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NEW QUESTION 62
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. after the ex-dividend date and after the payment date
- C. before the payment date and after the ex-dividend date
- D. before the ex-dividend date and before the payment date
Answer: D
NEW QUESTION 63
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. Ill and Iv only.
- B. I only.
- C. III only
- D. I and II only
Answer: D
NEW QUESTION 64
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 65
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 66
Management is responsible for identifying potential events mat could represent opportunities or threats. Which one of the following is not a viable event identification technique?
- A. Loss event data methodologies
- B. Process flow analysis
- C. Review of control categories
- D. Facilitated workshops and interviews
Answer: C
NEW QUESTION 67
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
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NEW QUESTION 68
Each of the following describes a limitation of financial statement analysis except
- A. financial statement analysis is based on historical costs rattier man current costs which can lead to distortions in measurement
- B. financial statements may include significant estimated items which may distort results
- C. it Is difficult to compare one company with another even within the same industry due to differences in accounting principles used.
- D. financial statement analysis can use more than one measure to examine the interrelationships among data
Answer: D
NEW QUESTION 69
Calculate Guda's marginal cost of capital- Show 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
it the company will adjust the selling price mat is if it reduces the profit margin mil decrease as more of its costs are fixed rather man variable in nature hence in has greater sensitivity to increase in sales price
NEW QUESTION 70
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. $500,000
- C. $505,000
- D. $543,000
Answer: D
NEW QUESTION 71
As the number of stocks in a portfolio increases, unsystematic risk
- A. decreases and systematic risk does not change
- B. decreases and systematic risk decreases
- C. increases, and systematic risk increases
- D. increases, and systematic risk does not change
Answer: A
NEW QUESTION 72
Marsalls Products Inc. manufactures and sells two products CD-ROMs and DVD's. The latest forecast on me products and their costs tor the coming year is shown in the following table.
Note 1: Fixed manufacturing cost of Si.500 000 per year is allocated to products based on the number of machine hours required to produce the product at a rate of S3 per machine hour The Manufacturing Team leader just informed the CEO that a fire occurred at one of the manufacturing lines and that line would be unavailable for the next 12 months. The result is that mere will only be 400 000 machine Hours available The CEO requested the management team to revise the plan for the coming year based on the new constraint. The Marketing Team leader stated that in order to minimize customer complaints about the shortage, a minimum of 100,000 units of each product should be produced With the new information from the Manufacturing and Marketing teams what is the optimal product mix for the coming 12 months'' Assume Marsalls can sell allot its production.
- A. 150.000 CD-ROMS and 125.000 DVD
- B. 200,000 CD-ROm's a dn 100,000 DVD
- C. 100,000 CD-ROM's and 150,000 DVD'[s
- D. 120.000 CD-ROM's 140,000 DVD.
Answer: B
NEW QUESTION 73
A furniture retail company uses the LIFO inventory method Due to the nigh inflation rate in me past year, the company's
- A. current ratio may be overstated
- B. quick ratio may be overstated
- C. net income may be understated
- D. quick ratio may be understated
Answer: C
NEW QUESTION 74
Plenary Inc specializes in overnight package delivery. Total packages delivered last year were 10 000.000. and this quantity is expected to remain unchanged in the coming year. Unit contribution margin is $4,50 and total fixed costs are S40.000,000. The firm's 300 delivery truck drivers are seeking a S10 000 raise in annual salary In addition to a current base salary of $45 000 per year, the drivers receive a commission of $0 50 per package delivered If the firm grants the $10,000 salary increase to each driver and seeks to maintain the same level of pre-tax operating profit what is the maximum amount of commission the firm can pay its drivers per package delivered?
- A. $0.35
- B. $0.20
- C. $0.30
- D. $0.0
Answer: B
NEW QUESTION 75
Below is the income statement and balance sheet for a retail corporation.
What is the corporation's debt to total capital in year 2?
- A. 71%
- B. 41%
- C. 6%
- D. 19%
Answer: D
NEW QUESTION 76
Which one of the following statements regarding portfolio diversification is not correct?
- A. A well diversified portfolio can minimize unsystematic risk
- B. A well diversified portfolio can eliminate systematic risk.
- C. The standard deviation of a well diversified portfolio's percentage returns should be approximately equal to the standard deviation of the entire stock market's percentage returns.
- D. A well diversified portfolio should include individual stock investments having a balance of positive and negative betas.
Answer: B
NEW QUESTION 77
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