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Exactprep CMA-Strategic-Financial-Management Questions

CMA Part 2: Strategic Financial Management Exam Questions and Answers

Question 5

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?

Options:

A.

It should be the U S dollar if the local currency is hyper inflated

B.

It should be determined by the management of the U.S. Company

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

Question 6

The internal audit division of a company is investigating a potential fraud in the Accounts Payable department Someone in the department has been writing checks to fictitious vendors and collecting the cash The primary suspect Is an employee who has own with the company for twelve years and recently lost his Did for promotion to Director of Accounts Payable a position which would have given mm a 25% salary increase This employee has been heard complaining to several other employees in the department that he was cheated out of his raise. Which one of the following elements of the fraud triangle is this employee exhibiting?

Options:

A.

Pressure

B.

Rationalization

C.

Motive

D.

Opportunity

Question 7

The production process of a company s main product yields a by-product Production costs or $700,000 are incurred during this process and $300,000 m additional costs are incurred to finalize the main product. The by-product can be sold for $200 000 without further processing A manager proposed the conversion of the by-product into another product that would cost $100,000 and generate revenue of $250,000. When deciding on this proposal the company should

Options:

A.

select an approbate cost allocation method to allocate the $1 100 000 joint costs

B.

evaluate whether other nonfinancial factors outweigh the Si 50.000 in incremental income

C.

treat the $100,000 conversion cost as the marginal cost 1o produce the new product

D.

ignore the $200 000 sales revenue for the by-product because it Is irrelevant

Question 8

Options:

A.

Utilitarianism

B.

Deontology

C.

Teleology

D.

Relativism