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IMA CMA Part 2: Strategic Financial Management Sample Questions:
1. Southwest Supplies Inc. (SSI) is considering the following two projects with cash-flows discounted at SSI's weighted average cost of capital.
SSI can only afford to invest in one of the projects. Which statement would most likely explain why SSI would choose Project B over project A?
A) Project B results in a higher cumulative accounting income
B) Project B generates significantly more non-cash expenses
C) Project B cash-flows are relatively more certain
D) Project B cash-flows are to be received sooner
2. 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) $0.0
B) $0.20
C) $0.30
D) $0.35
3. Which one of the following moral philosophies states that the morality of an action is inherent and not based on the consequences of the action?
A) Teleology
B) Utilitarianism
C) Relativism
D) Deontology
4. A furniture retail company uses the LIFO inventory method Due to the nigh inflation rate in me past year, the company's
A) net income may be understated
B) quick ratio may be overstated
C) quick ratio may be understated
D) current ratio may be overstated
5. Which one of the following would best ensure the effectiveness of an organization s code of conduct?
A) Distribute the document internally to staff and externally to suppliers and distributors to increase awareness of ethics considerations
B) Hold periodic employee workshops that illustrate expected behaviors in business situations in which ethical issues may arise
C) Incorporate ethics training for all new employees as a standard part of the orientation process
D) Require executives and managers to take individual responsibility for practicing ethical behavior
Solutions:
Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: D | Question # 4 Answer: A | Question # 5 Answer: B |
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