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IMA CMA Part 2: Strategic Financial Management Sample Questions:
1. The best discount rate to the use for evaluate of investment opportunities is the
A) average market interest rate
B) cost of the company's debt
C) risk-free interest rate
D) opportunity cost of capital
2. A risk with a high frequency of occurrence but with a low impact, is best managed by which one of the following risk response strategies?
A) Risk reduction
B) Risk acceptance
C) Risk transfer
D) Risk avoidance
3. 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) 19%
C) 41%
D) 6%
4. Amy Curtin sells used cars of a reliable bona Curtin has no knowledge of me history or any or the specific cars She believes that the brand is reliable, and is considering whether it is acceptable to offer only this general Information rather than specific information regarding me cars when trying to complete each sale The company has always preferred to make the sale and worry about any warranty issues later and there are no legal disclosure requirements in their jurisdiction Curtin considers herself to be an ethical person but she does not want to lose out on any potential sales of vehicles that are most likely in good mechanical condition Which one of the following statements best represents what Curtin should consider related to the meaning of ethics?
A) Ethics is about decisions where the relevant policies are informal and not documented
B) Ethics is about being consistent with the ethical tone set by the organization
C) Ethics is driven by compliance with a set of regulations or laws
D) Ethics is about the integrity of the decision making process to resolve issues
5. 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) 100,000 CD-ROM's and 150,000 DVD'[s
B) 150.000 CD-ROMS and 125.000 DVD
C) 120.000 CD-ROM's 140,000 DVD.
D) 200,000 CD-ROm's a dn 100,000 DVD
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: D |
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