IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 1021:

  Which marketing research instrument is based on follow-up questioning?

  A. Articulate interviewing.
  B. Customer prototyping.
  C. Closed-end questions.
  D. Laddering.
  D. Laddering.

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  Explanation

  Laddering entails posing an initial question to a subject and then a series of follow-up questions to determine the individual's ultimate motivation. Its a common psychological research instrument.

• Question 1022:

  According to Japanese researchers, an objective of the marketing program should include

  A. Determining the optimal level of inventory
  B. Intermittent receipt of feedback
  C. The earliest possible implementation of improvements
  D. Treating product defects as a function of the production process
  C. The earliest possible implementation of improvements

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  Explanation

  Japanese writers suggest that the objectives of the marketing process should include continuous receipt of feedback as a basis for better products and marketing efforts, implementing improvements as quickly as feasible, using-in-time inventory systems, minimizing production set-up time and cost, and minimizing product defects.

• Question 1023:

  The Dawson Corporation projects the following for the year

  

  If Dawson Corporation's common stock is expected to trade at a price-earnings ratio of eight, the market price per share (to the nearest dollar) would be

  A. $104
  B. $56
  C. $72
  D. $68
  B. $56

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  Explanation

  Net income is $18,000,000 [($35,000,000 EBIT -- $5,000,000 interest) x (1.0-- .4 tax rate)], and EPS is $7 [($18,000,000 NI -- $4,000,000 preferred dividends) 2,000,000 common shares]. Consequently, the market price is $56 ($7 EPS x 8 PE ratio).

• Question 1024:

  A proposed investment is not expected to have any salvage value at the end of its 5-year life. Because of realistic depreciation practices, the net carrying amount and the salvage value are equal at the end of each year. For present value purposes, cash flows are assumed to occur at the end of each year. The company uses a 12% after-tax target rate of return.

  

  Which statement about the internal rate of return of the investment is true?

  A. The IRR is exactly 12%.
  B. The IRR is over 12%.
  C. The IRR is under 12%.
  D. No information about the IRR can be determined.
  B. The IRR is over 12%.

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  Explanation

• Question 1025:

  The concurrent action of basic competitive force as defined by Porter's model determines?

  A. The long-tem profitability and the competitive intensity of the industry.
  B. The entrance barriers that potential players must face to get into the industry.
  C. The rivalry inside the industry.
  D. The strategy that a firm should follow to achieve its objectives.
  A. The long-tem profitability and the competitive intensity of the industry.

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  Explanation

  Michael E. Porter, a leader in the field of strategic management, has developed a comprehensive model of the structure of industries and competition. One feature is his analysis of the five competitive forces that determine long-term profitability measured by long-term return on investment. This analysis determines the attractiveness of an industry.

• Question 1026:

  The first step in the sales planning process is to

  A. Assemble all the data that are relevant in developing a comprehensive sales plan
  B. Develop management guidelines specific to sales planning, including the sales planning process and planning responsibilities
  C. Prepare a sales forecast consistent with specified forecasting guidelines, including assumptions
  D. Secure management commitment to attain the goals specified in the comprehensive sales plan
  B. Develop management guidelines specific to sales planning, including the sales planning process and planning responsibilities

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  Explanation

  Sales planning is a starting point for many other plans. The resources required, revenues to be earned, and costs to be incurred depend on sales. The sales plan of an operating unit should include as much specific information from that unit's management as possible, but must conform to the strategic plans or corporate management. Thus, top management must provide a context within which operational managers can prepare their plans. Corporate support include economic forecasts, overall market sales forecasts, and capital budgets.

• Question 1027:

  The expected rate of return for the stock of Cornhusker Enterprises is 20%, with a standard deviation of 1 5%.The expected rate of return for the stock of Mustang Associates is 10%, with a standard deviation of 9%.The riskier stock is

  A. Cornhusker because the return is higher.
  B. Cornhusker because the standard deviation is higher.
  C. Mustang because the standard deviation is higher.
  D. Mustang because the coefficient of variation is higher.
  D. Mustang because the coefficient of variation is higher.

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  Explanation

• Question 1028:

  Market-skimming pacing strategies are saprophyte when

  A. No buyers want the product at a high place
  B. The costs of producing a small volume are low.
  C. Competitors can easily enter the market.
  D. The product is of poor quality.
  B. The costs of producing a small volume are low.

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  Explanation

  Market-skimming pricing is used when a new product is introduced at the highest price possible given the benefits of the product. For market skimming to work, the product must appear to be worth its price, the costs of producing a small volume cannot be so high that they eliminate the advantage of charging more, and competitors cannot enter the market and undercut the price.

• Question 1029:

  The use of a decision tree is appropriate for decision making under conditions of

  A. Uncertainty and risk.
  B. Uncertainly and subjective likelihoods.
  C. Certainty'.
  D. Risk.
  D. Risk.

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  Explanation

  Decision tree analysis is used when various options of certainty', their consequences, and the probabilities of those consequences can be ascertained with a high degree of confidence. Under conditions of uncertainty', however, probabilities are unknown.

• Question 1030:

  Merkle, Inc. has a temporary need for funds. Management is trying to decide between not taking discounts from one of their three biggest suppliers, or a 14. 75% per annum renewable discount loan from its bank for 3 months. The suppliers' terms are as follows:

  

  Using a 360-day year, the cheapest source of short-term financing in this situation is ,/16

  A. The bank.
  B. Fort Co
  C. Riley Manufacturing Co.
  D. Shad, Inc.
  D. Shad, Inc.

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  Explanation