Reference no: EM132487309

Questions -

Q1) Gargant Boats produces and services lightweight boats for recreational use. It has an unusual business model in that it controls the value chain from boat design and manufacture right through to sales and service of the boats. At the time of sale, customers can also buy a low-cost three-year maintenance package. Margins on boat sales and maintenance packages are very small, but where Gargant ultimately makes significant profit is through non-warranty repairs (from accidents and other user-caused damage) and customization (modifications and accessories). The company has determined that customers who buy the maintenance package are significantly more likely to have non-warranty repairs and modifications performed at a Gargant shop, rather than taking their boat to a third party. Which of the following metrics is the best predictor of Gargant's success?

a) Number of boats sold

b) Percentage of customers who modify their boats

c) Percentage of boat owners who have accidents

d) Number of maintenance packages sold

Q2. Darascal Industries is evaluating the risks associated with a new project. The project will need to be funded through debt, and the company wants to evaluate the impact of various changes in interest rates on the project's returns. Which of the following tools should Darascal use for this analysis?

a) Benchmarking

b) Probabilistic models

c) Sensitivity analysis

d) Scenario planning

Q3. Cornerstone Properties owns and leases out a number of high-end office buildings in Cornerville. The company recently partnered with a well-respected property management company, PropCo, to jointly purchase a new residential building containing 12 rental units. Cornerstone is insured against business income losses. PropCo also proposed that the two companies purchase an industrial complex and lease it out, but Cornerstone decided not to pursue that idea because management does not have expertise in industrial properties. Which of the following types of risk response is NOT specifically illustrated in this example?

a) Accepting risk

b) Sharing risk

c) Transferring risk

d) Avoiding risk

Q4. WorldView Inc. is a travel agency specializing in matching environmentally minded travellers around the world with ecotourism opportunities in remote locations. The company recently discovered that its primary Web developer had defrauded the company by revising the code in the e-commerce site and diverting funds from customer payments into the developer's personal bank account. Which of the following best describes what WorldView's board of directors should have done to prevent this fraud?

a) Hire a chief technology officer (CTO) to ensure this type of breach could not have occurred.

b) Ensure that all information technology (IT) functions were outsourced to a reputable IT firm.

c) Not approve the implementation of an e-commerce strategy, as it was not aligned with WorldView's mission and vision.

d) Have a competent committee review management's controls over information systems, and monitor how these were being enforced.

Q5. Rattlesnake Research Ltd. is implementing a new data warehousing system. The data needed for Rattlesnake's research is heavily interconnected, and the entire system is centrally located in Toronto and accessed by researchers across the country through a secure Web portal. Running these types of systems is costly. The data changes almost continuously, and the old system is having difficulty keeping up with the changes. What conversion method is most appropriate for Rattlesnake to use?

a) Parallel

b) Phased

c) Direct

d) Pilot