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IMA CMA Part 2: Strategic Financial Management Sample Questions:
1. An organization s sol of values and code or ethics is an important consideration in human resource decisions for each of the following reasons except
A) an organization may not have a legal right to discharge a dishonest employee if such a code is not communicated
B) employees not motivated to adhere to a set of values may impact relationships wan other entities doing Business e organization.
C) failure to address the alignment or individual values and ethics with organizational expectations may have a negative impact on performance.
D) lack of a communicated set of values may create confusion and conflict among employees
2. 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) 2.7
C) 2.0
D) 0.5
3. Essentials inc. operates two segments. Segment A and Segment B information about the revenues and costs for Essentials tot the previous year (by segment) is shown below The above analysis shows that Segment A is not profitable if Segment A is dropped, the revenues associated with the account will be lost and the related variable costs win be eliminated Also, the space freed by this product line will be rented for $40.000. The operating profit (loss) after dropping Segment A will be
A) ($35,000)
B) $5,000
C) $50.000
D) $90.000
4. A corporation's board of directors has just declared its next regular quarterly cash dividend. The record date for this dividend will occur
A) before the payment date and after the ex-dividend date
B) before the ex-dividend date and after the payment date
C) after the ex-dividend date and after the payment date
D) before the ex-dividend date and before the payment date
5. Identify and describe two defenses Blue Moon could use if it does not wish to be acquired by Guda.
Essay
Food Depot Ltd, (FDL) is a privately-held company that provides catering services to airlines and operates several restaurant chains including fast food, casual dining, and fine dining restaurants, FDL has been profitable in recent years and has a very strong cash position. FDL's newest division. Food_TO-Go is an online meal ordering and delivery platform acquired by FDL two year ago.
In 20X7, sales for the entire company were $1 billion, with 50% of the business coming from the Airline Catering division. FDL is the country 's leading airline catering services provider and control 60% of the market share. However, the outlook of the airline catering industry is gloomy. The compound annual growth rate of the industry for the past five years was only 0.5% as airline networks have increasingly dropped catering on short domestic flights.
The Food-To-division only contribution 5% of FDL's total sales in 20X7 and is far behind in competing for marketing for market share of the online meal ordering and delivery industry, it is estimated that Food-To-Go's sales were only 20% of the industry leader's sales. However, the outlook for the online meal ordering and delivery services industry is bright. The compound annual growth rate of the industry since it started three years ago was 50%. It is estimated the rapid growth of the industry will continue in the foreseeable future.
Susan Willey, the head of Food-To-Go, does not agree that the Airline Catering division is the best-performing division in the company. Wiley argues that ber division bad the highest ROI in 20X7, and it deserves more capital finding. FDL's requested rate of return is 12%. The selected financial data for the Airline Catering division and Food-To-Go division in 20X7 are as follow (in $ millions)
Solutions:
Question # 1 Answer: A | Question # 2 Answer: B | Question # 3 Answer: B | Question # 4 Answer: D | Question # 5 Answer: Only visible for members |