CMA-Strategic-Financial-Management 100% Pass Guaranteed Download CMA Certification Exam PDF Q&A [Q55-Q73]

Rate this post

CMA-Strategic-Financial-Management 100% Pass Guaranteed Download CMA Certification Exam PDF Q&A

CMA-Strategic-Financial-Management Practice Test Dumps with 100% Passing Guarantee

NEW QUESTION 55
A corporation’s financial analyst has identified four potential protects that ate mutually exclusive. Each protect will produce a constant annual cash flow for years 1 through 4, and have an initial investment at time 0 shown below. If the corporation has a weighted average cost of capital of 10%, which project should be selected?

Protect 1

Protect 2

Protect 3

Protect 4

NEW QUESTION 56
When evaluating a capital Budgeting proposal, an advantage of using the payback method is that Bits process

assesses the liquidity of the project.

considers the time value of money.

incorporates all of the project’s cash inflows and outflows

objectively determines if the proposal should be accepted or rejected.

NEW QUESTION 57
Calculate AMI’s degree of operating leverage. Show your calculations.
Essay
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.

Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.

NEW QUESTION 58
Identify the market structure in which OLI operates and explain how OLi’s pricing is affected by this mantel structure Essay Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country.
It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is €300 per student, and the total fixed cost of the new course is
€300.000 per year OLI spent €200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI’s highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.

NEW QUESTION 59
Custom Ceramics produces two hand-painted items a large bowl and a large platter. Relevant information for each of these items is shown below

The company should produce only bowls because the contribution margin per bowl is higher.

The company should produce only platters because the variable cost per platter is lower

The company should produce only bowls because the sales price per Bowl is higher

The company should produce only platters because the contribution margin per painting hour is higher

NEW QUESTION 60
How many units should be produced and sow it AMI’S target net income is $600,000? Snow your calculations.
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.

Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.

NEW QUESTION 61
In March 20X2, an investor purchased a government bond with a face value of $100 that matures in 30 years.
The issue price was $94 and the bond offered a yield to maturity of 5.6% One year later, the investor sold the bond at a price of S105 after receiving an interest payment of $6. The total return is

5.6%

6.0%

11.7%

18.1%

NEW QUESTION 62
A corporation has $80 million in current assets comprised of $30 million in inventory and $50 million in cash and marketable securities it has current liabilities of $50 million. If the corporation purchases an additional $10 million in inventory with trade credit this would

increase its current ratio and increase its quick ratio

not change its current ratio and decrease its quick ratio

not change its current ratio and not change its quick ratio

decrease its current ratio and decrease its quick ratio

NEW QUESTION 63
Delman inc considering upgrading its manufacturing facility, and it is expected that the new equipment will cost $180,000. The project’s is considering similar to the risk of the firm’s other investments. the after-tax cash inflows attribute to this project are expected to increase by $50,000 every year over the next five years. The firm’s marginal tax rate is 30%, its debt-to-equal ratio (using market values) is 60%, and its pre-tax cost of debt and equity are 8% and 12% respectively. the weighted average cost of capital appropriate for evaluating this project is closest to

8.0%

8.2%

9.6%

10.5%

NEW QUESTION 64
Which one of the following statements regarding working capital management is not correct?

An attempt to minimize carrying costs and shortage costs associated with inventory levels is an objective of working capital management

The cash, inventory accounts payable and accounts receivable components of working capital are constantly changing during the operating cycle

Seasonal demand for me products can cause working capital problems that must De anticipated and managed

Increasing costs associated with the manufacture and sale of products will not impact the short-term management of working capital

NEW QUESTION 65
A company manufactures two products Product X and Product Y, during a joint process Product Y canoe processed further to create Product Z Relevant data are shown below.

Product Y should be processed further because me selling once of Product Z Is higher than Product Y

Product Y should he processed further because an additional S5.000 profit can be achieved by processing further

Product y should not be processed further because an additional S35 000 loss can be achieved by processing further

Product Y should be processed further because an additional $45,000 prof* can be achieved by processing further

NEW QUESTION 66
IF a company does not have a code of conduct, the company most likely

is missing important guidance on ethical decision making

will lack an expressed statement of values regarding ethical behavior

can use its statement of values instead to implement ethics in daily decision making

must find another way to express its ethical principles

NEW QUESTION 67
A furniture retail company uses the LIFO inventory method Due to the nigh inflation rate in me past year, the company’s

current ratio may be overstated

quick ratio may be understated

net income may be understated

quick ratio may be overstated

NEW QUESTION 68
Radal inc. currently has three product lines: stationery computer supplies, and printer cartridges Based on the following information, the company is considering whether to drop the printer cartridge line.

continue the printer cartridge product line to avoid an additional $3.000 decrease in net income

drop the printer cartridge product line as this will result in a $3 000 increase m net income

drop the printer cartridge product line as this will result in a $6,000 increase m net income

continue the printer cartridge product line to avoid an additional $6.000 decrease in net income

NEW QUESTION 69
Calculate QDDs financial leverage ratio show your calculations
Essay
Quality Digital Design (QDD) Inc is a public-traded technology company Selected financial data of QDD for the prior year are as follows

QDD’s stock was trading at $160 per share at the beginning of the yea: and at $176 per share by the end of the year. The company paid dividends of S5 per share. The company “s stock had a beta of 1 4 The stock market provided a total return of 12% last year, well above the 3% risk free rate of return QDD is considering the issuance of $200 million of bonds to fund the repurchase of $200 million of its stock.
QDD is evaluating the bond, including its term structure, maturity, and whether it should be callable obtaining the lowest coupon interest is an important objective of QDD. The CFO has estimated that sales for the current year would remain the same as last year and the new bond would add S12 million in annual interest payments.

NEW QUESTION 70
Explain why facilitating payments can create possible ethical and legal issues tor a company Essay Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country.
It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is €300 per student, and the total fixed cost of the new course is
€300.000 per year OLI spent €200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI’s highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.

NEW QUESTION 71
In an Enterprise Risk Management environment, which one of the following is the best example of risk sharing?

Outsourcing business processes

Self-insuring against loss

Establishing operational limits

Reallocating capital among operating units

NEW QUESTION 72
Studler’s Restaurant is considering a contract to supply the weal senior citizen center with 10,000 meals.
Regular sales at regular prices would be unaffected. The food cost for each meal s S3 Additional costs incurred as a result of the contract would De variable overhead of S 50 and variable selling general and administrative costs of S SO per meal sold. The selling price per meal would be $5, A total of $20,000 in fixed costs would be allocated at $2 per meal. The fixed costs are part of an overall total of $500,000 in annual fixed costs incurred regardless of the contract. What will be the effect on pretax income if Studiers takes the special order?

$10, 000 increase

$10.000 decrease

$20, 000 increase

$20.000 decrease

NEW QUESTION 73
Assuming mere are no other imitations, should AMI accept the one-time order from a financial perspective?
Explain your answer
Essay
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.

Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.