ENSC201 TEST#2 - SAMPLE QUESTIONS

Sample Questions for Test 2 - Nov 28, 2007

(These are samples - typical of the type that would be asked on the in-class written test. Point-form, brief, answers are encouraged.)

FROM TEST #1:

  1. Using the 4P's of marketing, how would you attempt to increase the sales of your (team project) product without adversely affecting your bottom line (i.e. without incurring huge costs)
  2. Why is a sales "plan" better than a "forecast". What constitutes a "good" Plan? (i.e. one whose numbers you have confidence in.)
  3. Your company plans to sell a very new, innovative product for which there is no similar product presently on the market. How would you determine the pricing for this product?
  4. What is "marketing". Give an example.
  5. Most businesses are legally incorporated entities. What does it mean to incorporate? What are a few advantages and disadvantages to incorporation? How would you decide on where to incorporate?
  6. What is an RRSP? Why should you have one?
  7. How much tax do companies located in Canada pay?
  8. What determines the exchange rate (i.e. price of the C$ in US$)?
  9. What are some advantages in working with team members with whom you are not overly familiar?
  10. What's an IPO? Why aren't many being done at the present time?
  11. What is a stock option?
  12. What is a Patent? How do you get one? What does it cost to get one? How long does it last? Criteria(3)? What's a Provisional Patent Application?
  13. Are patents a good thing?
  14. Why should engineers (and companies) be interested in patents (Todd's comment).
  15. What is the main difference in how the US grants patents as compared to other countries?
  16. What can invalidate an issued patent? What constitutes infringement of a patent?
  17. What's your favourite technology (public company) stock? What's its market cap? (and why is is so high or low?)
  18. What is the function of the BC Securities Commission?

MORE ADDED FOR TEST #2:

  1. Explain the difference between accretive and dilutive.
  2. Using the Product Life Cycle concept, what's the best time to introduce new products (explain).
  3. Your business plan projects monthly profits & losses over a 10 year period. What discount rate would an angel investor use to determine the value of your company today? Why?
  4. Explain the difference between an investment alternative being "economically attractive" or "financially attractive".
  5. What is the small business tax rate in B.C.?
  6. Chester Carlson invented Xerography. Surprisingly, no one else was working on copier technology at that time. Indeed, no one appeared interested in his technology. Why not?(refer to the video on Xerography - assuming it was/will be screened in class)
  7. What do Apple and Macdonald's have in common with each other (other than they both make MACs)? (ref: in-class video)

  8. SFU just floated a $150 million 40-year bond issue ($100 bonds) at 5.17% to institutional investors. If, a month later, interest rates drop by 0.5%, what will these bonds be trading at? How can the bond holders profit from this?

  9. 2. Your B.C. based CCPC has a startup (Year 0)  balance sheet as shown below. During year #1, you ship $250,000 in product. Your expenses are $50,000 for materials, $100,000 for labor, and $10,000 misc. operating costs. Selling and administrative expenses are $15,000, marketing and sales costs are $20,000 and R&D expenses are $30,000 (you claim SRED on the entire amount). Your accounts receivable balance at the end of year #1 is $60,000. Inventory and A/P are unchanged. Draw up a P&L statement and Balance Sheet for Year #1.
    (Notes payables are for equipment purchases at 0% financing due in 2003. Round $ to nearest $1000.) State any other assumptions you make.

  10. What is "book value"? Give an example.

  11. Your company buys a patent for $1 million by issuing 1 million shares. How would you account for this on the financial statements?

  12. If the nominal interest rate is 12% but compounding is monthly, what's the effective interest rate?

  13. What is a “provisional patent”? What’s the difference between a provisional patent application and a regular patent application?

  14. SFU just floated a $150 million 40-year bond issue ($100 bonds) at 5.17% to institutional investors. If, a month later, interest rates drop by 0.5%, what will these bonds be trading at? How can the bond holders profit from this?

  15. What are the four stages (describe each) in a product (or business) life cycle?

(There may be more sample questions added...check back now and then!)

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Last Updated: 16Nov2007