IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 781:

  A not-for-profit social agency provides home health care assistance to as many patients as possible s budgeted appropriation CX) for next year must cover fixed costs of $5 million. and the annual per-patient cost (Y) of its services. However, the agency is preparing for a possible 10% reduction in its appropriation that will lower the number of patients served from 5,000 to 4,000 The reduced appropriation and the annual per- patient cost equal

  

  A. Option A
  B. Option B
  C. Option C
  D. Option D
  C. Option C

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  Explanation

• Question 782:

  A proposed transfer price may be based upon the full-cost price Full-cost price is the price

  A. On the open market.
  B. Representing the cash outflows of the supplying division plus the contribution to the supplying division from an outside sale.
  C. Usually set by an absorption-costing calculation
  D. Set by charging for variable costs plus a lump sum or an additional markup, but less than full markup
  C. Usually set by an absorption-costing calculation

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  Explanation

  Full-cost price is the price usually set by an absorption-costing calculation and includes materials, labor, and a full allocation of manufacturing O/H. This full-cost price may lead to dysfunctional behavior by the supplying and receiving divisions, e g., purchasing from outside sources at a slightly lower price that is substantially above the variable costs of internal production.

• Question 783:

  The present value may be calculated for discounted cash Inflows Outflows Annuities

  A. Yes Yes Yes
  B. Yes No Yes
  C. No Yes No
  D. No No Yes
  A. Yes Yes Yes

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  Explanation

  The present value concept may be applied both to dollars-in (inflows) and to dollars-out (outflows). Thus, individual cash inflows and cash outflows or a series thereof (an annuity') may be discounted to time: zero (the present). Net present value is the sum of discounted cash inflows minus any discounted cash outflows. Net present value may be either positive or negative.

• Question 784:

  The chief financial officer of Smith Glass, Inc. follows the policy of matching the maturity of assets with the maturity of financing. The implications of this policy include all of the following, expect that

  A. The seasonal expansion of cash, receivables, and inventory should be financed by short-term debt, such as vendor payables and bank debt.
  B. The minimum level of cash, receivables, and inventory required to stay in business can be considered permanent and financed with long-term debt or equity.
  C. Cash, receivables, and inventory should be financed with long-term debt or equity
  D. long-term assets, like plant and equipment, should be financed with long-term debt or equity.
  C. Cash, receivables, and inventory should be financed with long-term debt or equity

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  Explanation

  Arranging a portfolio so that the maturity of funds will coincide with the need for funds (called maturity matching) will maximize the average return on the portfolio and provide increased flexibility. Supporting short-term assets, such as cash and receivables, with long-term financing is risk and counterproductive.

• Question 785:

  The common stock of the Nicolas Corporation is currently selling at $80 per share. The leadership of the company intends to pay a $4 per share dividend next year With the expectation that the dividend will grow at 5% perpetually, what will the markets required return on investment be for Nicolas common stock'?

  A. 5%
  B. 6. 5. 25%
  C. 7. 5%
  D. 10%
  D. 10%

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  Explanation

  The dividend growth model estimates the cost of retained earnings using the dividends per share, the expected growth rate, and the market price. The current dividend yield is 5% ($4 + $80) Adding the growth rate of 5% to the yield o15% results in a required return of 10%.

• Question 786:

  Which pattern of segmentation by preferences indicates a great variety of preferences?

  A. Diffuse.
  B. Clustered.
  C. Homogeneous.
  D. Geographic.
  A. Diffuse.

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  Explanation

  Diffuse preferences signify a great variety of preferences. The first firm in the market will position itself to satisfy average preferences and thus the most customers.

• Question 787:

  Which factor most likely encourages entry into an existing market?

  A. Government subsidies for new investors.
  B. High product differentiation, principally produced by trademarks.
  C. Knowledge of the industry, with high investments in developments.
  D. Low fixed exit costs.
  A. Government subsidies for new investors.

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  Explanation

  Subsidies for new firms lower entry barriers. Thus, new firms may enter the industry and intensify competition. Government policy also may affect competition via regulations that encourage or discourage substitutes or affect costs, that govern competitive behavior, or that limit growth. Government also may be a buyer or supplier.

• Question 788:

  In referring to the graph of a firm's cost of capital, if e is the current position, which one of the following statements best explains the saucer or U-shaped curve'?

  

  A. The composition of debt and equity does not affect the firm's cost of capital.
  B. The cost of capital is almost always favorably influenced by increases in financial leverage.
  C. The cost of capital is almost always negatively influenced by increases in financial leverage.
  D. Use of at least some debt financing will enhance the value of the firm.
  D. Use of at least some debt financing will enhance the value of the firm.

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  Explanation

• Question 789:

  Which strategy in a global industry is most Ikea to be facilitated by a transnational coalition?

  A. A protected niche strategy.
  B. A nab onal focus strategy.
  C. A national segment strategy.
  D. Broad line global competition.
  D. Broad line global competition.

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  Explanation

  Broad line global competition is competition over the full product line of the firm based on differentiation or low cost. The firm needs large resources for this long-term strategy. Governmental relations should emphasize impediment reduction. Transnational coalitions may be created to help the firms overcome impediments to executing the broader strategies, for example, market access or technology barriers.

• Question 790:

  According to the Kotler, what is the positive differential effect that knowing the brand name has on customer response to the product or service?

  A. Brand valuation
  B. Customer equity
  C. Brand equity
  D. Customer lifetime value
  C. Brand equity

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  Explanation

  According to Kotler, brand equity is "the positive differential effect that knowing the brand name has on customer response to the product or service." It may be measured by the incremental price a customer will pay for the product