IMANET-CMA Online Practice Questions and Answers

Correct Answer: A

The determination of organizational objectives is the first step in the planning process. A mission statement is a formal, written document that defines the organization's purpose in society, for example, to produce and distribute certain goods of high quality in a manner beneficial to the public, employees, shareholders, and other constituencies. Thus, a mission statement does not announce specific operating plans. It does not describe strategies for technological development, market expansion, or product differentiation because these are tasks for operating management.

Correct Answer: A

Feedforward control anticipates and prevents problems. Policies and procedures serve as feed-forward control because they provide guidance on how activity should be performed to best insure that an objective is achieved.

Correct Answer: D

The marketing organization should be able to implement the marketing plan. The following are types of marketing organizations: sales department only, sale department with some marketing functions, such as advertising and research, marketing department separate from sales; marketing and sales departments reporting to a vice-president of marketing and sales, the same, except that everyone is customer- and market-centered, and process and outcome organizations, with departments replaced by cross-disciplinary teams managed by process leaders.

Correct Answer: D

Governmental impediments to global competition are generally imposed for the announced purpose of protecting local firms and jobs and developing new industries. They also may have the effect of raising revenue. Examples of impediments are tariffs; duties; quotas; domestic content rules; preferences for local firms regarding procurement, taxes, RandD, labor regulations, and other operating rules; and laws (e.g., anti-bribery or tax) enacted by a national government that impede national firms from competing globally. These impediments are most belly when industries are `iewed as crucial

Correct Answer: A

Governmental impediments to global competition are general imposed for the announced purpose of protecting local firms and jobs and developing new industries. They also may have the effect of raising revenue. Examples of impediments are tariffs: duties: quotas: domestic content rules: preferences for local firms regarding procurement, taxes, RandD, labor regulations, and other operating rules: and laws (e.g.. anti-bribery or tax) enacted by a national government that impede national firms from competing globally. These impediments are most ,likely when industries are viewed as crucial

Correct Answer: B

The normal operating cycle is defined as the period from the acquisition of inventory to the collection of the account receivable. If trade credit is foray period longer than the normal operating cycle, the seller must therefore be financing more than just the purchase of inventory.

Correct Answer: C

Cash inflows for March would consist of 50% of March credit sales ($90 x 50% = 30% of February credit sales ($120 x 30% = $36), plus 20% of January credit sales ($100 x 20% = $20), plus sales for March of $18. Consequently, total collections equal $119,000.

Correct Answer: B

Payment by draft, a three-party instrument in which the drawer orders the drawer to pay money to the payee, is a means of slowing cash outflows. A check is the most common type of draft. Check float arises from the delay between expenditure and the clearing of the check through the banking system.

Correct Answer: B

Robert Kreisler [Management, 9th ed., Houghton-Mifflin (2004), page 268] states that "managerial problem solving consists of a four-step sequence: (1) identifying the problem, (2) generating alternative solutions,

(3) selecting a solution, and (4) implementing and evaluating the solution." In the first step, management determines what the actual situation is, what the desired situation is, and the reason for the difference.

Correct Answer: D

Correct Answer: A

A reverse stock split, like a regular stock split, should not change market capitalization. Thus, if there are 1/10 as many shares outstanding as previously, they should be worth 10 times as much. Thus, the price after the reverse split would be $13.75 (10 x $1375).

Correct Answer: B

To determine the amount of interest the lender will earn, the 3.5% discount rate is multiplied by the face amount of the Treasury bill. The interest on this Treasury bill is $3.50 ($100 x 3.5% x 1 year); thus, the purchase price is $96.50 ($100 - $3.5).

Correct Answer: C

When a firm borrows money from the bank, it is often required to keep a certain percentage of the funds in the bank at all times. These compensating balances effectively increase the rate of interest on the money borrowed from the bank.

Correct Answer: B

Avoidable costs are those that may be eliminated by not engaging in an activity or by performing it more efficiently.

Correct Answer: A

The breakeven point is the level of sales at which revenues equal the sum of variable and fixed costs. Consequently. the contribution margin equals fixed costs at the breakeven point. Because this relationship is true, the breakeven point in units sold can be determined by dividing fixed costs by the difference between unit selling price and unit variable cost (unit contribution margin)