IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 141:

  A service firm may improve productivity by

  A. Creating a product that reduces the need for a service
  B. Increasing the quality of a given quantity of service
  C. Avoiding the trap of treating the service as a manufacturing process
  D. Performing more tasks using highly trained employees
  A. Creating a product that reduces the need for a service

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  Explanation

  Service firms may improve productivity by. (1) hiring and training better employees;(2) changing the quantity-quality tradeoff ratio;(3) treating the performance of the service as a manufacturing process;(4) creating a product (for example, permanent press clothing) that reduces the need for a service; (5) performing more substitute services (e.g., allowing a nurse practitioner to do some physician's work); (6) giving customers reasons to provide labor (e.g., ATMs); and (7) using technology effectively and efficiently.

• Question 142:

  company wants to open a new store in one of three nearby shopping malls. In Mall A, the rent will be $300,000 per year. In 4alI B, the rent will be 4% of gross revenues. In Mall C, the rent will be $150,000 per year pIus 3% of gross revenues Assume hat revenues and all other elements under consideration are the same for all three malls. If the company expects revenues to be $ 10.000.000 per year. which mall should be chosen?

  A. Mall A,
  B. MaII B.
  C. Mall C.
  D. The company will be indifferent between two of the choices.
  C. Mall C.

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  Explanation

  It the company expects revenues to be $10,000,000 per year. the calculation is as follows. Mall A. $300.000 Mall B: $10,000,000 x 4% = $400,000 Mall C: $10,000.000 x 3% $300,000 + $150.000 $450,000 Thus, Mall A is preferable

• Question 143:

  Which of the following activities would likely not be a consideration in strategic planning?

  A. New product development.
  B. Capital budgeting
  C. Mergers
  D. Materials procurement.
  D. Materials procurement.

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  Explanation

  Strategic, or long-term, planning covers long periods of time and is concerned with matters such as new product development, capital budgeting; major financing; and mergers, acquisitions, and divestitures. Operational matters, such as material procurement, are not a part of strategic planning, but they are a consideration in short- term, or operational, planning.

• Question 144:

  A cost that may be eliminated by performing an activity more efficiently is a(n)

  A. Opportunity cost.
  B. Avoidable cost.
  C. Cost driver.
  D. Indirect cost.
  B. Avoidable cost.

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  Explanation

  Avoidable costs are those that may be eliminated by not engaging in an activity or by performing it more efficiently.

• Question 145:

  A U.S. company currently has domestic operations only. It is considering an equal-size investment in either Canada or Britain. The data on expected rate of return and the risk associated with each of these proposed investments are given below.

  

  The mean return on the company's current, domestic only, business is 20% with a standard deviation of 15%. Using the above data and the correlation coefficients, the company calculated the following portfolio risk and return (based on a ratio of 50% U.S. domestic operations and 50% international operations).

  

  The company plans to select the optimal combination of countries based on risk and return for the domestic and international investments taken together. Because the company is new to the international business environment, it is relatively risk averse. Based on the above data, which one of the following alternatives provides the best risk- adjusted return to the firm?

  A. Undertake the British investment
  B. Undertake the Canadian investment
  C. Do not undertake either investment.
  D. Unable to determine based on data given.
  A. Undertake the British investment

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  Explanation

  A risk-averse company will select the investment with the lesser risk. Thus, by choosing to invest in Britain, the overall rate of return will increase from 20% to 21%, and risk, based on the standard deviation, will decline from 15% to 3%. This gives a better return per unit of risk as compared to the Canadian investment.

• Question 146:

  Online analytical processing allows a user to

  A. Discover hidden relationships in data.
  B. Have multiple perspectives of the same data.
  C. Access the data across the Internet.
  D. Discover sequences of events in the data.
  B. Have multiple perspectives of the same data.

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  Explanation

  A firm with a decision-support system (DSS) may exploit advanced database technology to analyze vast amounts of data. One approach is online analytical processing, or multidimensional data analysis. It allows a user to have multiple perspectives of the same data. Another approach is data mining. It allows a user to discover hidden relationships in the data, such as associations (links to a given event), sequences of events, classifications (descriptions of the group to which an item belongs, or clusters (new groupings not previously known). Consequently, a 1firm might detect trends or underserved customer market segments.

• Question 147:

  Stock J has a beta of 1.2 and an expected return of 15. 6%, and stock K has a beta of 0.8 and an expected return of 12. 4%. What is the expected return on the market and the risk- free rate of return, consistent with the capital asset pricing model?

  A. Market is 14%; risk-free is 6%
  B. Market is 12. 4%; risk-free is 0%
  C. Market is 14%; risk-free is 4%
  D. Market is 14%; risk-free is 1.6%
  A. Market is 14%; risk-free is 6%

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  Explanation

• Question 148:

  A firm sold the same product in many foreign countries but changed the ad copy to allow for language and cultural differences. According to Keegan's model of adaptation strategies, the firm adopted a strategy of

  A. Product adaptation.
  B. Communication adaptation.
  C. Dual adaptation.
  D. Straight extension.
  B. Communication adaptation.

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  Explanation

  Communication adaptation is a strategy that does not change the products, but advertising and marketing campaigns are changed to reflect the local culture and beliefs. For example, a firm may use one message but with changes in language, name, and colors. It may use a consistent theme but change the ad copy in each market. Another option is for a firm to devise a group of ads from which each market may choose the most effective. Still 1another option is to develop promotion campaigns locally,

• Question 149:

  How many surge protectors (rounded to the nearest hundred) must Bruell Electronics sell at a selling price of $14 per unit to gain $30 p000 additional income before taxes?

  A. 10700 units.
  B. 12100 units.
  C. 20,000 units.
  D. 25,000 units.
  D. 25,000 units.

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  Explanation

• Question 150:

  Gray market activity is in essence a form of arbitrage. To prevent this activity by their distributors, multinational firms

  I. Raise prices charged to lower-cost distributors.

  II.

  Police their distributors Ill. Change the product.

  A. I only
  B. I and II only
  C. II and Ill only
  D. I, II and Ill
  D. I, II and Ill

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  Explanation

  In a gray market, products imported from one country to another are sold by persons trying to make a profit from the difference in retail prices between the two countries. These activities clearly lower the profits in some markets of the multinational firm that was the initial seller. One response is to monitor the practices of distributors and retaliate if necessary. A second response is to charge higher prices to the low-cost distributors to reduce their incentives to participate in a gray market. A third response is to differentiate products sold in different countries, e.g., by adapting the product or offering distinct service features.