IMANET-CMA Online Practice Questions and Answers

Antlers1 Inc. produces a single product that sells for $150 per unit. The product is processed through the Cutting and Finishing Departments. Additional data for these departments are as follows: The current production rate is the budgeted rate for the entire year. Direct labor employees earn $20 per hour, and the company has a "no layoff" period in effect. What is the amount of the throughput contribution per unit as computed using the theory of constraints?

A. $90.00

B. $76.67

C. $46.67

D. $26.67

Marketing research may rely on primary or secondary sources of information. Which research approach gathers primary information through moderated discussions?

A. Surveys.

B. Focus groups.

C. Experimentation.

D. Evidence of purchasing behavior.

Which of the following is a source of global competitive actvantage?

A. Low fixed costs.

B. Production economies of scale

C. Weak copyright protection.

D. Intensive local service requirements.

Which one of the following transactions would increase the current ratio and decrease net profit?

A. A federal income tax payment due from the previous year is paid

B. A stock dividend is declared

C. Uncollectible accounts receivable are written off against the allowance account

D. Vacant land is sold for less than the net book value

All of the following are inventory carrying costs except

A. Storage.

B. Insurance.

C. Opportunity cost of inventory investment.

D. Inspections.

Malony, Inc.'s $1,000 par value preferred stock paid its $100 per share annual divided on April 4 of the current year. The preferred stock's current market price is $960 a share on the date of the dividend distribution. Maloney's marginal tax rate (combined federal and state) is 40%, and the firm plans to maintain its current capital structure relationship. The component cost of preferred stock to Maloney would be closest to

A. 6%

B. 6.25%

C. 10%

D. 10.4%

Harrison's Spot scars is able k borrow at an annual rate of 7% for two years, using its automobile loans as collateral The loans are made from Nanto Acceptance Company, a whole owned subsidiary. It estimates that its overhaul return from car loans is 11%, once the return on the loans (6.9%) and economies realized from manifesting costs are factored into the analysis. If the average automobile loan is three years in length, what forward interest rate is implied by this homemade forward contract?

A. 3.84%

B. 7.82%

C. 19.45%

D. 23.21%

Market-skimming pricing strategies could be appropriate when

A. No buyers want the product at a high price.

B. The costs of producing a small volume are low.

C. Competitors can easily enter the market

D. The product is of poor quality.

Finn Products, a start-up company, wants to use cost-based pricing for its only product, a unique new video game. Finn expects to sell 10.000 units in the upcoming year. Variable costs will be $65 per unit and annual fixed operating costs (including depreciation) amount to $80,000 Finn's balance sheet is as follows:

If Finn wants to earn a 20% return on equity, at what price should at sell the new product?

A. $75.00

B. $78.60

C. $79.00

D. $81.00

A firm is considering a capital project for which the following information is available: An existing piece of equipment that would be disposed of to make room for new equipment has a historical cost of $370,000. It has a salvage value of $10000 and has been depreciated on a straight-line basis for 16 of the estimated 18 years of its useful life. The new equipment has a cost of $500,000 and the firm expects it will have to devote $20,000 in cash and $24,000 in accounts receivable to the new project. The firm's effective tax rate is 40%. The required net initial irwestrnent in the new project is?

A. $544,000

B. $534,000

C. $518,000

D. $498,000