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NEW QUESTION 59
A corporation has $80 million in current assets comprised of $30 million in inventory and $50 million in cash and marketable securities it has current liabilities of $50 million. If the corporation purchases an additional $10 million in inventory with trade credit this would
- A. decrease its current ratio and decrease its quick ratio
- B. not change its current ratio and decrease its quick ratio
- C. increase its current ratio and increase its quick ratio
- D. not change its current ratio and not change its quick ratio
Answer: A
NEW QUESTION 60
Risk maps are used in companies' enterprise risk management system because risk maps
- A. compares the impact of a risk and the likelihood of occurrence to provide a qualitative assessment of the risk
- B. provide a quantitative tool that measures the probability of occurrence and the potential impact to calculate a potential loses
- C. rank risks Based on the potential loss that could occur it a risk were to materialize
- D. 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.
Answer: A
NEW QUESTION 61
A company's balance sheet information at the end of July is shown below (in$000s).
What is the company's financial leverage ratio?
- A. 1.69
- B. 3 74
- C. 2.45
- D. 3.89
Answer: A
NEW QUESTION 62
Discuss whether AMI should use a cost-based or a market-based pricing approach. Explain your answer.
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)
Answer:
Explanation:
See the explanation for the answer.
Explanation
It should continue using market based pricing as the bargaining power is with the company not with me customer the products they make are important for me customers and there is a few competition hence it is an opportunity for Item to charge a premium for their products.
NEW QUESTION 63
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)
Answer:
Explanation:
See the explanation for the answer.
Explanation
They can simply revalue their assets and hence ask for a higher price for their company or they are structure their financing structure by either issuing debts or reducing me equity by paying a special one off dividend.
NEW QUESTION 64
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. Provide an assessment that is timely and accurate despite the personal relationship
- D. Keep information confidential except when authorized By the relative
Answer: B
NEW QUESTION 65
The CFO at GameX, a handheld game manufacturer has asked a financial analyst to provide an analysis and evaluation of the company versus three of its competitors. The analyst prepared the following report.
Based or the analysis the analyst is justified to write in his evaluation mat in order to Improve its position in the market. GameX should
- A. reduce its debt load
- B. increase its inventory
Answer: A
NEW QUESTION 66
Using the dividend discount model, an analyst determines mat Beverly Company's equity is worth $80 per share. Beverly Company's required rate of return is 15% and the current risk-free rate is 5% assuming a 0% long-term growth rate, what is Beverly's estimated future annual dividend?
- A. $12.00
- B. $16.00
- C. $8.00
- D. $1.20
Answer: C
NEW QUESTION 67
A company is considering investing £1 million for a new machine. The new machine is expected to generate
£450,000 incremental before-tax operating cash inflows and £100.000 in additional depreciation expense for each of the next ten years. The company uses the same depreciation assumptions tor book and tax purposes. If the company's income tax rate is 30%, what is the change in the yearly after-tax cash flow from operations if the company invests in the new machine?
- A. £245,000
- B. £295, 000
- C. £345, 000
- D. £315,000
Answer: C
NEW QUESTION 68
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. original cost of the new bus.
- C. annual operating cost of the new bus
- D. accumulated depreciation of the existing bus
Answer: D
NEW QUESTION 69
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. before the ex-dividend date and before the payment date
- D. after the ex-dividend date and after the payment date
Answer: C
NEW QUESTION 70
Which one of the following moral philosophies states that the morality of an action is inherent and not based on the consequences of the action?
- A. Teleology
- B. Utilitarianism
- C. Deontology
- D. Relativism
Answer: C
NEW QUESTION 71
A market in which no organized physical exchange exists is referred as a(n)
- A. secondary market
- B. efficient market
- C. primary market
- D. over-the-counter market
Answer: D
NEW QUESTION 72
A co league claims that morality is usually perceived and interpreted differently by different people so there is no method to judge whether one decision is better than another. This is commonly referred to as
- A. moral relativism
- B. moral philosophy
- C. comparative ethics
- D. ethical relativity
Answer: A
NEW QUESTION 73
Genco Healthcare has asked ns controller to summarize the company's financial performance for the past two years. The accountant provided the following two years financial ratios for reference.
- A. Less liquid mote profitable more solvent
- B. More liquid, less profitable mote solvent
- C. Less liquid mote profitable less solvent
- D. More Liquid Less profitable less solvent
Answer: C
NEW QUESTION 74
A foreign subsidiary of a U S company has an intercompany loan from the parent company. Which one of the following statements about the subsidiary's functional currency is true?
- A. It should be determined by the management of the U.S. Company
- B. It should be the U S dollar if the local currency is hyper inflated
- C. It is the US dollar because the parent company is in the US
- D. It is the U S dollar because the subsidiary has an intercompany loan from the parent company
Answer: B
NEW QUESTION 75
Your organization is considering implementing an Enterprise Risk Management process. You expect to obtain many benefits from this process. Which of the following is not an expected Benefit?
- A. Aligning risk appetite and strategy
- B. Reducing operational surprises and losses
- C. Seizing opportunities.
- D. Eliminating risk response decisions
Answer: D
NEW QUESTION 76
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