IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 731:

  Which one of the following statements concerning cash flow determination for capital budgeting purposes is not correct?

  A. Tax depreciation must be considered because it affects cash payments for taxes.
  B. Book depreciation is relevant because it affects net income.
  C. Sunk costs are not incremental flows and should not be included.
  D. Networking capital changes should be included in cash flow forecasts.
  B. Book depreciation is relevant because it affects net income.

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  Explanation

  Tax depreciation is relevant to cash flow analysis because it affects the amount of income taxes that must be paid. However, book depreciation is not relevant because it does not affect the amount of cash generated by an investment.

• Question 732:

  Kim is thinking of organizing a funraiser to support a local charity. She has planned to rent a banquet hall and provide the guests with food, entertainment , and various party favors. She has decided to charge $500 a person. After researching around town, Kim has discovered the following costs:

  

  What is Kim's contribution margin?

  A. $400
  B. $450
  C. $480
  D. $500
  C. $480

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  Explanation

  The contribution margin in a breakeven analysis can be found by taking the revenues per person and subtracting the variable cost per person. In this case, it would be $500-- $20 = $480.

• Question 733:

  Bruell Electronics Co. is developing a new product, surge protectors for high-voltage electrical flows. The cost information below relates to the product

  

  The company will also be absorbing $120.000 of additional fixed costs associated with this new product. A corporate fixed charge of $20,000 currently absorbed by other products will be allocated to this new product.How many surge protectors (rounded to the nearest hundred) must Bruell Electronics sell at a selling price of $14 per unit to increase after4ax income by $30,000? Bruell Electronics' effective income tax rate is 40%.

  A. 10,700 units.
  B. 12,100 units.
  C. 20,000 units.
  D. 28,300 units.
  D. 28,300 units.

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  Explanation

• Question 734:

  In calculating the total value of a bond, how much does the $1,000 to be received upon a bond's maturity in 4 years add to the bond's price if the discount rate is 6%?

  A. $208.00
  B. $747. 00
  C. $763. 00
  D. $792. 00
  D. $792. 00

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  Explanation

  The 6% present value factor for four years is .792. Multiplying that times $1,000 results value of $792. 00.

• Question 735:

  A structured form of marketing that makes use of demographic information obtained from studying patterns in databases of current and potential customers is known as:

  A. Micromarketing.
  B. Product positioning.
  C. Mass marketing.
  D. Relationship marketing.
  A. Micromarketing.

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  Explanation

  Micromarketing is a structured form of marketing that makes use of demographic information obtained from studying patterns in databases of current and potential customers.

• Question 736:

  Which of the following best describes a market synergy?

  A. Technology transfer from one product to another
  B. Bundling of products distributed through the same channels
  C. Production of multiple products at one facility
  D. Use of complementary management skills to achieve entry into a new market
  B. Bundling of products distributed through the same channels

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  Explanation

  Market synergy arises when products or services have positive complementary effects. Shopping malls reflect this type of synergy. Also, bundling of products, distribution through the same distribution channels , and usage of the same sales force are other examples of market synergies.

• Question 737:

  Rohan Transport is considering two alternative busses to transport people between cities that are in the Southeastern U.S., such as Baton Rouge and Gainesville. A gas-powered bus has a cost of $55,000, and will produce end-of-year net cash flows of $22,000 per year for 4 years. A new electric bus will cost $90,000, and will produce cash flows of $28000 per year for 8 years. The company must provide bus service for 8 years, after which it plans to give up its franchise and to cease operating the route. Inflation is not expected to affect either costs or revenues during the next 8 years. If Rohan Transports cost of capital is 16%, by what amount will the better project increase the company's value?

  A. $6,556
  B. $(14,432)
  C. $13,112
  D. $31,632
  D. $31,632

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  Explanation

• Question 738:

  A distinction between forecasting and planning

  A. Is not valid because that are synonyms
  B. Arises because forecasting covers the short term and planning does not
  C. Is that forecasts are used in planning
  D. Is that forecasting is a management activity, whereas planning is a technical activity
  C. Is that forecasts are used in planning

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  Explanation

  Planning is the determination of what is to be done, and of how, when, where. and by whom it is to be done. Plans save to direct the activated that all organizational members must undertake to move the organization from where it is to where it wants to be. Forecasting is the basis of planning because it projects the future. A variety of quantitative methods are used in forecasting

• Question 739:

  Presented below are partial year-end financial statement data for companies A and B.

  

  If Company A has 60 common shares outstanding, then it has a book value per share, to the nearest cent, of

  A. $1.67
  B. $2. 50
  C. $4. 17
  D. $5. 00
  C. $4. 17

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  Explanation

  The book value per share for Company A equals the sum of common stock and retained earnings, divided by the number of shares, or $4. 17 [($100 + $150) ?60].

• Question 740:

  Process value analysis is a key component of activity-based management that links product costing and

  A. Reduction of the number of cost pools.
  B. Continuous improvement
  C. Accumulation of heterogeneous cost pools.
  D. Overhead rates based on broad averages.
  B. Continuous improvement

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  Explanation

  Design of an ABC system starts with process value analysis, a comprehend sive under standing of how an organization generates its output. It involves a determination of which activities that use resources are value-adding or no value-adding and how the latter may be reduced or eliminated. This linkage of product costing and continuous improvement of pro-esses is activity-based management (ABM). It encompasses driver analysis, activity analysis, and performance measurement.