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NEW QUESTION # 40
With respect to the COSO Enterprise Risk Management Integrated Framework (2017), which one of the following statements is true regarding Governance & Culture and Performance?
- A. They are both components of the Integrated Framework
- B. They are both principles of the Integrated Framework
- C. Performance is a principle and Governance & Culture is a component of the Integrated Framework
- D. Governance & Culture is a principle and Performance is a component of the Integrated Framework
Answer: A
NEW QUESTION # 41
Slam-Dunk Shoes has 5,000 pairs or damaged shoes in inventory. The cost of these shoes was $51,000. in their present condition, the shoes may be sold at clearance prices for $29,000 Slam-Dunk can have the shoes repaired at a cost of $77,000 after which they can be sold for $100,000. What is the opportunity cost of selling the shoes in their present damaged condition?
- A. $23.000
- B. $77, 000
- C. $100, 000
- D. $71.000
Answer: A
NEW QUESTION # 42
Below is the income statement and balance sheet for a retail corporation.
What is the corporation's return on equity in Year 2?
- A. 39%
- B. 48%
- C. 26%
- D. 23%
Answer: B
NEW QUESTION # 43
The production process of a company s main product yields a by-product Production costs or $700,000 are incurred during this process and $300,000 m additional costs are incurred to finalize the main product. The by-product can be sold for $200 000 without further processing A manager proposed the conversion of the by-product into another product that would cost $100,000 and generate revenue of $250,000. When deciding on this proposal the company should
- A. ignore the $200 000 sales revenue for the by-product because it Is irrelevant
- B. select an approbate cost allocation method to allocate the $1 100 000 joint costs
- C. evaluate whether other nonfinancial factors outweigh the Si 50.000 in incremental income
- D. treat the $100,000 conversion cost as the marginal cost 1o produce the new product
Answer: D
NEW QUESTION # 44
Custom Ceramics produces two hand-painted items a large bowl and a large platter. Relevant information for each of these items is shown below
- A. The company should produce only bowls because the sales price per Bowl is higher
- B. The company should produce only bowls because the contribution margin per bowl is higher.
- C. The company should produce only platters because the contribution margin per painting hour is higher
- D. The company should produce only platters because the variable cost per platter is lower
Answer: C
NEW QUESTION # 45
A company can by identical raw materials from four suppliers. Each supplier offers a different term of sale.
Which one of the following terms of sale has the highest effective annual interest rate if the company does not take the cash discount?
- A. 1/10, net 45
- B. 1/30, net 90
- C. 1/30 net 45
- D. 1/10, net 90
Answer: C
NEW QUESTION # 46
If a CMA is asked to conduct a financial assessment of a company owned by a close relative, what would be the proper response under the credibility standard of the IMA Statement of Ethical Professional Practice?
- A. Keep information confidential except when authorized By the relative
- B. Communicate the existence of a constraint that might preclude responsible judgment
- C. Advise all parties of a potential conflict of interest
- D. Provide an assessment that is timely and accurate despite the personal relationship
Answer: C
NEW QUESTION # 47
Which one of the following statements with respect to ethics is correct?
- A. Good ethics stems from formal education
- B. Ethics and laws are not closely related
- C. One may act legally and still be acting unethically
- D. Every organization that follows the law is ethical
Answer: C
NEW QUESTION # 48
As the number of stocks in a portfolio increases, unsystematic risk
- A. increases, and systematic risk increases
- B. increases, and systematic risk does not change
- C. decreases and systematic risk decreases
- D. decreases and systematic risk does not change
Answer: D
NEW QUESTION # 49
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 # 50
A corporation's financial analyst has identified four potential protects that ate mutually exclusive. Each protect will produce a constant annual cash flow for years 1 through 4, and have an initial investment at time 0 shown below. If the corporation has a weighted average cost of capital of 10%, which project should be selected?
- A. Protect 4
- B. Protect 1
- C. Protect 2
- D. Protect 3
Answer: A
NEW QUESTION # 51
A market in which no organized physical exchange exists is referred as a(n)
- A. over-the-counter market
- B. primary market
- C. efficient market
- D. secondary market
Answer: A
NEW QUESTION # 52
A manufacturing company is reviewing the budget for one of its component parts for next year based on the need for 5.000 units.
The company receives a bid from a supplier offering lo provide (lie needed component for a price of $115 per unit The company is deciding whether to make or buy the component What decision should the firm make if (1) the fixed facilities costs can be avoided or (2) if the fixed facilities costs cannot be avoided If purchasing from the supplier?
- A. (1) Buy; (2) Make
- B. (1) Make; (2) Make
- C. (1) Make; (2) Buy
- D. (1) Buy; (2) Buy
Answer: B
NEW QUESTION # 53
Sunnyvale Gas Company had a $50 million issue of 30-year mortgage bonds issued at par 10 years ago The coupon rate on the bonds is 15% and Interest is payable semi-annually on March 1 and September 1. The bonds are currently trading at SI 300. The can provision of the issue states that the bonds are callable after the S-year deferral period at 108 plus accrued interest. If Sunnyvale calls the bonds effective June 1 what is the cash payment, ignoring taxes, to the bondholders?
- A. $51875 000
- B. $55 875 000
- C. $66,875,000
- D. $57 750 000
Answer: D
NEW QUESTION # 54
All of the following describe ethical leaders except
- A. dedicated leaders who can keep promises and commitment
- B. flexible leaders how new ethical behavior to be negotiable
- C. leaders who demonstrate high ethical standards
- D. supportive leaders who encourage employees to adhere to company policy
Answer: B
NEW QUESTION # 55
Determine whether me €300 fee is a facilitating payment
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
The 300 is a facilitating payment as it will speed up the process of getting the license 'cine company which normally requites 6 months
NEW QUESTION # 56
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