IMANET IMANET-CMA Online Practice Questions and Exam Preparation

IMANET IMANET-CMA Online Questions & Answers

• Question 951:

  What is the oldest and most basic form of direct marketing?

  A. Personal selling.
  B. Electronic mail.
  C. Customer-relationship marketing.
  D. Negotiating.
  A. Personal selling.

  ---

  Explanation

  Personal selling is the most basic (and the oldest) form of direct marketing. The great majority of industrial firms use a professional sales force or hire manufacturers' representative or other agents to perform the in person task of selling. Also, consumer firms (such as Avon) may engage in direct sales.

• Question 952:

  Gleason Co. has two products, a frozen dessert and ready4o-bake breakfast rolls, ready for introduction. However, plant capacity is limited, and only one product can be introduced at present. Therefore, Gleason has conducted a market study, at a cost of $26000, to determine which product will be more profitable. The results of the study follow.

  

  The costs associated with the two products have been estimated by Gleason's cost accounting department and are shown as follows:

  

  *Gleason treats production tooling as a current operating expense rather than capitalizing it as a fixed asset. Applying a deterministic approach, Gleason's revenue from sales of frozen desserts would be

  A. $549,000
  B. $540,000
  C. $216,000
  D. Some amount other than those given.
  B. $540,000

  ---

  Explanation

  The word deterministic is used to characterize processes that are not probabilistic. Such an approach uses the most likely value. In this case, sales of desserts would most likely be 300,000 units. At $1.80 each1 total revenue would be $540,000.

• Question 953:

  Okra, Inc. has been experiencing sales difficulties over the last two years. Management has identified the problem: poor customer service and lack of internal coordination among the marketing department, the production department, and the finance department. In making a decision to solve the problem, management took the following logical steps (not necessarily in this order):

  1. Concluded that extensive training would improve performance and efficiency of all the involved departments; replacing the head of the marketing department will increase profitability only; and investing in information technology will improve customer satisfaction but will not solve communication problems.

  2. Identified three possible ways to solve the problem: extensive personnel training in the involved departments; replacing the head of the marketing department or investing in IT.

  3. Agreed upon key performance indicators, such as customer satisfaction, customer retention, and product and customer profitability to assess the effectiveness of the proposed solution.

  4. Decided to conduct extensive training for marketing department personnel and limited communication training for production and finance departments. What is the correct sequence of these logical decision-making steps?

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

  ---

  Explanation

  The correct sequence of steps in a rational decision making process are as follows, keyed to the steps in Okra's process: defining the problem, obtaining information, identifying alternative courses of action, making predictions about the future costs, choosing and justifying an alternative, implementing the decision, and evaluating performance to provide feedback.

• Question 954:

  Which type of question asks for personalized responses and is most useful when researchers are exploring thought processes?

  A. Multiple-choice.
  B. Yes/No.
  C. Rating-scale.
  D. Rating-scale.
  D. Rating-scale.

  ---

  Explanation

  Closed-end questions yield results that are relatively simple to analyze because the range of answers is finite. Examples are yes/no, multiple-choice, agree/disagree on a given scale, intention-to-buy scale. semantic differential scale (big to little, competent to incompetent, etc.), importance scale, or rating scale. Open-end questions ask for personalized responses and are most useful when researchers are exploring thought processes. Examples are picture interpretation, word association, sentence or story completion, and thematic apperception jesting (creating a story about a ghen picture). -

• Question 955:

  Flex Corporation is studying a capital acquisition proposal in which newly acquired assets will be depreciated using the straight-line method. Which one of the following statements about the proposal would be incorrect if a switch is made to the Modified Accelerated Cost Recovery System (MACRS)?

  A. The net present value will increase.
  B. The internal rate of return will increase.
  C. The payback period will be shortened.
  D. The profitability index will decrease.
  D. The profitability index will decrease.

  ---

  Explanation

  MACPS is an accelerated method of depreciation under which depreciation expense will be greater during the early years of an asset's life. Thus, the outflows for income taxes will be less in the early years, but greater in the later years1 and the NPV (present value of net cash inflows -- investment) will be increased. The profitability index (present value of net cash inflows ?the investment) must increase if the NPV increases.

• Question 956:

  Different firms in a distribution channel system play different roles. The firms least likely to respect the industry code of conduct are

  A. Transients.
  B. Strivers.
  C. Complementary
  D. Insiders.
  A. Transients.

  ---

  Explanation

  A transient enters the dominant channel only when it perceives an opportunity It is not a member and has only short-term objectives Thus, it is less likely than other participants to abide by the industry code of conduct.

• Question 957:

  Strategic choices in an emerging industry are inherently subject to great uncertaintj and risk with regard to competitors, industry structure, and competitive rules. Accordingly, a firm considering entry into an emerging industry

  A. Has little need to be concerned with industry cooperation.
  B. Is least likely to be able to shape the industry structure at this stage.
  C. May enjoy such benefits of pioneering as experience advantages and early commitment to suppliers.
  D. Must be prepared for responding vigorously to competitors' moves.
  C. May enjoy such benefits of pioneering as experience advantages and early commitment to suppliers.

  ---

  Explanation

  Timing of entry is a critical choice. Pioneering firms face high risk but low barriers and may earn high returns. The following are factors favoring early entry: pioneering improves the firm's reputation, the learning curve (experience) advantage is important and will persist, customer loyally will be high, and cost advantages (through early commitment to suppliers or distributors) can be secured.

• Question 958:

  Which one of the following statements is most likely to be true if a seller extends creditor a purchaser for a period of time longer than the purchaser's operating cycle? The seller A. Will have a lower level of accounts receivable than those companies whose credit period is shorter than the purchaser's operating cycle.

  A. Will have a lower level of accounts receivable than those companies whose credit period is shorter than the purchaser's operating cycle.
  B. Is, in effect, financing more than just the purchaser's inventory needs.
  C. Can be certain that the purchaser will be able to convert the inventory into cash before payment is due.
  D. Has no need for a stated discount rate or credit period.
  B. Is, in effect, financing more than just the purchaser's inventory needs.

  ---

  Explanation

  The normal operating cycle is defined as the period from the acquisition of inventory to the collection of the account receivable. If trade credit is foray period longer than the normal operating cycle, the seller must therefore be financing more than just the purchase of inventory.

• Question 959:

  Which of the following internal controls is not one typically eliminated when a just-in- time inventory system is introduced?

  A. Sophisticated inventory tracking system.
  B. Central receiving dock
  C. Statical methods for quality assurance.
  D. Hard copy receiving report.
  C. Statical methods for quality assurance.

  ---

  Explanation

  Under a JIT system,the quality of parts provided by suppliers is verified by use of statistical controls rather han inspection if oncoming goods.storage,counting,and inspection are eliminated in an effort to perform only value-adding work.

• Question 960:

  A weakness of the internal rate of return (IPP) approach for determining the acceptability of investments is that it

  A. Does not consider the time value of money.
  B. Is not a straightforward decision criterion.
  C. Implicitly assumes that the firm is able to reinvest project cash flows at the firm's cost of capital.
  D. Implicitly assumes that the firm is able to reinvest project cash flows at the project's internal rate of return.
  D. Implicitly assumes that the firm is able to reinvest project cash flows at the project's internal rate of return.

  ---

  Explanation

  The IRR is the rate at which the discounted future cash flows equal the net investment (NPV = 0). One disadvantage of the method is that inflows from the early years are assumed to be reinvested at the IRP. This assumption may not be sound. Investments in the future may not earn as high a rate as is currently available.