Mba Study Guide: For Preparation For Oral Examination
Mba Study Guide: For Preparation For Oral Examination
6th Edition
Revised: June 2008
Dear MBA Student:
This STUDY GUIDE is provided for you from the graduate faculty of the College of
Commerce and Business Administration (CCBA). The purpose of this GUIDE is to
assist you in preparing for your oral examination that you will take once you have
completed all of your MBA course work. You must apply to take your oral examination
no later than the beginning of the semester in which you plan to take the exam (be sure
you check the calendar in order to determine application deadlines), which can be no
sooner than your last semester of coursework. Application forms are available in the
College of Graduate Studies’ office located on the third floor of Bibb Graves Hall or
online. The completed application form, which also serves as the Application for
Degree, should be returned to that office.
Questions from members of the graduate faculty of the CCBA are included in this
volume. The questions are grouped by discipline and are presented by specific courses.
Please understand that this GUIDE is not intended to be comprehensive; i. e., you
may be asked questions that are not included herein and questions may be asked
for any courses that you have had in your program, regardless of the composition
of your committee. The purpose for providing you with this set of questions is to
assist in better structuring your review for the oral examination.
Even though this GUIDE is provided, you should discuss your examination with
the members of your oral committee. You will receive a letter indicating who these
individuals are before midterm of the semester in which you plan to take your oral exam.
In the letter, you will be instructed to contact the chairperson of your committee in order
to establish a date and time for your oral examination.
Sincerely,
6th Edition
Revised: June 2008
BUSINESS ADMINISTRATION COURSES
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11. What considerations would most often influence the choice of manufacturing
methods? EX: Volume, product complexity, size, skill level req., equipment
needs.
12. Explain the use of Regression Analysis in forecasting including both input
considerations and output review for decision making. EX: Dependent variable,
independent, cases, correlation coefficient, etc.
13. Outline the steps and options for the successful use of simulation modeling.
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14. Pick an industry of your choosing. Clearly define the strategic groups and the
players involved. Why did you define them as you did? Is it relatively easy to
change groups in this industry?
15. What are the major items you would research in evaluating a company for
investment or acquisition? Explain.
ACCOUNTING COURSES
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6. What is a common or joint cost?
7. Students should be familiar with the following areas:
• Cost classifications, flows through accounts, and behavior
• Job order costing
• Process costing
• Cost-volume-profit analysis
• Variable vs. Absorption costing
• Activity-based costing
• Standard costing and variance analysis
• Master budgets
• Capital budgeting
AUDITING
1. What is the primary purpose of the audit function? Who hires and pays the
auditor? Who does the auditor work for?
2. Do you believe the rapid increase in consulting services performed by CPAs has
hurt auditor independence?
3. Did the Enron scandal result from a failure of the audit function? If not, what was
the primary failure by the CPA firm?
4. Give two examples each of preventive and corrective controls.
5. State three purposes of an audit program.
6. When should an audit program be prepared?
7. An auditor’s conclusion about audit risk at the financial statement level could impact
the audit in what ways?
8. What hazards can be found in devising written tests for internal audit applicants and
how can the hazards be avoided?
9. What significant benefits can the audit department obtain by reviewing proposed
audit schedules with top management?
10. Why should an internal auditor review computer systems and applications before
using the computer as an audit tool?
11. What attributes of internal auditors must be appraised by external auditors before
they may rely on the work of the internal auditors?
12. Define the non-government “single audit” concept.
FINANCIAL ACCOUNTING
1. Discuss the revenue recognition and the matching principles as they relate to the
preparation of the financial statements.
2. Discuss the relationship between historical cost and market value in recording
assets on the balance sheet. What is the relationship between the two on the day
an asset is acquired?
3. If the objective of financial reporting is to provide useful information to decision
makers (investors and creditors), why does the Financial Accounting Standards
Board allow different methods of accounting for inventory, depreciation, etc.?
4. As more businesses operate in foreign environments, discuss the impact of a
strengthening dollar on the operating results of the foreign operations.
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MANAGERIAL ACCOUNTING
1. In a manufacturing environment, what are the primary criteria to be used in
assigning a cost driver for allocating overhead? What are the potential
consequences of using the “wrong” cost driver?
2. Which of the major manufacturing costs (materials, labor, overhead) is declining
as a percentage of total product cost? Why?
3. Discuss the benefits of activity based costing as opposed to job order costing or
process costing.
4. Many firms are now moving their operations outside the United States. Discuss
reasons why firms choose to operate in foreign countries.
TAX ACCOUNTING
1. What is the primary purpose of the federal income tax? Who passes the federal
tax laws?
2. Discuss examples in which Congress uses tax laws in an attempt to manage the
economy and to influence the behavior of citizens.
3. Discuss key differences in the taxation of individuals (sole proprietorships) versus
corporations.
4. Discuss differences in the deductions allowed for personal expenditures as
opposed to business expenditures.
ECONOMICS COURSES
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make. How would we use net present value to decide whether or not to buy the
machine? Assume that the interest rate for borrowing and lending is 12%.
10. What is the difference between economic and accounting profit? Use an example
to explain.
11. In some industries, such as the petroleum industry, producers justify their
reluctance to lower prices by arguing that the demand for their products is
inelastic. Explain.
12. Suppose that research shows that the elasticity of demand for doctors’ services
is 0.6; foreign travel, 4.0; and 1.2 for televisions. Use the determinants of
elasticity to explain these figures.
13. Discuss demand
How can demand for a product be estimated?
What factors affect it?
14. Discuss the law of diminishing returns.
15. Discuss economies of scale.
How much output maximizes profits?
Market Structures:
Which is the most efficient? Why?
Why are monopolies thought to be so bad?
Barriers to entry;
Which structures have them?
Name some
Explain how they prevent normal profits.
A monopoly produces _____ output and charges a _______ price than a firm in
pure competition.
16. Discuss collusion, advertising (when it is useful), positive profits.
Which structure is most common?
Give examples of each market structure.
17. Which types of firms have at least some control over the prices they charge?
18. How do firms decide on their profit-maximizing level of output?
19. How will you use economics in everyday life?
20. Be able to graph supply and demand and analyze.
21. Discuss maximization and minimization. Know the steps.
22. What is the law of diminishing marginal returns?
23. Distinguish between fixed and variable costs.
24. Discuss the role of government in a market economy. Include patents, pollution
control, public goods.
25. Name reasons why profits exist.
26. Suppose JSU raises its tuition by 35% and revenues fall by 5%. Was this a
sound decision and is demand price elastic?
27. Name a good with a large elasticity and explain why.
28. Why does the government allow some monopolies to exist? How does it protect
the consumer?
29. If the supply of turkeys turned out to be unusually small this Thanksgiving, would
you expect a shortage? Why or why not?
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30. Coke machines are designed so you can get only one drink per payment ,while
newspaper machines allow the consumer to get all of them. What are the
economics being considered by this design?
31. If a price ceiling of $1 per pound was placed on lobster sold at retail, where could
you go to eat lobster?
32. Explain the following statement by a military recruiter: "There's nothing like a
good recession to cure our recruiting problems."
33. Rising commercial rents in San Francisco in recent years have induced many
corporations to move their offices out of the city. Can a San Francisco firm that
owns its own office building simply ignore rising rents?
34. Federal law currently prohibits the sale of human organs for transplant purposes.
At the present time people are dying while waiting for suitable organs to become
available. It seems almost certain that more organs would become available if
financial incentives were offered to prospective donors. Would you be in favor of
allowing this? What consequences would you predict?
35. How long will you search for a $20 bill that you lost in your room if you value your
time at $5 per hour? Is it rational to search longer than four hours?
36. You usually pay $1 per bottle for soda. Last Saturday a one-time promotion
allowed you to get your weekly supply for $.50 per bottle. Your neighbor comes
over and informs you that he just ran out of soda during a party and would like to
purchase some from you. What would be a fair price to charge?
37. Attorney Fudd is the most highly sought-after lawyer in the state. He is also a
phenomenal typist who can type 120 words per minute. Should Fudd do his own
typing if his fastest secretary can only type 65 words per minute?
38. Have you ever noticed how few gasoline stations are found in the center of large
cities? With such heavy traffic one ought to be able to do an excellent business.
Why then are there so few?
39. If you saw a bumper sticker that said, "Eliminate Government Waste - At Any
Cost," would you agree or disagree? Why?
40. Gaining extra revenue is easy for any producer - all it has to do is raise the price
of its product. Do you agree?
FINANCE COURSES
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d. Value Line composite index
e. Wilshire 5000 index
6. What is fundamental analysis? Does the performance of a company have any
bearing on the value of its stock? Explain.
7. Briefly describe the dividend valuation model and the different ways this model
can be used. Explain how CAPM fits into the dividend valuation model.
8. Briefly describe the P/E approach to stock valuation.
9. What is the purpose of technical analysis? Explain how and why technicians use
it.
10. What is random walk hypothesis, and how does it apply to stocks? What is an
efficient market? How can a market be efficient if its prices behave in a random
fashion?
11. Explain why it is difficult, if not impossible, to out perform an efficient market
consistently.
12. Does that mean high rates of return are not available in the stock market?
13. How can an investor earn a high rate of return in an efficient market?
14. What are the implications of random walks and efficient markets for technical
analysis? For fundamental analysis? Do random walks and efficient markets
mean that technical analysis and fundamental analysis are useless? Explain.
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17. Why do stock prices usually fall when interest rates rise (give at least two
reasons)
18. What is arbitrage?
19. How does arbitrage contribute to an efficient market?
20. What do the factors in the arbitrage pricing model tell us?
21. Suppose you expect to receive 1,000,000 Marks in three months. What risk are
you facing and how could you use financial derivatives to protect yourself?
22. Suppose your bank knows for certain it will receive a $10,000,000 loan payment
in six months. What risk is it facing and how could it use financial derivatives to
protect itself?
23. What's an interest rate swap? How is an interest rate swap structured so that both
parties benefit?
24. What considerations do firms use in determining their optimal capital structure?
25. How might tariffs and quotas affect a domestic firm's capital structure decision?
26. What is free cash flow?
27. What should ethically-responsible firms do with their free cash flow?
28. Name five variables affecting the value of a call option. How do changes in these
variables change the value of the option?
29. How does one compute the premium on a call option? How does this premium
react to changes in the value of the underlying stock?
30. Does a firm's operating leverage or financial leverage affect its Beta? If so, How?
31. Using NPV profile analysis, explain why NPV and IRR can provide conflicting
investment decisions?
32. What is capital budgeting?
33. How does one determine the discount rate used in capital budgeting?
34. How would changes in the firm's tax rate affect the discount rate used in capital
budgeting?
35. How would changes in the firm's tax rate affect the accept-reject decision in
either the NPV or IRR criterions?
36. Describe the signaling effect of issuing stock vs. debt to finance the firm's capital
budget.
37. Describe how a firm's managers can use dividend policy to provide signals to
investors.
38. How does using debt financing "bond" the firm's free cash flows?
39. Suppose your firm has $100,000,000 in free cash flow. How might the firm best
distribute these funds to shareholders?
40. What's the difference between a stock split and a stock dividend? What effect do
these have on shareholder wealth?
41. What factors should a firm consider when setting its dividend policy?
42. What factors would you consider when faced with a bond refunding decision?
43. What is interest rate parity? Purchasing power parity? What financial process
works to enforce these concepts?
44. Describe in detail three theories explaining the shape of the yield curve.
45. Do you believe managers should take steps to reduce their firm's unsystematic
risk? Why or why not?
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46. When is it appropriate (i.e., in the interest of shareholders) for a manager to
acquire another firm?
47. Your firm has decided to layoff 5,000 employees. What obligations does your
firm have to those losing their jobs? What are the implications of these
obligations to the firm's shareholders?
48. Twenty years ago, your firm left toxic waste buried under what is now a middle-
class suburban neighborhood. This information recently became public when a
high percentage of the residents were diagnosed with cancer. What action
should your firm take? Should you be primarily concerned with the shareholders
or the residents? What actions could/should your firm have taken to protect
itself?
MANAGEMENT COURSES
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3. Why is it important for managers to understand the different cognitive styles of
the people who work for them?
4. Assume you are a manager in charge of multiple teams. What actions would you
take to facilitate the success of these teams in the organizations?
5. Why is it important for teams to manage their external boundaries in addition to
the internal dynamics of the group?
6. What are the differences and similarities of managing a physical team to a virtual
team?
7. What are several key lessons that a manager needs to know to manage in a
virtual environment?
8. Explain the steps you would take in motivating your workforce.
9. What are the basics of leadership? Why is leadership important within an
organization?
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6. Explain the differences and similarities between two styles of leadership?
7. Why is it important for us to understand the context of leadership?
8. Discuss various methods that can be used to develop leaders in today’s
organizations?
9. Discuss how leaders can strategically use teams within organizations.
10. Explain the various components of the follower-leadership relationship.
MARKETING COURSES
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2. Explain some of the alternative portfolio models. Under what conditions would
each be most appropriate to use? Why?
3. Describe the characteristics of the product life cycle stages. What are the
strategic implications of each of these stages?
4. What is meant by “market segmentation?” A number of strategies can help guide
a manager’s choice of target markets. What are some of the more common of
these strategies?
5. Describe some of the strategies one may use for mature or declining markets.
6. Firms can use two kinds of marketing strategies to compete in the international
arena – standardized and individualized. Describe each of these in a strategic
sense.
7. Describe the Product Life Cycle and how it is used by Marketing Managers.
What are the shortcomings of this management tool?
8. What is positioning? Offer examples of how the positioning of competing brands
is different.
9. What are Target Markets? What dimensions can be used to identify these Target
Markets? Once identified, how are these Target Markets utilized?
10. Where do companies look for growth? Specifically, what are the four basic
categories of growth opportunities for companies today?
11. What are sources of secondary data that may aid Marketing Managers in
analyzing existing markets and identifying potential markets? What are research
methods that could result in primary data that might help Marketing Managers
better understand existing markets and identify potential markets?
12. Compare and contrast Business Customers and Final Consumers.
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8. Differentiate between an international orientation and a global orientation in
International Marketing.
9. Describe the position taken by those who subscribe to the “Standardization”
position. The “Adaptation” position.
10.) What is meant by the term, “Glocalization?” How would this differ from the
position taken in Global Marketing?
11.) Describe several non-tariff barriers to entry found in International Marketing
12.) Describe four strategies that could be used in order to standardize a firm’s
advertising.
13.) Describe three ways a firm can organize its advertising agencies in the
international arena.
14.) Describe transfer pricing. In the international area of marketing, why do firms
often take a low markup in one country and a higher one in another (Assume
here that the product is made in one nation and sold in the other).
15.) What are the four managerial tools available to management to control their
channels?
16.) In Export Marketing, why are their two channel members composing the
channel?
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