Free CMA-Strategic-Financial-Management Exam Dumps

Question 26

- (Topic 1)
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.
CMA-Strategic-Financial-Management dumps exhibit
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 S100 000
B. Yes, because the special order will increase operating profit by S250 000
C. No, because the special order will reduce operating profit by S50 000
D. No, because the special order will reduce operating profit by $250 000

Correct Answer:C

Question 27

- (Topic 1)
When evaluating a capital Budgeting proposal, an advantage of using the payback method is that Bits process

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

Correct Answer:A

Question 28

- (Topic 1)
K Malone is a successful entrepreneur, Currently she is considering investing in a capital protect, which would benefit tourism in North Caroina Because of tourism, the State of North Carolina is willing to lent) her $150,000 at a rate of 5%. well below the market rate Her estimated net cash flows for the 3-year lifetime of the project are S15 000 $89,000 and $60,000 respectively Recommend whether or not Malone should undertake this project.

A. She should undertake this project because the present value (PV) of this project is $146,843
B. She should undertake this project because the net present value (NPV) is $31,022.
C. She should not undertake this project because the net present value NPV is ($14.051).
D. She should not undertake this protect because the net present value (NPV) is ($3.157)

Correct Answer:C

Question 29

- (Topic 1)
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. hazard loss mal can be mitigated with liability insurance
B. cost of doing business mat the company's m-house legal counsel will hand.
C. financial risk managed through product diversification
D. catastrophic force that could have been managed better with a robust crisis management plan

Correct Answer:A

Question 30

- (Topic 1)
A company manufactures two products Product X and Product Y, during a joint process Product Y canoe processed further to create Product Z Relevant data are shown below.
CMA-Strategic-Financial-Management dumps exhibit

A. Product Y should be processed further because me selling once of Product Z Is higher than Product Y
B. Product Y should he processed further because an additional S5.000 profit can be achieved by processing further
C. Product y should not be processed further because an additional S35 000 loss can be achieved by processing further
D. Product Y should be processed further because an additional $45,000 prof* can be achieved by processing further

Correct Answer:B