IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 721:

  Hendnx, Inc. is interested in purchasing a $100 U.S. Treasury bill and was presented with the following options: If Hendrix wishes to buy the Treasury bill at the lowest purchasing price, which option should be chosen, assuming a 360- day year?

  

  A. Option 1. B. Option 2.
  C. Option 3.
  D. Option 4.
  B

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  Explanation

  To determine the amount of interest the lender will earn, the 3. 5% discount rate is multiplied by the face amount of the Treasury bill. The interest on this Treasury bill is $3. 50 ($100 x 3. 5% x 1 year); thus, the purchase price is $96. 50 ($100 $3. 5).

• Question 722:

  Antlers1 Inc. produces a single product that sells for $150 per unit. The product is processed through the Cutting and Finishing Departments. Additional data for these departments are as follows:

  

  The current production rate is the budgeted rate for the entire year. Direct labor employees earn $20 per hour, and the company has a "no layoff" period in effect. What is the amount of the throughput contribution per unit as computed using the theory of constraints?

  A. $90.00
  B. $76. 67
  C. $46. 67
  D. $26. 67
  A. $90.00

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  Explanation

  Throughput costing, sometimes called super variable costing, recognizes only direct materials costs as being truly variable and thus relevant to the calculation of throughput margin (throughput contribution). All other manufacturing costs are ignored because they are considered fixed in the short turn. For Antlers' single product, the throughput margin is therefore $90 ($150 selling price --$45 direct materials in Cutting --$15 direct materials in Finishing)

• Question 723:

  United Industries manufactures three products at its highly automated factory. The products are very popular, with demand far exceeding the company's abilitqto supply the marketplace. To maximize profit, management should focus on each product

  A. Gross margin.
  B. Segment margin.
  C. Contribution margin ratio.
  D. Contribution margin per machine hour.
  D. Contribution margin per machine hour.

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  Explanation

  When demand far exceeds a company's abilitstto supply the marketplace, management will want to maximize its profits per unit of scarce resource. If the scarce resource is raw materials, the products that provide the greatest contribution margin per unit of raw materials are the products to emphasize. If machine hours are the constraint, profits are machined by emplaning the contribution margin per machine hour.

• Question 724:

  Francis wants to create an endowment income of $15,500 a year for the Cancer Research Center at the Municipal Hospital. She proposes that the first payment not be made for 3 years' time. if Francis can earn a return of 6% on her investments, what amount should she invest now?

  A. $216,999.99
  B. $243,608.33
  C. $229,916. 66
  D. $258,333. 33
  C. $229,916. 66

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  Explanation

  The present value of the perpetuity will be $258.333. 33 ($15,500 ?0,06). This amount has to be invested by the end of 2 years so that the first payment of $15,500 will be received at the end of 3 years. The present value of this today is equal to the present value factor for 6% for 2 years multiplied by $258,333. 33. The present value factor for 6% for 2 years is 0.890, so the solution is $229,916. 66.

• Question 725:

  The physical reconfiguration of equipment that often accompanies the institution of a just-in-tme manufacturing regime is described as the creation of

  A. Cells
  B. Kanbans
  C. Electronic data intercharge
  D. tickets
  A. Cells

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  Explanation

  Plant layout in a IT-lean production environment os not arranged by functional department or process but by manufacturing cells (work cells).cells are sets of machines,often group in semicircles,that produce a given product or product type.

• Question 726:

  Mulva Inc. is considering the following five independent projects:

  

  The company has a target capital structure which is 40 percent debt and 60 percent equity. The company can issue bonds with a yield to maturity of 10 percent. The company has $900000 in retained earnings, and the current stock price is $40 per share. The flotation costs associated with issuing new equity are $2 per share. Mulva's earnings are expected to continue to grow at 5 percent per year. Next year's dividend (D1) is forecasted to be $2. 50. The firm faces a 40 percent tax rate. What is the size of Mulva's capital budget?

  A. $1,200,000
  B. $1,750,000
  C. $2,400,000
  D. $800,000
  B. $1,750,000

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  Explanation

• Question 727:

  What is the formula for the beta coefficient of a security?

  A. Covariance of the returns on the market and on the security / Variance of the return on the market.
  B. Covariance of the returns on the market and on the security x Variance of the return on the market.
  C. Variance of the return on the market / Variance of the return on the security.
  D. Variance of the return on the market x Variance of the return on the security. / Covariance of the returns on the market and on the security
  A. Covariance of the returns on the market and on the security / Variance of the return on the market.

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  Explanation

  The word beta is derived from the regression equation for regressing the return of an individual security (the dependent variable) to the overall market return. The beta coefficient is the slope of the regression line. The beta for a security may also be calculated by dividing the covariance of the return on the market and the return on the security by the variance of the return on the market.

• Question 728:

  In the strategic marketing stage, the firm

  A. Delivers and communicates value
  B. Provides customer value profitably
  C. Plans the marketing mix
  D. Choose the value to be delivered
  D. Choose the value to be delivered

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  Explanation

  The firm chooses the value to be delivered in the strategic marketing stage. This stage consists of market segmentation and choosing target markets. Segments are defined by analysis of buyer differences (income, age, location, attitude, etc). Choosing target markets is the determination of the best marketing opportunities.

• Question 729:

  Jasper Company has a payback goal of 3 years on new equipment acquisitions. A new sorter is being evaluated that costs $450,000 and has a 5-year life. Straight-line depreciation will be used; no salvage is anticipated. Jasper is subject to a 40% income tax rate. To meet the company's payback goal, the sorter must generate reductions in annual cash operating costs of

  A. $60,000
  B. $100,000
  C. $150,000
  D. $190,000
  D. $190,000

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  Explanation

• Question 730:

  The creation of regional free trade zones is a global phenomenon. Trade barriers are lowered in these areas, and other steps are taken to promote economic cooperation. For example, a common currency has been adopted by the nations of

  A. NAFTA
  B. Mercosul
  C. APEC
  D. The European Union
  D. The European Union

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  Explanation

  The European Union (EU) is a collection of 15 European nations that have lowered trade barriers among member states an share a common currency and trade policy. The euro is the common currency of the European Union.