Pass Your CMA-Strategic-Financial-Management Exam Easily - Real CMA-Strategic-Financial-Management Practice Dump Updated Aug 03, 2022 [Q25-Q43]

Pass Your CMA-Strategic-Financial-Management Exam Easily - Real CMA-Strategic-Financial-Management Practice Dump Updated Aug 03, 2022

2022 Realistic Verified Free IMA CMA-Strategic-Financial-Management Exam Questions

NEW QUESTION 25
Each of the following describes a limitation of financial statement analysis except

A. it Is difficult to compare one company with another even within the same industry due to differences in accounting principles used.
B. financial statements may include significant estimated items which may distort results
C. financial statement analysis can use more than one measure to examine the interrelationships among data
D. financial statement analysis is based on historical costs rattier man current costs which can lead to distortions in measurement

Answer: C

NEW QUESTION 26
On January 1, 2008 the exchange rate between the U S dollar (S) and Indian Rupee (Rs) was $t = Rs 39. 2676.
On January 1, 2009 the rate was Rs 1 = $0,0205. Based only on the relative currency appreciation or depreciation, which country's exports would likely have increased?

A. U.S
B. Both India and U.S
C. Neither India or U.S
D. India

Answer: A

NEW QUESTION 27
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 28
Studler's Restaurant is considering a contract to supply the weal senior citizen center with 10,000 meals.
Regular sales at regular prices would be unaffected. The food cost for each meal s S3 Additional costs incurred as a result of the contract would De variable overhead of S 50 and variable selling general and administrative costs of S SO per meal sold. The selling price per meal would be $5, A total of $20,000 in fixed costs would be allocated at $2 per meal. The fixed costs are part of an overall total of $500,000 in annual fixed costs incurred regardless of the contract. What will be the effect on pretax income if Studiers takes the special order?

A. $10.000 decrease
B. $20.000 decrease
C. $10, 000 increase
D. $20, 000 increase

Answer: C

NEW QUESTION 29
When evaluating a capital Budgeting proposal, an advantage of using the payback method is that Bits process

A. considers the time value of money.
B. assesses the liquidity of the project.
C. incorporates all of the project's cash inflows and outflows
D. objectively determines if the proposal should be accepted or rejected.

Answer: B

NEW QUESTION 30
Calculate QDDs financial leverage ratio show 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

NEW QUESTION 31
A company with idle capacity has been contacted by a new customer to supply 10,000 units of its products for a special batch order its costs are as follows.

The company's normal soling price is SI00 per unit but the customer is wiling to pay only S70 pet unit Should the company accept the special order''

A. Yes, because the special order will increase operating profit by S250 000
B. No, because the special order will reduce operating profit by S50 000
C. Yes, because the special order will increase operating profit by S100 000
D. No, because the special order will reduce operating profit by $250 000

Answer: B

NEW QUESTION 32
Custom Ceramics produces two hand-painted items a large bowl and a large platter. Relevant information for each of these items is shown below

A. The company should produce only platters because the variable cost per platter is lower
B. The company should produce only bowls because the sales price per Bowl is higher
C. The company should produce only platters because the contribution margin per painting hour is higher
D. The company should produce only bowls because the contribution margin per bowl is higher.

Answer: C

NEW QUESTION 33
Your organization is considering implementing an Enterprise Risk Management process. You expect to obtain many benefits from this process. Which of the following is not an expected Benefit?

A. Aligning risk appetite and strategy
B. Reducing operational surprises and losses
C. Seizing opportunities.
D. Eliminating risk response decisions

Answer: D

NEW QUESTION 34
Identify the market structure in which OLI operates and explain how OLi's pricing is affected by this mantel structure 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
The market is quite sensitive to prices as the change in price is affecting me demand However the company has less opportunity over here to increase the prices for its premium service as the customers would be willing to pay less and get the same service from the competitor.

NEW QUESTION 35
Javier makes hand-looted learner dog collars. The materials cost $10 per collar and the collars are sold for $50 each. Javier sells me collars at a local farmer's market mat charges S100 per month for space rental if Javier's income tax rate is 30%, how many collars must Javier sell each year to earn $1,000 net income?

A. 0
B. 1
C. 2
D. 3

Answer: C

NEW QUESTION 36
The CFO at GameX, a handheld game manufacturer has asked a financial analyst to provide an analysis and evaluation of the company versus three of its competitors. The analyst prepared the following report.

Based or the analysis the analyst is justified to write in his evaluation mat in order to Improve its position in the market. GameX should

A. reduce its debt load
B. increase its inventory

Answer: A

NEW QUESTION 37
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 only.
C. Ill and Iv only.
D. I and II only

Answer: D

NEW QUESTION 38
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. $16,000
B. $20,000
C. $32,000
D. $36,000

Answer: D

NEW QUESTION 39
Clark inc, expects to incur the following selected costs an a new product being planned for introduction early next.
* Design an development costs of $100,000 that will be incurred this year.
* Marketing costs of $50,000 to be incurred %50 this year %50 year
* Manufacturing costs of $500,000 to be incurred next year.
* In addition to external market factors, the pricing decision should be based on cost. The product cost that should be used is

A. $500,000
B. $550,000
C. $650, 000
D. $525, 000

Answer: C

NEW QUESTION 40
IF a company does not have a code of conduct, the company most likely

A. must find another way to express its ethical principles
B. will lack an expressed statement of values regarding ethical behavior
C. is missing important guidance on ethical decision making
D. can use its statement of values instead to implement ethics in daily decision making

Answer: C

NEW QUESTION 41
Safety Strollers was recently sued by several people who alleged harmful and unsafe strollers. The management team was largely unconcerned about these lawsuits due to the apparent negligence of the plaintiffs However, a consumer grassroots effort Drought these dangers into the public eye and the management team now fears for their brand s reputation and the sales o' their products. The facts are staring to get distorted and some stores are electing to no longer carry this brand. This situation could best be considered a

A. cost of doing business mat the company's m-house legal counsel will hand.
B. hazard loss mal can be mitigated with liability insurance
C. financial risk managed through product diversification
D. catastrophic force that could have been managed better with a robust crisis management plan

Answer: B

NEW QUESTION 42
A retail company sells numerous products m its one department store. The income statements tot two of these products are shown below

After reviewing the income statements, the president is considering drooping one or both products. Which produces), if any should the company discontinue?