IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 441:

  In calculating diluted earnings per share when a company has convertible bonds outstanding, the number of common shares outstanding must be to adjust for the conversion feature of the bonds, and the net income must be by the amount of interest expense on the bonds, net of tax List A List B

  A. Increased Increased
  B. Increased . Decreased
  C. Decreased Increased
  D. Decreased Decreased
  A. Increased Increased

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  Explanation

  The weighted-average number of shares outstanding must be increased to reflect the shares into which the bonds could be converted. Also, the effect of the bond interest on net income must be eliminated. In this way, earnings per share is calculated as if the bonds had been converted into common shares as of the start of the year.

• Question 442:

  The use of devolves to either hedge or speculate rhesus in

  A. Increased risk regardless of motives
  B. Decreased risk regardless of motive.
  C. Offsetting risk when hedging and increased ask when speculating.
  D. Offsetting risk when speculating and increased risk when hedging.
  C. Offsetting risk when hedging and increased ask when speculating.

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  Explanation

  Derivatives, including options and futures, are contracts between the parties who contract Unlike stocks and bonds, they are not claims on business assets A futures contract is entered into as either a speculation or a hedge Speculation aardwolves the assumption of risk in the hope of gaining from price movements Hedging is the process of using offsetting commitments to minimize or avoid the impact of adverse price movements.

• Question 443:

  Bell co.changed from a traditional manufacturing philosophy to a just-in-time philosophy.what are the expected effects of this change on bell's inventory turnover and inventory as a percentage of total assets reported on bell's balance sheet?

  

  A. Decrease Decrease
  B. Decrease Increase
  C. Increase Decrease
  D. Increase Increase
  C. Increase Decrease

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  Explanation

  A JIT system is intended to minimize inventory.inventory should be delivered or produced just in time to be used.Thus ,JIT increases inventory turnover(cost of sales+average inventory)and decreases inventory as a percentage of total assets.

• Question 444:

  The breakeven point (rounded to the nearest dollar) for Barnes Corporation for the current year is

  A. $148,341
  B. $636,364
  C. $729,730
  D. $181,818
  B. $636,364

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  Explanation

  Fixed costs total $350,000. Variable costs total $675,000. Given sales of $1 1500,000, the contribution margin is $825,000 ($1 ,500,000 -- $675,000). Thus, the contribution margin percentage is 55% ($825,000 ?$1,500,000). Dividing the $350,000 of fixed costs by 55% produces a breakeven point of $636363. 64.

• Question 445:

  The most fundamental responsibility center affected by the use of market-based transfer prices is a(n)

  A. Production center
  B. Investment center
  C. Cost center
  D. Profit center.
  D. Profit center.

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  Explanation

  Transfer prices are often used by profit centers and investment centers. Profit centers are the more fundamental of these two centers because investment centers are responsible not only for revenues and costs but also for invested capital.

• Question 446:

  Which one of a firms sources of new capital usually has the lowest after-tax cost?

  A. Retained earnings.
  B. Bonds.
  C. Preferred stock.
  D. Common stock.
  B. Bonds.

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  Explanation

  Debt financing, such as bonds, normally' has a lower after-tax cost than does equity financing. The interest on debt is tax deductible. whereas the dividends on equity are not. Also, bonds are slightly less risky than stock because the bond

  holders have a first right to assets at liquidation

• Question 447:

  Which one of the following events will most hake result in a higher pence-earnings ratio for a compacts common shares'?

  A. Investors4 required rate of return on the common shares fans.
  B. The rate of growth in dividends is expected to deckle
  C. The concord is expected to enter a recession,
  D. The addend yield increases when the dividend per share remains unchanged.
  A. Investors4 required rate of return on the common shares fans.

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  Explanation

  A decrees in investors' required rate of return will cause share prices to go up. which with result in a higher P/E ratio

• Question 448:

  The following steps make up the stages of a theory of constraints (TOO) analysis.

  I. Determine the most profitable product mix given the constraint.

  II. Increase capacity at the constraint. Ill. Dentin the constraint.

  IV.

  Redesign the manufacturing process.

  V.

  Maximize the flow through the constraint.

  If executed in the correct order, the sequence is

  A. lll,lIl,V,IV.
  B. Ill, II, I, V, IV.
  C. III, II, I, IV, V.
  D. III, I, V, II, IV.
  D. III, I, V, II, IV.

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  Explanation

  The steps in a TOO analysis are (1) dentist the constraint, (2) determine the most profitable product mix given the constraint, (3) maximize the flow through the constraint, (4) increase capacity at the constraint, [nod (5) redesign the manufacturing process for greater flexibility and speed.

• Question 449:

  Which of the following is not a step in the establishment of a competitive intelligence system?

  A. Data analysis.
  B. Data collection.
  C. Information dissemination.
  D. Classification of competitors.
  D. Classification of competitors.

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  Explanation

  A competitive intelligence system is established to identikit competitor strategies, monitor their new product introductions, analyze markets for the firm's own new product introductions and acquisitions, obtain information about nonpublic firms, evaluate competitor RandD activity, learn about competitors' senior executives, and perform other necessary information gathering tasks. Its establishment consists of setting up the system, collecting data, analyzing the data, and disseminating the information. Classification of competitors, however, is not a step in this process. Competitors are classified, and targeted by a firm based on that classification, following the results of a customer value analysis (CVA).

• Question 450:

  Determining what is ues must be addressed and considering the objectives of the desired course of action are accomplished during which step of the decision-making process?

  A. Defining the problem.
  B. Obtaining information.
  C. Evaluating solutions.
  D. Implementing the decision.
  B. Obtaining information.

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  Explanation

  During the step in the decision-making process of obtaining information, the decision maker determines which issues must be addressed, for example, whether to make or outsource a component. The decision maker also considers the objectives of the desired course of action, for example, to increase return on investment or to enter a new market.