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CMA Part 2: Strategic Financial Management Exam

Last Update 13 hours ago Total Questions : 124

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Question # 4

A company has hired a consultant to propose a way to increase the company ' s revenues. The consultant has evaluated two mutually exclusive projects with me following information provided for each project.

The company uses a discount rate of 9% to evaluate both projects Based on the net present value, the company should invest in

A.

project A only

B.

project B only

C.

project A and project B

D.

neither project

Question # 5

Javier makes hand-looted learner dog collars. The materials cost $10 per collar and the collars are sold for $50 each. Javier sells me collars at a local farmer ' s market mat charges S100 per month for space rental if Javier ' s income tax rate is 30%, how many collars must Javier sell each year to earn $1,000 net income?

A.

29

B.

53

C.

66

D.

263

Question # 6

A capital budgeting analysis involves an initial investment of $500. The expected cash inflow in Year 1 is $300, and the expected cash inflow in Year 2 is $350. Which one of the following equations can get the correct internal rate of return (IRR) of this project?

A.

$500 = $300/(1 + IRR) + $350/(1 + IRR)

B.

$500 = $300/(1 + IRR) + $350/(1 + IRR)2

C.

-$500 = $300 ' (1 + IRR) + 5350/(1 + IRR)2

D.

$0 = $300/(1 + IRR) + $350/11 + IRR)2

Question # 7

Amy Curtin sells used cars of a reliable bona Curtin has no knowledge of me history or any or the specific cars She believes that the brand is reliable, and is considering whether it is acceptable to offer only this general Information rather than specific information regarding me cars when trying to complete each sale The company has always preferred to make the sale and worry about any warranty issues later and there are no legal disclosure requirements in their jurisdiction Curtin considers herself to be an ethical person but she does not want to lose out on any potential sales of vehicles that are most likely in good mechanical condition Which one of the following statements best represents what Curtin should consider related to the meaning of ethics?

A.

Ethics is driven by compliance with a set of regulations or laws

B.

Ethics is about being consistent with the ethical tone set by the organization

C.

Ethics is about the integrity of the decision making process to resolve issues

D.

Ethics is about decisions where the relevant policies are informal and not documented

Question # 8

It there is sufficient capacity to fill the order, which of the following are relevant for a special order decision?

A.

Incremental sales revenue incremental variable cost and incremental fixed cost

B.

Incremental sales revenue, incremental contribution and incremental variable cost

C.

Incremental sales revenue, incremental net income, and incremental variable cost

D.

Incremental fixed cost incremental contribution and incremental variable cost

Question # 9

The best discount rate to the use for evaluate of investment opportunities is the

A.

opportunity cost of capital

B.

risk-free interest rate

C.

average market interest rate

D.

cost of the company ' s debt

Question # 10

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

A.

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

B.

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

C.

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

D.

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

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