CompTIA
Checkpoint
ISC
HP
Dell
EC-Council
EXIN
Fortinet
ITIL®
Juniper
PMI
Microsoft
VMware
Avaya
Google
Salesforce
Amazon
Palo Alto Networks
Certiport
ISC2
All Vendors
  2. Home
  3. Exams
  4. Financial
  5. CMA

Free CMA Exam Braindumps (page: 190)

Page 190 of 336
PDF with 1336 Questions
View Related Case Study

Which one of the following statements is most likely to be true if a seller extends creditor a purchaser for a period of time longer than the purchaser's operating cycle?
The seller A will have a lower level of accounts receivable than those companies whose credit period is shorter than the purchaser's operating cycle.

  1. Will have a lower level of accounts receivable than those companies whose credit period is shorter than the purchaser's operating cycle.
  2. Is, in effect, financing more than just the purchaser's inventory needs.
  3. Can be certain that the purchaser will be able to convert the inventory into cash before payment is due.
  4. Has no need for a stated discount rate or credit period.

Answer(s): B

Explanation:

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.



View Related Case Study

Claus on, Inc. grants credit terms of 1/15. Net 30 and projects gross sales for next year of $2,000,000. The credit manager estimates that 40% of their customers pay on the discount date1 40% on the net due date, and 20% pay 15 days after the net due date. Assuming uniform sales and a 360-day year1 what is the projected days' sales outstanding (rounded to the nearest whole day)?

  1. 20 days.
  2. 24 days.
  3. 27 days.
  4. 30 days.

Answer(s): C

Explanation:

Given that 40% of sales will be collected on the 15th day, 40% on the 30th day, and 20% on the 45th day, the days' sales outstanding can be determined by weighting the collection period for each group of `receivables by its collection percentage. Hence, the projected days' sales outstanding equal 27 days [(40% x 15) ÷ (40% x 30) + (20% x 45)].



View Related Case Study

Management of a firm does not want to violate a working capital restriction contained in its bond indenture. If the firm's current ratio falls below 2.0 to 1, technically it will have defaulted. The firm's current ratio is now 2.2 to 1. If current liabilities are $200 million, the maximum new commercial paper that can be issued to finance inventory expansion is

  1. $20 million.
  2. $40 million.
  3. $240 million.
  4. $180 million.

Answer(s): B

Explanation:

If current liabilities are $200 million and the current ratio (current assets ÷ current liabilities) is 2.2, current assets must be $440 million (2.2 x $200 million). If X amount of commercial paper is issued to finance inventory (current assets), thereby increasing both current assets and current liabilities by, the level of current assets at which the new current ratio will be 2.0 is $480 million ($440 million + $40 million of commercial paper).



View Related Case Study

Determining the appropriate level of working capital for firm requires

  1. Evaluating the risks associated with various levels of fixed assets and the types of debt used to finance these assets.
  2. Changing the capital structure and dividend policy for the firm.
  3. Maintaining short-term debt at the lowest possible level because it is ordinarily more expensive than long-term debt.
  4. Offsetting the profitability of current assets and current liabilities against the probability of technical insolvency.

Answer(s): D

Explanation:

A company must maintain a level of working capital sufficient to pay bills as they come due. Failure to do so is technical insolvency and can result in involuntary bankruptcy. Unfortunately, holding current assets for purposes of paying bills is not profitable for a company because they usually offer a low return compared with longer-term investments. Thus, the skillful management of working capital requires a balancing of a firm's desire for profit with its need for adequate liquidity.



Page 190 of 336



Post your Comments and Discuss Financial CMA exam with other Community members:

nancy commented on March 16, 2024
Good to learn from here
INDIA
upvote

Tacy commented on October 18, 2023
Awesome content
Anonymous
upvote

Georgodino commented on April 29, 2021
The study package is helpful in passing your exam since the practice questions are copied from real exam. But in order to learn the modules in details you need books.
ARGENTINA
upvote

Joe commented on May 16, 2019
Just Bought it, will share result with you.
Anonymous
upvote

emad hamdy commented on May 03, 2019
great for passing not so good for learning. Just use it as cheat sheet.
UNITED STATES
upvote

Amer Alnajjar commented on March 11, 2019
Still the test is under process
Anonymous
upvote

Exam Passer commented on December 06, 2018
I wrote the exam yesterday and it was a great success. Good job guys.
UNITED ARAB EMIRATES
upvote

Muhannad commented on October 09, 2018
Easy way to download
Anonymous
upvote

Harshavardhan Yedla commented on October 02, 2017
good
UNITED STATES
upvote

James commented on February 23, 2017
Ok just downloaded this exam....looks pretty damn good to me..I think this will help me pass easily.
UNITED STATES
upvote

RYAN commented on December 24, 2016
I JUST BOUGHT THIS AND I WILL BE SURE IT IS HELPFUL!! I'LL LET YOU KNOW AFTER TAKING EXAM.
UNITED STATES
upvote

KT commented on December 17, 2016
I just bought the test bank. I will provide a feedback once I start going through it and studying.
UNITED STATES
upvote

Sachin commented on May 16, 2016
Seems to be a great Stuff. Needs to prepare for the exam and hope it will be very useful.
UNITED ARAB EMIRATES
upvote

Sairam Beeman commented on January 05, 2016
very bad. pdf e-book not downloading. Latest updated questions not available. Waste of money. Don't buy this product.
UNITED STATES
upvote

Mik commented on October 08, 2015
I have difficulties downloading the CMA material! I hope that the product is right. Could anyone help me in downloading this please?
JORDAN
upvote