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The exam consists of two parts, each containing 100 multiple-choice questions, and is administered in a computer-based format. Candidates are given four hours to complete the exam, with a 15-minute break between the two parts. The exam is scored on a scale of 0-500, with a passing score of 360 or higher. The topics covered in the exam include financial statement analysis, corporate finance, decision analysis, risk management, investment decisions, and professional ethics. Successful completion of the exam demonstrates a candidate's proficiency in these areas and signifies their commitment to professional excellence in management accounting.
The IMA CMA-Strategic-Financial-Management exam is designed to test candidates' knowledge and skills in financial statement analysis, corporate finance, risk management, investment decisions, and financial performance measurement. The exam consists of 100 multiple-choice questions and two essay questions. Candidates have four hours to complete the exam. The passing score for the exam is 360 out of 500.
To be eligible for the CMA Part 2 exam, candidates must have completed the CMA Part 1 exam and meet the education and experience requirements set by the IMA. The exam consists of 100 multiple-choice questions and two essay questions, and candidates have four hours to complete it. The passing score for the exam is 360 out of 500.
NEW QUESTION # 31
Given the financial information shown below, what amounts would be shown for sales revenue and for gross prom, respectively in a common size income statement?
- A. 100% and 45%
- B. 100% and 55%
- C. 222% and 225$
- D. 100% and 20%
Answer: A
NEW QUESTION # 32
Selected data for Bittner, inc is shown below (in thousands)
- A. 4727%
- B. 52.25%
- C. 47.75%
- D. 52.73%
Answer: A
NEW QUESTION # 33
Discuss whether QDD stock provided a return that was Better, worse, or the same as its investors would have expected using CAPM snow your calculations Essay Quality Digital Design (QDD) Inc is a public-traded technology company Selected financial data of QDD for the prior year are as follows
QDD's stock was trading at $160 per share at the beginning of the yea: and at $176 per share by the end of the year. The company paid dividends of S5 per share. The company "s stock had a beta of 1 4 The stock market provided a total return of 12% last year, well above the 3% risk free rate of return QDD is considering the issuance of $200 million of bonds to fund the repurchase of $200 million of its stock.
QDD is evaluating the bond, including its term structure, maturity, and whether it should be callable obtaining the lowest coupon interest is an important objective of QDD. The CFO has estimated that sales for the current year would remain the same as last year and the new bond would add S12 million in annual interest payments
Answer:
Explanation:
See the explanation for the answer.
Explanation
As per CAPM Model the return is
3% * 1.2 (12-3)
13 8% TSR-S5'(S176-S160)'$160
TSR-13 12%
The return provided of the company stock was lower as the return provided by the capm model was signify higher than it
NEW QUESTION # 34
A manufacturing company is reviewing the budget for one of its component parts for next year based on the need for 5.000 units.
The company receives a bid from a supplier offering lo provide (lie needed component for a price of $115 per unit The company is deciding whether to make or buy the component What decision should the firm make if (1) the fixed facilities costs can be avoided or (2) if the fixed facilities costs cannot be avoided If purchasing from the supplier?
- A. (1) Make; (2) Buy
- B. (1) Buy; (2) Buy
- C. (1) Buy; (2) Make
- D. (1) Make; (2) Make
Answer: D
NEW QUESTION # 35
FumiSelf is a global manufacturer of consumer-assembled furniture with a business presence in nearly every country. The Vice President of Production was presented with the following information by the Vice President of Finance as of the end of the current quarter.
- A. Europe division is the most inefficient in managing its inventory
- B. African division is the most efficient in manage its inventory
- C. North American division has the lowest days' sales in Inventory.
- D. Asian division has the highest days' sales in inventory
Answer: A
NEW QUESTION # 36
Delman inc considering upgrading its manufacturing facility, and it is expected that the new equipment will cost $180,000. The project's is considering similar to the risk of the firm's other investments. the after-tax cash inflows attribute to this project are expected to increase by $50,000 every year over the next five years. The firm's marginal tax rate is 30%, its debt-to-equal ratio (using market values) is 60%, and its pre-tax cost of debt and equity are 8% and 12% respectively. the weighted average cost of capital appropriate for evaluating this project is closest to
- A. 8.0%
- B. 8.2%
- C. 10.5%
- D. 9.6%
Answer: D
NEW QUESTION # 37
A corporation's board of directors has just declared its next regular quarterly cash dividend. The record date for this dividend will occur
- A. before the ex-dividend date and after the payment date
- B. before the ex-dividend date and before the payment date
- C. before the payment date and after the ex-dividend date
- D. after the ex-dividend date and after the payment date
Answer: B
NEW QUESTION # 38
Radal inc. currently has three product lines: stationery computer supplies, and printer cartridges Based on the following information, the company is considering whether to drop the printer cartridge line.
- A. continue the printer cartridge product line to avoid an additional $3.000 decrease in net income
- B. drop the printer cartridge product line as this will result in a $3 000 increase m net income
- C. drop the printer cartridge product line as this will result in a $6,000 increase m net income
- D. continue the printer cartridge product line to avoid an additional $6.000 decrease in net income
Answer: A
NEW QUESTION # 39
Explain me concept of relevant cost in the season-making process and discuss whatever the €200, 000 course development coil is relevant to OLi's price decisions in future years Essay Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country.
It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is €300 per student, and the total fixed cost of the new course is
€300.000 per year OLI spent €200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI's highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.
Answer:
Explanation:
See the explanation for the answer.
Explanation
Relevant com is cost which is incurred in future and incremental because of the division and in terms of cash other costs are considered to be relevant while making a decision. The development cost is a past cost incurred before mating the decision and hence irrelevant.
NEW QUESTION # 40
Should OLI accept the proposal from the regional airline? Show your calculations Essay Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country.
It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is €300 per student, and the total fixed cost of the new course is
€300.000 per year OLI spent €200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI's highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.
Answer:
Explanation:
See the explanation for the answer.
Explanation
Yes the order can be accepted as the price offered is above the variable cost of 300, hence it will make a contribution of 50 per enrollment and should be accepted
NEW QUESTION # 41
Employee performance review and development systems must be fully aligned with the requirements for ethical conduct Ethical expectations should be included in
- A. compliances, job descriptions and objectives
- B. competencies, only
- C. job descriptions only
- D. competencies and job descriptions only
Answer: C
NEW QUESTION # 42
Explain now QDD's share repurchase plan would affect each of the following measures EPS, the degree of operating leverage, and the interest coverage ratio No calculations required Essay Quality Digital Design (QDD) Inc is a public-traded technology company Selected financial data of QDD for the prior year are as follows
QDD's stock was trading at $160 per share at the beginning of the yea: and at $176 per share by the end of the year. The company paid dividends of S5 per share. The company "s stock had a beta of 1 4 The stock market provided a total return of 12% last year, well above the 3% risk free rate of return QDD is considering the issuance of $200 million of bonds to fund the repurchase of $200 million of its stock.
QDD is evaluating the bond, including its term structure, maturity, and whether it should be callable obtaining the lowest coupon interest is an important objective of QDD. The CFO has estimated that sales for the current year would remain the same as last year and the new bond would add S12 million in annual interest payments.
Answer:
Explanation:
See the explanation for the answer.
Explanation
The share repurchase program will reduce the weighted average number of shares outstanding which is turn will increase the earning per share as the same income will be divided over a fewer number of shares It has no impact on the operating leverage and me .Merest cover ratio as it has nothing to do with cost and interest expense (therefore profitability) its an equity based transaction only
NEW QUESTION # 43
Explain why facilitating payments can create possible ethical and legal issues tor a company Essay Online Learning Inc. lOLI) is a privately-held company based in the IUC that specializes in providing online courses in English as a Second Language (ESL). OLI is trying to set up a new sales office in a foreign country.
It needs a business license to operate in that country. The license normally lakes six months to obtain. An official of that country said that he could expedite the process for a fee of €300.
OLI estimates the new sales office can bring €300,000 incremental profit annually OLI has just launched a new online 40-houi course to help adult ESL learners master basic business English. The price of the new course is €500 per student, the variable cost is €300 per student, and the total fixed cost of the new course is
€300.000 per year OLI spent €200.000 to develop the new course before launching it. There are many online course providers in the marketplace, and each has its own feature However, OLI's highly qualified staff and good reputation have enabled it to charge a premium price compared to its major competitors. Recent market research indicates that if OLI raises the price of its new business English course by 10V the student enrollment would decrease by 5V A regional airlines company in Asia has approached OLI and offered to enroll 1.000 of its employees in the new course if OLI would agree to a special price of €350 per employee If OLI accepts this offer, an additional €10,000 onetime cost would be required to temporally expand its capacity to accommodate the new students.
Answer:
Explanation:
See the explanation for the answer.
Explanation
it can create ethical and legal issues as in some countries it might be considered as a would and would be illegal and secondly in gives undue favour to the company as compared to the company who has actually waited for 6 months to get the license.
NEW QUESTION # 44
A company is considering a capital project that includes the purchase of a new machine costing $100,000. The machines estimated useful life is five years with no salvage value. The annual operating cash inflows from the project are shown below.
Given an effective income tax rate of 20% and using straight-line depreciation, what would be the projects net cash flow in Year 3?
- A. $36,000
- B. $32,000
- C. $16,000
- D. $20,000
Answer: A
NEW QUESTION # 45
Marlow Company s partial balance sheet indicated the following.
- A. 2.08
- B. 1.58
- C. 1.96
- D. 0.51
Answer: B
NEW QUESTION # 46
A company's balance sheet information at the end of July is shown below (in$000s).
What is the company's financial leverage ratio?
- A. 3.89
- B. 2.45
- C. 1.69
- D. 3 74
Answer: C
NEW QUESTION # 47
SSA inc. issues 4% bonds with a lace value of $500,000 when the market rate of interest is 3% for similar bonds. The bonds mature in 10 years, and pay interest every six months. Which one of the following is closest to the amount of cash SSA will receive upon issued.
- A. $459,000
- B. $543,000
- C. $500,000
- D. $505,000
Answer: B
NEW QUESTION # 48
How many units should be produced and sow it AMI'S target net income is $600,000? Snow your calculations.
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.
Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.
Answer:
Explanation:
See the explanation for the answer.
Explanation
A picture containing text Description automatically generated
NEW QUESTION # 49
A company currently offers all of its customers trade credit with terms of 1/15 net 45 of the following alternatives which would not Increase the company's average collection period from its current level?
- A. III only
- B. I and II only
- C. Ill and Iv only.
- D. I only.
Answer: B
NEW QUESTION # 50
Calculate AMI's degree of operating leverage. Show your calculations.
Essay
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.
Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.
Answer:
Explanation:
See the explanation for the answer.
Explanation
$1m/$0.5,
2 times
contribution/operating income
They can simply revalue their assets and hence ask for a higher price for their company or they re structure their financing structure by either issuing fleets or reducing me equity by paying a special one off dividend.
NEW QUESTION # 51
When evaluating a capital Budgeting proposal, an advantage of using the payback method is that Bits process
- A. assesses the liquidity of the project.
- B. objectively determines if the proposal should be accepted or rejected.
- C. incorporates all of the project's cash inflows and outflows
- D. considers the time value of money.
Answer: A
NEW QUESTION # 52
Assuming mere are no other imitations, should AMI accept the one-time order from a financial perspective?
Explain your answer
Essay
Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below.
Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company.
Answer:
Explanation:
See the explanation for the answer.
Explanation
As the price offered is $1200 which is greater than the contribution per unit of $1000, the project should be accepted.
It will increase the profits of me company by $100,000
(500 X $200)
NEW QUESTION # 53
In March 20X2, an investor purchased a government bond with a face value of $100 that matures in 30 years.
The issue price was $94 and the bond offered a yield to maturity of 5.6% One year later, the investor sold the bond at a price of S105 after receiving an interest payment of $6. The total return is
- A. 11.7%
- B. 18.1%
- C. 6.0%
- D. 5.6%
Answer: B
NEW QUESTION # 54
Which one of the following statements best describes an offering after an initial public offering where a benchmark stock price will already exist?
- A. Private placement
- B. Subsequent or secondary public offering.
- C. Over-the-counter offering
- D. Stock repurchase
Answer: B
NEW QUESTION # 55
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