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IMA CMA Part 2: Strategic Financial Management Sample Questions:
1. How many units should be produced and sow it AMI'S target net income is $600,000? Snow your calculations.
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.
2. 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) Changing its inventory method from LIFO to weighted average.
B) Purchase back some of its common stock during the year.
C) Creating a separate entity to purchase a needed machine and leasing it from this entity.
D) Acquiring a subsidiary and consolidating for year-end financial statements.
3. 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 ex-dividend date and before the payment date
B) before the payment date and after the ex-dividend date
C) before the ex-dividend date and after the payment date
D) after the ex-dividend date and after the payment date
4. Each of the following describes a limitation of financial statement analysis except
A) it Is difficult to compare one company with another even within the same industry due to differences in accounting principles used.
B) financial statement analysis can use more than one measure to examine the interrelationships among data
C) financial statements may include significant estimated items which may distort results
D) financial statement analysis is based on historical costs rattier man current costs which can lead to distortions in measurement
5. Risk maps are used in companies' enterprise risk management system because risk maps
A) provide a quantitative tool that measures the probability of occurrence and the potential impact to calculate a potential loses
B) are a generic set of risks for the company's industry that can then be used as a foundation for further risk-identification techniques to specify the risks relevant for the company.
C) rank risks Based on the potential loss that could occur it a risk were to materialize
D) compares the impact of a risk and the likelihood of occurrence to provide a qualitative assessment of the risk
Solutions:
| Question # 1 Answer: Only visible for members | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: B | Question # 5 Answer: D |







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