Free CMA-STRATEGIC-FINANCIAL-MANAGEMENT Exam Dumps PDF Preview

Question 1

Single choice

On January 1, 2008 the exchange rate between the U S dollar (S) and Indian Rupee (Rs) was $t = Rs 39.
2676. On January 1, 2009 the rate was Rs 1 = $0,0205.
Based only on the relative currency appreciation or depreciation, which country's exports would likely have increased?

A
India
B
U.S
C
Neither India or U.S
D
Both India and U.S

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Correct answerB

Question 2

Single choice

L&H Sports owns and operates several stadiums used for baseball and soccer games Management is considering installing machines that would be used to roast peanuts on the premises. This equipment would allow L&H to sell freshly roasted peanuts rather than the pre-roasted peanuts that are currently sold Marketing studies suggest that this feature would increase peanut sales.

The roasters can be purchased in several sizes, and the annual rental fees and operating costs vary with the size of the roaster Information about the roasters is shown below.

L&H currently sells pre-roasted peanuts for $0 60 pet bag. Management plans to sell the freshly roasted peanuts for a higher price but at no more than a 10% increase. The demand for freshly roasted peanuts is estimated to be 250, 000 bags pet year.

Which roaster should L&H purchase to maximize its profit?

A
Economy
B
Regular
C
Super

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Correct answerB

Question 3

Single choice

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

A
is missing important guidance on ethical decision making
B
will lack an expressed statement of values regarding ethical behavior
C
can use its statement of values instead to implement ethics in daily decision making
D
must find another way to express its ethical principles

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Correct answerA

Question 4

Single choice

Plenary Inc specializes in overnight package delivery. Total packages delivered last year were 10 000.000. and this quantity is expected to remain unchanged in the coming year. Unit contribution margin is $4,50 and total fixed costs are S40.000,000.
The firm's 300 delivery truck drivers are seeking a S10 000 raise in annual salary In addition to a current base salary of $45 000 per year, the drivers receive a commission of $0 50 per package delivered If the firm grants the $10,000 salary increase to each driver and seeks to maintain the same level of pre-tax operating profit what is the maximum amount of commission the firm can pay its drivers per package delivered?

A
$0.0
B
$0.20
C
$0.30
D
$0.35

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Correct answerB

Question 5

Single choice

Harris Wholesale Grocery Company has gross sales per year of $7 million and grants credit terms to its customers of 2/5. net 15 As a result.
60% of customers pay on the discount date 20% pay on the net due date, and 20% pay on average 10 days after the due date Assuming that sales are uniform throughout the year and using a 360-day year In the calculation what is the approximate annual amount of discount that Hams customers are allowed to take?

A
$28,000
B
$84,000
C
$140, 000
D
$210,000

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Correct answerC

Question 6

Single choice

An organization s sol of values and code or ethics is an important consideration in human resource decisions for each of the following reasons except

A
employees not motivated to adhere to a set of values may impact relationships wan other entities doing Business e organization.
B
failure to address the alignment or individual values and ethics with organizational expectations may have a negative impact on performance.
C
lack of a communicated set of values may create confusion and conflict among employees
D
an organization may not have a legal right to discharge a dishonest employee if such a code is not communicated

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Correct answerD

Question 7

Lab simulation

Simulation

Identify and explain two risks that Guda may face after it acquires Blue Moon.

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.

1. Sales: $2,000,000
2. Variable manufacturing costs: $1,000,000
3. Fixed manufacturing costs: $500,000
4. Operating income: $500,000
5. Income taxes (40%): $200,000
6. Net income: $300,000

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.

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Integration and synergy risk: After the takeover, Blue Moon's systems, processes, and culture must be integrated with Guda's. If IT platforms, supply chains, or sales teams don't mesh-or if key Blue Moon managers and engineers leave-expected cost savings and cross-selling synergies may not materialize.
This can depress margins and delay the deal's value creation.

Financial/leverage risk: If Guda finances the acquisition with significant debt or overpays for Blue Moon, interest expense and required cash flows rise. A heavier capital structure can weaken interest coverage, constrain future investment, and increase vulnerability to downturns; if Blue Moon underperforms relative
to the acquisition model, goodwill impairment and covenant pressure may follow.

Question 8

Single choice

A company had an operating cycle of 110 days, a cash cycle of 40 days, and an accounts receivable period of so days. The company s inventory period and accounts payable period are

A
inventory period = 50 days ana accounts payable period - 150 flays
B
inventory period = 70 flays and accounts payable period = 50 flays
C
inventory period = 10 days and accounts payable period = 50 days
D
inventory period = 50 days and accounts payable period = 70 days

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Correct answerD

Question 9

Single choice

A company with idle capacity has been contacted by a new customer to supply 10,000 units of its products for a special batch order its costs are as follows.

The company's normal soling price is SI00 per unit but the customer is wiling to pay only S70 pet unit Should the company accept the special order''

A
Yes, because the special order will increase operating profit by S100 000
B
Yes, because the special order will increase operating profit by S250 000
C
No, because the special order will reduce operating profit by S50 000
D
No, because the special order will reduce operating profit by $250 000

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Correct answerC

Question 10

Single choice

Management is responsible for identifying potential events mat could represent opportunities or threats.

Which one of the following is not a viable event identification technique?

A
Facilitated workshops and interviews
B
Loss event data methodologies
C
Review of control categories
D
Process flow analysis

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Correct answerC

Question 11

Lab simulation

Simulation

Explain one reason each Tot and against issuing bonds with a call feature

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

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Reason in favor of issuing callable bonds: A call feature gives QDD flexibility to refinance if interest rates fall or if the firm's credit rating improves. By calling and reissuing bonds at a lower coupon, QDD can reduce its long-term financing costs and improve profitability.

Reason against issuing callable bonds:
Because the call option favors the issuer and disadvantages investors, investors demand compensation in the form of a higher coupon rate on callable bonds relative to similar non-callable bonds. This increases QDD's initial cost of debt and reduces the benefit of the repurchase plan in the short term.

Question 12

Single choice

A group of nations is considering me formation of a cartel associated with the manufacture and distribution of a product that they each export.

Which one of the following outcomes would not be consistent with me formation of a carter?

A
An increase in the output of the manufactured product
B
An increase in the selling price of the manufactured product
C
An increase m the net profits for each of the individual cartel members
D
A selling price where marginal revenue equals marginal cost

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Correct answerA

Question 13

Single choice

Essentials inc. operates two segments. Segment A and Segment B information about the revenues and costs for Essentials tot the previous year (by segment) is shown below

The above analysis shows that Segment A is not profitable if Segment A is dropped, the revenues associated with the account will be lost and the related variable costs win be eliminated.
Also, the space freed by this product line will be rented for $40.000. The operating profit (loss) after dropping Segment A will be

A
($35,000)
B
$5,000
C
$50.000
D
$90.000

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Correct answerB

Question 14

Single choice

Using the dividend discount model, an analyst determines mat Beverly Company's equity is worth $80 per share.
Beverly Company's required rate of return is 15% and the current risk-free rate is 5% assuming a 0% long-term growth rate, what is Beverly's estimated future annual dividend?

A
$16.00
B
$12.00
C
$8.00
D
$1.20

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Correct answerC

Question 15

Single choice

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.

A
Product Y should be processed further because me selling once of Product Z Is higher than Product Y
B
Product Y should he processed further because an additional S5.000 profit can be achieved by processing further
C
Product y should not be processed further because an additional S35 000 loss can be achieved by
processing further
D
Product Y should be processed further because an additional $45,000 prof* can be achieved by processing further

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Correct answerB

Question 16

Single choice

An accountant is employed in the financial reporting department of a publicly-traded company. The company s compensation plan includes a year-end bonus based on the entity's financial performance and stock option rewards based on individual performance Using iMAs Statement of Ethical Professional Practice, identify the ethical Issues, if any, that may Be presented by this company s compensation plan.

A
The plan could threaten the accountant's integrity
B
The pan could threaten the accountant s competence
C
The plan could threaten the accountant s credibility
D
No significant potential threats are presented by the plan

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Correct answerA

Question 17

Single choice

if a company increases the price of its product from $3010 $35, demand would decrease from 30, 000 units to 20.000 units.

What is the price elasticity of demand for the company using the midpoint formula?

A
0.4
B
0.5
C
2.0
D
2.7

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Correct answerD

Question 18

Lab simulation

Simulation

According to the IMA Statement of Ethical Professional Practice, identify and explain the standard(s) that Matthew would violate if he chooses not to report the issue regarding the accounting manager.

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.

1. Sales: $2,000,000
2. Variable manufacturing costs: $1,000,000
3. Fixed manufacturing costs: $500,000
4. Operating income: $500,000
5. Income taxes (40%): $200,000
6. Net income: $300,000

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.

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If Matthew chooses not to report the issue regarding the accounting manager, he would be violating several standards in the IMA Statement of Ethical Professional Practice:

1. Integrity - By withholding information, Matthew would fail to mitigate conflicts of interest and would allow unethical or potentially fraudulent behavior to continue unchecked. Integrity requires members to avoid activities that could discredit the profession.
2. Credibility - Matthew would not be communicating information fairly and objectively. Failing to disclose the issue prevents stakeholders from receiving accurate and timely information needed for sound decision-making.
3. Competence - This standard requires members to perform duties in accordance with relevant laws, regulations, and technical standards. By ignoring the issue, Matthew would neglect his professional responsibility to apply proper accounting practices.
4. Confidentiality - While confidentiality requires safeguarding information, it also requires disclosure when legally obligated. By not reporting the accounting manager's issue internally, Matthew misuses confidentiality as an excuse to conceal wrongdoing.

If Matthew does not report the accounting manager's issue, he would violate the integrity and credibility standards most directly, and potentially also fail in competence and confidentiality duties. This would undermine professional ethics, mislead stakeholders, and expose AMI to legal and reputational risks.

Question 19

Single choice

A company can by identical raw materials from four suppliers. Each supplier offers a different term of sale.

Which one of the following terms of sale has the highest effective annual interest rate if the company does not take the cash discount?

A
1/10, net 90
B
1/30, net 90
C
1/10, net 45
D
1/30 net 45

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Correct answerD

Free CMA-STRATEGIC-FINANCIAL-MANAGEMENT Exam Dumps Preview

CMA Part 2: Strategic Financial Management

PREVIEW CONTENTS · 2 VOLUMES

QUESTION 1

QUESTION 2

QUESTION 3

QUESTION 4

QUESTION 5

QUESTION 6

QUESTION 7

QUESTION 8

QUESTION 9

QUESTION 10

QUESTION 11

QUESTION 12

QUESTION 13

QUESTION 14

QUESTION 15

QUESTION 16

QUESTION 17

QUESTION 18

QUESTION 19

VOL	TYPE	QUESTIONS
1	Single choice	16
2	Lab simulation	3