DBA Doctor of Business Administration/Business Management 3

Question 1

Which financial metric measures how efficiently a company converts sales into actual cash flow?

Accepted Answer

Cash conversion cycle (CCC)

Answer

The cash conversion cycle measures days to convert inventory and receivables into cash, indicating operational liquidity efficiency.

Question 2

In agency theory, the 'principal-agent problem' arises primarily because:

Accepted Answer

Agents may pursue self-interest that diverges from principals' objectives

Answer

Information asymmetry and differing incentives between principals (owners) and agents (managers) create misalignment and monitoring costs.

Question 3

The 'resource-based view' (RBV) of competitive advantage argues that sustained competitive advantage stems from:

Accepted Answer

Valuable, rare, inimitable, and non-substitutable internal resources

Answer

RBV, associated with Barney, holds that VRIN resources — valuable, rare, inimitable, non-substitutable — are the foundation of sustainable competitive advantage.

Question 4

In change management, Kotter's 8-step model begins with which critical first step?

Accepted Answer

Establishing a sense of urgency

Answer

Kotter's model starts with creating urgency by helping stakeholders see the need for change and the risks of inaction.

Question 5

Which capital budgeting technique accounts for the time value of money AND provides a dollar-value measure of value created?

Accepted Answer

Net present value (NPV)

Answer

NPV discounts future cash flows to present value and subtracts the initial investment, directly measuring dollar-value wealth creation.

DBA - Doctor of Business Administration Practice Test

DBA - Doctor of Business Administration Practice Test

DBA Doctor of Business Administration/Business Management 3