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NEW QUESTION 40
Identify and explain two risks that Guda may face after it acquires Blue Moon.
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
The risk is that they don't have experience of real estate industry so the board will not be able to materializes we synergies expected and there is a risk that the property industry might also face a decline and hence the Benefits, expected win not be received.
NEW QUESTION 41
Marlow Company s partial balance sheet indicated the following.
- A. 0.51
- B. 2.08
- C. 1.96
- D. 1.58
Answer: D
NEW QUESTION 42
if a company increases the price of its product from $3010 $35, demand would decrease from 30, 000 units to
20.000 units. What is the price elasticity of demand for the company using the midpoint formula?
- A. 0.4
- B. 0.5
- C. 2.0
- D. 2.7
Answer: D
NEW QUESTION 43
The best discount rate to the use for evaluate of investment opportunities is the
- A. risk-free interest rate
- B. cost of the company's debt
- C. opportunity cost of capital
- D. average market interest rate
Answer: C
NEW QUESTION 44
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 net present value (NPV) is $31,022.
- B. She should not undertake this protect because the net present value (NPV) is ($3.157)
- C. She should undertake this project because the present value (PV) of this project is $146,843
- D. She should not undertake this project because the net present value NPV is ($14.051).
Answer: D
NEW QUESTION 45
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) Make; (2) Buy
- B. (1) Buy; (2) Buy
- C. (1) Make; (2) Make
- D. (1) Buy; (2) Make
Answer: C
NEW QUESTION 46
FreeRide inc is considering replacing its existing shuttle bus win a new one. The new bus can offer considerable savings in operating costs Information about the existing bus and the new bus is shown below.
- A. current salvage value of the existing bus
- B. accumulated depreciation of the existing bus
- C. annual operating cost of the new bus
- D. original cost of the new bus.
Answer: B
NEW QUESTION 47
Which one of the following statements regarding working capital management is not correct?
- A. Increasing costs associated with the manufacture and sale of products will not impact the short-term management of working capital
- B. The cash, inventory accounts payable and accounts receivable components of working capital are constantly changing during the operating cycle
- C. Seasonal demand for me products can cause working capital problems that must De anticipated and managed
- D. An attempt to minimize carrying costs and shortage costs associated with inventory levels is an objective of working capital management
Answer: A
NEW QUESTION 48
Selected data for Bittner, inc is shown below (in thousands)
- A. 47.75%
- B. 4727%
- C. 52.73%
- D. 52.25%
Answer: B
NEW QUESTION 49
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 platters because the contribution margin per painting hour is higher
- C. The company should produce only platters because the variable cost per platter is lower
- D. The company should produce only bowls because the contribution margin per bowl is higher.
Answer: B
NEW QUESTION 50
Explain me concept of relevant cost in the season-making process and discuss whatever the €200, 000 course development coil is relevant to OLi's price decisions in future years 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
Relevant com is cost which is incurred in future and incremental because of the division and in terms of cash other costs are considered to be relevant while making a decision. The development cost is a past cost incurred before mating the decision and hence irrelevant.
NEW QUESTION 51
Clark inc, expects to incur the following selected costs an a new product being planned for introduction early next.
* Design an development costs of $100,000 that will be incurred this year.
* Marketing costs of $50,000 to be incurred %50 this year %50 year
* Manufacturing costs of $500,000 to be incurred next year.
* In addition to external market factors, the pricing decision should be based on cost. The product cost that should be used is
- A. $650, 000
- B. $500,000
- C. $525, 000
- D. $550,000
Answer: A
NEW QUESTION 52
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 53
Employee performance review and development systems must be fully aligned with the requirements for ethical conduct Ethical expectations should be included in
- A. competencies and job descriptions only
- B. competencies, only
- C. job descriptions only
- D. compliances, job descriptions and objectives
Answer: C
NEW QUESTION 54
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 acceptance
- B. Risk transfer
- C. Risk avoidance
- D. Risk reduction
Answer: D
NEW QUESTION 55
Identify the market structure in which OLI operates and explain how OLi's pricing is affected by this mantel structure 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 market is quite sensitive to prices as the change in price is affecting me demand However the company has less opportunity over here to increase the prices for its premium service as the customers would be willing to pay less and get the same service from the competitor.
NEW QUESTION 56
All of the following describe ethical leaders except
- A. flexible leaders how new ethical behavior to be negotiable
- B. dedicated leaders who can keep promises and commitment
- C. supportive leaders who encourage employees to adhere to company policy
- D. leaders who demonstrate high ethical standards
Answer: A
NEW QUESTION 57
The internal audit division of a company is investigating a potential fraud in the Accounts Payable department Someone in the department has been writing checks to fictitious vendors and collecting the cash The primary suspect Is an employee who has own with the company for twelve years and recently lost his Did for promotion to Director of Accounts Payable a position which would have given mm a 25% salary increase This employee has been heard complaining to several other employees in the department that he was cheated out of his raise. Which one of the following elements of the fraud triangle is this employee exhibiting?
- A. Rationalization
- B. Opportunity
- C. Pressure
- D. Motive
Answer: A
NEW QUESTION 58
Company A is concerned with its debt status and interested in analyzing how each one of the following activities might affect its to equity ratio. Assuming each activity is independent, which one of following activities is
- A. Creating a separate entity to purchase a needed machine and leasing it from this entity.
- B. Purchase back some of its common stock during the year.
- C. Acquiring a subsidiary and consolidating for year-end financial statements.
- D. Changing its inventory method from LIFO to weighted average.
Answer: C
NEW QUESTION 59
FumiSelf is a global manufacturer of consumer-assembled furniture with a business presence in nearly every country. The Vice President of Production was presented with the following information by the Vice President of Finance as of the end of the current quarter.
- A. North American division has the lowest days' sales in Inventory.
- B. African division is the most efficient in manage its inventory
- C. Asian division has the highest days' sales in inventory
- D. Europe division is the most inefficient in managing its inventory
Answer: D
NEW QUESTION 60
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. Communicate the existence of a constraint that might preclude responsible judgment
- B. Advise all parties of a potential conflict of interest
- C. Keep information confidential except when authorized By the relative
- D. Provide an assessment that is timely and accurate despite the personal relationship
Answer: B
NEW QUESTION 61
A corporation shows the following on its financial statements (in millions).
The corporation has a financial leverage ratio of
- A. 0.06
- B. 3.60
- C. 0.50
- D. 2.00
Answer: C
NEW QUESTION 62
Mow many student enrolments per year ate required for the new busmen English course to break, even at its current price? Snow your calculations 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
NEW QUESTION 63
A group of nations is considering me formation of a cartel associated with the manufacture and distribution of a product that they each export. Which one of the following outcomes would not be consistent with me formation of a carter?
- A. A selling price where marginal revenue equals marginal cost
- B. An increase in the selling price of the manufactured product
- C. An increase in the output of the manufactured product
- D. An increase m the net profits for each of the individual cartel members
Answer: C
NEW QUESTION 64
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