IMA CMA Part 2: Strategic Financial Management Sample Questions:

1. L&H Sports owns and operates several stadiums used for baseball and soccer games Management is considering installing machines that would be used to roast peanuts on the premises. This equipment would allow L&H to sell freshly roasted peanuts rather than the pre-roasted peanuts that are currently sold Marketing studies suggest that this feature would increase peanut sales.
The roasters can be purchased in several sizes, and the annual rental fees and operating costs vary with the size of the roaster Information about the roasters is shown below.

L&H currently sells pre-roasted peanuts for $0 60 pet bag. Management plans to sell the freshly roasted peanuts for a higher price but at no more than a 10% increase. The demand for freshly roasted peanuts is estimated to be 250, 000 bags pet year. Which roaster should L&H purchase to maximize its profit?

A) Regular
B) Super
C) Economy

2. All of the following describe ethical leaders except

A) dedicated leaders who can keep promises and commitment
B) supportive leaders who encourage employees to adhere to company policy
C) flexible leaders how new ethical behavior to be negotiable
D) leaders who demonstrate high ethical standards

3. Amy Curtin sells used cars of a reliable bona Curtin has no knowledge of me history or any or the specific cars She believes that the brand is reliable, and is considering whether it is acceptable to offer only this general Information rather than specific information regarding me cars when trying to complete each sale The company has always preferred to make the sale and worry about any warranty issues later and there are no legal disclosure requirements in their jurisdiction Curtin considers herself to be an ethical person but she does not want to lose out on any potential sales of vehicles that are most likely in good mechanical condition Which one of the following statements best represents what Curtin should consider related to the meaning of ethics?

A) Ethics is about being consistent with the ethical tone set by the organization
B) Ethics is about the integrity of the decision making process to resolve issues
C) Ethics is about decisions where the relevant policies are informal and not documented
D) Ethics is driven by compliance with a set of regulations or laws

4. 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) An increase in the output of the manufactured product
B) An increase in the selling price of the manufactured product
C) A selling price where marginal revenue equals marginal cost
D) An increase m the net profits for each of the individual cartel members

5. 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) Acquiring a subsidiary and consolidating for year-end financial statements.
B) Changing its inventory method from LIFO to weighted average.
C) Purchase back some of its common stock during the year.
D) Creating a separate entity to purchase a needed machine and leasing it from this entity.

Solutions: