Updated Sep-2021 Test Engine to Practice Test for CORe Exam Questions and Answers!
HBX CORe Final Examination Certification Sample Questions and Practice Exam
NEW QUESTION 80
A company reported income before taxes of $800,000 for Year 2. The company did not have temporary taxable differences at the end of Year 1 but reported a net deferred tax asset of $6,000 for Year 2. The effective income tax rate is 30 percent. What amount should the company pay as income tax for Year 2?
- A. $246,000
- B. $240,000
- C. $241,800
- D. $234,000
Answer: A
NEW QUESTION 81
Which of the following graphs shows a negative relationship between the two variables?
A)
B)
C)
D)
- A. Option A
- B. Option D
- C. Option B
- D. Option C
Answer: A
NEW QUESTION 82
The management of Company A, a consumer products company, is forecasting revenue as part of their internal budget exercise. Which of the following factors is of the LEAST value in arriving at the forecast revenue amount?
- A. The revenue level needed to exceed break-even
- B. The market strength for the company's products
- C. Overall macroeconomic conditions
- D. Competitive pressures and new products
Answer: A
NEW QUESTION 83
A hurricane has recently destroyed a major oil supplier's oil rig located in the Gulf of Mexico. If price elasticity of demand for oil is 0, what effect would the hurricane have on the short-term market for oil?
- A. Consumers would reduce their oil consumption.
- B. Other oil producers would decrease their prices.
- C. The oil producer would be willing to supply less oil at any price.
- D. New producers would enter the market to provide the oil that was lost.
Answer: C
NEW QUESTION 84
A company purchased a piece of equipment for $100,000 on Jan. 1, 2012. The estimated useful life is 10 years with no salvage value at the end of the10-year period. The company used the straight-line method to depreciate this equipment in 2012. However, in 2013, the company decided to change the depreciation method to the double-declining method. What effect did this change in depreciation methods have on the income statement for 2013 and the balance sheet as of Dec. 31, 2013?
- A. The total assets increased, and the net income increased.
- B. The total assets increased, and the net income decreased.
- C. The total assets decreased, and the net income decreased.
- D. The total assets decreased, and the net income increased.
Answer: C
NEW QUESTION 85
The electric car market is expected to grow significantly over the next few years due to new technologies making electric cars more affordable. Which of the following types of companies would MOST likely benefit from the substitution of electric cars for traditional vehicles?
- A. Public transportation
- B. Airlines
- C. Auto mechanics
- D. Oil suppliers
Answer: B
NEW QUESTION 86
What are the items that companies using the International Financial Reporting Standards (IFRS) might place in different sections within the statement of cash flows compared to those reporting under US Generally Accepted Accounting Principles (GAAP)?
- A. Capital expenditures and depreciation
- B. Loan payments and stock issued
- C. Interest and dividends
- D. Inventory and net income changes
Answer: C
NEW QUESTION 87
A chain of coffee stores recently released a new product priced at $3.00. After a few weeks of sales data, management noticed that the new product sold out in a majority of its stores. Which of the following strategies should management use to determine an ideal price?
- A. Adjust the price for the product until it no longer sells out anywhere
- B. Survey customers who recently purchased the product
- C. Gradually increase the price until profits begin to fall
- D. Maintain current prices and increase supply of the product
Answer: C
NEW QUESTION 88
In order to predict an employee's probability of success at work, a company requires employees to complete a test that measures Intelligence Quotient (IQ) and Emotional Intelligence Quotient (EQ). A new manager at the company believes that the probability of being successful at work is closely related to an employee's Reputation Quotient (RQ).
Based on the two regressions outputs below, does adding the RQ component help forecast the probability of being successful at work?
- A. Yes, the R2 increased from 0.8504 to 0.8751 when RQ was added.
- B. Yes, the standard error decreased from 0.11 to 0.10 when RQ was added.
- C. Yes, the Adjusted R2 increased from 0.8441 to 0.8670 when RQ was added.
- D. No, the coefficient of RQ is close to 0.
Answer: C
NEW QUESTION 89
A company is considering a project to develop a nascent technology to harness energy from ocean waves but wants to determine its economic viability. This 10-year project will cost the company $10 million in research and development costs and $25 million to build infrastructure. Each megawatt of energy costs $60 to produce, but the government offers a subsidy of $5 permegawatt. The price per megawatt of energy will be $56 for the next five years, and the company expects to produce 1 million megawatts per year. Ignoring the time value of money (i.e. assuming cash flows across different years are directly comparable), if costs, output, and subsidies remain constant, what will the market price of a megawatt of energy need to be in years six through ten to make this project economically viable?
- A. $71
- B. $59
- C. $56
- D. $61
Answer: D
NEW QUESTION 90
A criminologist wants to investigate the relationship between income, gender composition, and the number of violent crimes. The criminologist collects data from the 50 U.S. states on the number of violent crimes committed in 2012, the percentage of the population that is male, andper capita income in each state. Regression results and residual plots for the regression are provided below.
The criminologist find that the correlation between the percent of the population that is male and per capita income is -0.053. Aside from the fact that neither slope coefficient is statistically significant, what other regression issue is MOST likely occurring in this model?
- A. Heteroskedasticity
- B. Lagged variables
- C. Homoskedasticity
- D. Multicollinearity
Answer: A
NEW QUESTION 91
The government decides to set a price ceiling on corn. The price ceiling is set 10% above the equilibrium price. What would be the result of this government action?
- A. The price ceiling would have no effect on the market.
- B. There would be a shortage of corn.
- C. Consumer surplus would increase.
- D. There would be a surplus of corn.
Answer: A
NEW QUESTION 92
A stockbroker wishes to examine the relationship between merger failures and stock prices. For 30 days, data were collected for closing stock prices each day and the number of merger failures announced that day. After reviewing the data, the stockbroker believes that merger failures affect stock market prices for more than one day. Which of the following measures would help the stockbroker incorporate that effect into the regression model?
- A. Include dummy variables
- B. Include lagged variables
- C. Introduce a variable that is collinear with number of news reports on merger failure
- D. Include other independent variables, such as the number of news reports on dividend released each day
Answer: B
NEW QUESTION 93
The media discovers that an automobile manufacturer has been secretly polluting the rivers near its plants. After this discovery, the government imposes a punitive fee on the company, and a group of consumers begins to boycott the manufacturer. What will be the total effect of these simultaneous events?
- A. The equilibrium quantity of cars purchased from this manufacturer will decrease.
- B. The equilibrium price of cars from this manufacturer will increase.
- C. The equilibrium price of cars from this manufacturer will decrease.
- D. The change in equilibrium quantity of cars purchased from this manufacturer cannot be determined.
Answer: A
NEW QUESTION 94
A recent recession greatly reduced income for many people. Which of the following goods likely saw the greatest reduction in willingness to pay (WTP)? (Select all that apply.)
- A. Computers
- B. Vacations
- C. Charitable donations
- D. Clothing
- E. Healthcare
Answer: B,C
NEW QUESTION 95
A high school teacher believes that the poverty rate in each U.S. state can be explained by the percentage of the population who do not have a high school diploma or equivalent. The teacher collects data from each of the 50 U.S. states; a portion of the data is given below.
Which of the following Excel dialog boxes correctly runs the regression described? A)
B)
C)
D)
- A. Option A
- B. Option D
- C. Option B
- D. Option C
Answer: A
NEW QUESTION 96
In determining Earnings before Interest and Taxes (EBIT), an analyst needs to make what adjustments to the net income amount with regards to income statement items? (Select all that apply.)
- A. Add taxes
- B. Add interest expense
- C. Deduct capital expenditures
- D. Deduct change in net working capital
- E. Add depreciation
Answer: A,B
NEW QUESTION 97
Below is a partial regression output table showing the relationship between a team's point differential and its winning percentage.(Point differential is defined as the difference between the average number of points a team scores per game and the average number of points per game scored against that team.)
Assuming a significance level of 0.01, which of the following p-values would indicate a significant relationship between the two variables?
- A. 0.0500
- B. 0.1000
- C. 0.9999
- D. 0.0005
Answer: D
NEW QUESTION 98
A group of season ticket holders wants to forecast attendance at National Football League (NFL) games for the upcoming season. One ticket holder argues that using the population of the United States as the only independent variable would explain as much as using both the United States population and the percent change in disposable income (per capita) as independent variables. Another ticket holder argues that using the percent change in disposable income (per capita) asthe only independent variable would provide the most accurate forecast. Listed below are the Adjusted R2 values for three regression models. Based on these values, and keeping in mind that the ticket holders are only concerned about forecasting, what is the correct conclusion?
- NFL Attendance vs. US Population and Percent Change in Disposable Income.
Adjusted R2= 0.8964 - NFL Attendance vs. US Population: Adjusted R2= 0.8609 - NFL Attendance vs. Percent Change in Disposable Income. Adjusted R2= -0.0244
- A. There is not any information regarding the p-values of the independent variables, so it is impossible to determine the explanatory power of the regression models.
- B. The Adjusted R2 of NFL Attendance vs. Percent Change in Disposable Income is negative, so Percent Change in Disposable Income should be excluded from any regression model.
- C. The Adjusted R2 of NFL Attendance vs. US Population and Percent Change in Disposable Income is higher than that of either single variable regression model, so both US Population and Percent Change in Disposable Income should be included in the regression model.
- D. The Adjusted R2 of NFL Attendance vs. US Population is higher than that of NFL Attendance vs. Percent Change in Disposable Income, so US Population should be the only independent variable in the regression model.
Answer: C
NEW QUESTION 99
A chain of grocery stores operates in two neighboring towns. The store in one of the towns charges five percent more than the other store for the same products. How can the company charge different prices and remain competitive?
- A. The grocery chain pays higher rent at the store where it charges higher prices.
- B. Delivery of produce to the expensive store costs more than to the cheaper store.
- C. Shoppers living near the expensive store are unwilling to drive farther for lower prices.
- D. The grocery chain has no substitutes in either town.
Answer: C
NEW QUESTION 100
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. Landlords are maximizing profits.
- C. There is a price ceiling on apartment rental prices.
- D. The city is experiencing an economic recession.
Answer: C
NEW QUESTION 101
A company's 2013 year-end balance sheet included the following:
The company's net cash from operating activities on its 2013 statement of cash flows is $200,000. Current year depreciation expense is $25,000. What amount should the company report as net income for 2013?
- A. $170,000
- B. $130,000
- C. $230,000
- D. $175,000
Answer: A
NEW QUESTION 102
A pharmaceutical company is developing a drug that aims to reduce the recovery time (in days) for a particular illness. To test the effect, the company gives 200 randomly selected patients a placebo and 200 randomly selected patients the new drug. The findings from the study are provided below.
Based on this output and a confidence level of 95%, which of the following options would be considered correct?
- A. The researchers would not reject the null hypothesis. Furthermore, they would suspend production of the new drug, because there is no evidence that it significantly lowers recovery time.
- B. The researchers would not reject the null hypothesis. Furthermore, they would continue production of the new drug, because there is evidence that it significantly lowers recovery time.
- C. The researchers would reject the null hypothesis. Furthermore, they would suspend production of the new drug, because there is no evidence that it significantly lowers recovery time.
- D. The researchers would reject the null hypothesis. Furthermore, they would continue production of the new drug, because there is evidence that it significantly lowers recovery time.
Answer: A
NEW QUESTION 103
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