production industry.
- C. They want to shift the supply curve for oranges to the right.
- D. They want to differentiate their brands.
Answer: A
NEW QUESTION # 66
An on-demand taxi service guarantees that it can provide a taxi in five minutes or less. If the service has a fixed number of taxis, how can it most cheaply guarantee "five minutes or less" during busy periods?
- A. It raises prices during the busy periods.
- B. It is impossible to keep the guarantee during busy periods.
- C. It maintains a fleet of taxis large enough to meet demand in busy periods.
- D. It keeps demand low by encouraging drivers to be less polite during busy periods.
Answer: A
NEW QUESTION # 67
Which of the following options is the measure of how long it takes from the time a business has to pay for inventory from a supplier until it collects cash from the customer from a sale?
- A. Working capital
- B. Cash efficiency
- C. Cash conversion cycle
- D. Days payable outstanding
Answer: C
NEW QUESTION # 68
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. $350,000
- B. $150,000
- C. $230,000
- D. $270,000
Answer: A
NEW QUESTION # 69
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 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.
- 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 not 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 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 # 70
The owner of a t-shirt store on a beach sells 200 shirts per month in the summer for a price of $15.00. During the winter months, the owner reduces the price to $9.00 and sells 100
shirts per month. The store must be leased in one-year increments at $400 per month in rent. The cost of labor, materials, and utilities are an additional $600 a month. Should the store remain open during the winter months?
- A. No, the store should shut down during the winter months.
- B. No, the store should shut down completely.
- C. Yes, the store should remain open but should lower prices to $6.00 during the winter months.
- D. Yes, the store should remain open during the winter months.
Answer: D
NEW QUESTION # 71
A study is conducted to determine what factors drive used car prices. The study initially examined two variables: the make of the car and the number of miles driven on the car. Not surprisingly, the group commissioning the study found that there was a strong relationship between these two variables and price. In an attempt to explain more of the variation in price the researcher added a thirdvariable:the car's age (in years).A prior study had shown that age was a significant factor in explaining used car selling prices. When added to the new model, however, the group found that although adding age explained more of the variation in price, age was no longer significant when combined with the car's make and miles. This problem is an example of:
- A. lagged variables
- B. multicollinearity
- C. heteroskedasticity
- D. homoskedasticity
Answer: B
NEW QUESTION # 72
Two years ago, the purchasing manager at a company spent $25,000 on a new machine that would improve production efficiency at the company. The manufacturers of the machine release an updated model that costs $35,000 and that promises to further improve production efficiency. Under what conditions should the purchasing manager upgrade to the new model?
- A. If the efficiency improvements from the old machine did not result in enough savings to offset the $25,000 purchase price
- B. If the savings from the additional efficiency improvements are large enough to offset the $60,000 spent on machines
- C. If the savings from the additional efficiency improvements are large enough to offset the $10,000 difference in price between the machines
- D. If the savings from the additional efficiency improvements are large enough to offset the $35,000 cost of the new machine
Answer: D
NEW QUESTION # 73
A company had beginning total owners' equity of $350,000. During the year, the company raised $80,000 by issuing new shares of common stock. The net income of current year is
$120,000. No dividend was declared or paid during the year. What is the amount of total owners' equity the company should report on its end-of-year balance sheet?
- A. $430,000
- B. $390,000
- C. $470,000
- D. $550,000
Answer: D
NEW QUESTION # 74
Which of the following activities will NOT cause total assets to increase?
- A. Paying a $300,000 insurance expense for the next three years
- B. Raising $200,000 by issuing new shares of common stock
- C. Purchasing a piece of equipment for $100,000 on credit
- D. Borrowing $200,000 from a local bank
Answer: A
NEW QUESTION # 75
In determining free cash flows, how is the change in net working capital calculated?
- A. Current Assets minus Current Liabilities (year projected) - Current Assets minus Current Liabilities (previous year)
- B. Ending balance of cash (previous year) - Ending balance of cash (year projected)
- C. Current Assets (previous year) - Current Assets (year projected)
- D. Receivables minus Payables (year projected) - Receivables minus Payables (previous year)
Answer: A
NEW QUESTION # 76
The only bakery in a small town has introduced a new type of cookie and is not sure what demand for the cookie looks like. How could the bakery determine the marginal revenue earned by each additional cookie produced?
- A. Ask customers to fill out a survey about how a change in price would affect their purchasing decisions
- B. Conduct a focus group to determine how sensitive customers are to price changes
- C. Increase advertising to raise demand and sell more cookies
- D. Decrease the price by small increments and observe the corresponding changes in quantity sold and revenue
Answer: D
NEW QUESTION # 77
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. Commercial bank
- B. Law firm
- C. Car dealership
- D. Brewery
Answer: D
NEW QUESTION # 78
The table below shows sales data from The Geller Company for the month of January. The company's manager is interested in calculating the average number of units each salesperson sold on their respective sales trips during the month. In total, the five salespeople took at total of 31 sales trips at various times during the month of January.
Which formula below would the manager use to correctly calculate the average number of units Anne sold on her sales trips?
- A. =AVERAGEIF(A2:A32,E2,B2:B32)
- B. =AVERAGEIF(B2:B32,E2,C2:C32)
- C. =AVERAGEIF(A2:A32,E2,C2:C32)
- D. =AVERAGE(B2:B32,E2,C2:C32)
Answer: B
NEW QUESTION # 79
Company B sold a service contract that covers a two-year period for $10,000. The service period commenced on July 1, Year 1. Service revenue is recognized evenly throughout the contract period. What amount should Company B report as deferred revenue from this service contract on its balance sheet on December 31, Year 1?
- A. $5,000
- B. $2,500
- C. $7,500
- D. $10,000
Answer: C
NEW QUESTION # 80
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