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: 191)

Page 191 of 336
PDF with 1336 Questions
View Related Case Study

Since Marsh, Inc. is experiencing a sharp increase in sales activity and a steady increase in production, the management of Marsh has adopted an aggressive working capital policy. Therefore, the company's current level of net working capital

  1. Would most likely be the same as in any other type of business condition as business cycles tend to balance out overtime?
  2. Would most likely be lower than under other business conditions in order that the company can maximize profits while minimizing working capital investment.
  3. Would most likely be higher than under other business conditions so that there will be sufficient funds to replenish assets.
  4. Would most likely be higher than under other business conditions as the company's profits are increasing.

Answer(s): B

Explanation:

When a firm has an aggressive working capital policy, management keeps the investment in working capital at a minimum. Thus, a growing company would want to invest its funds in capital goods and not in idle assets. This policy maximizes return on investment at the price of the risk of minimal liquidity.



View Related Case Study

As a company becomes more conservative in its working capital policy, it would tend to have a(n)

  1. Decrease in its acid-test ratio.
  2. Increase in the ratio of current liabilities to concurrent liabilities.
  3. Increase in the ratio of current assets to units of output.
  4. Increase in funds invested in common stock and a decrease in funds invested in marketable securities.

Answer(s): C

Explanation:

A conservative working capital policy minimizes liquidity risk by increasing working capital (current assets -- current liabilities). The result is that the company forgoes the potentially higher returns available from using the additional working capital to acquire long-term assets. A conservative working capital policy is characterized by a higher current ratio (current assets + current liabilities) and acid-test ratio (quick assets + current liabilities). Thus, the company will increase current assets or decrease current liabilities. Conservative policy finances assets using long-term or permanent funds rather than short- term sources.



View Related Case Study

A man offers to buyyourcarwith4 equal annual payments of $3,000, beginning 2 years from today. Assuming you're indifferent to cash versus credit, that you can invest at 10%, and that you want to receive $9000 for the car, should you accept?

  1. Yes; present value is $9,510.
  2. Yes; present value is $11,373.
  3. No; present value is $8646.
  4. No; present value is $7461.

Answer(s): C

Explanation:

A normal present-value-of-an annuity table assumes the first payment is one year away. In this case, the first payment is two years away. Thus, this should be viewed as a five- payment annuity minus one payment. The factor at 10% for five payments is 3.791. Subtract from that the initial payment (year 1) which will not be made, a factor of .909, leaving a factor of 2.882. Multiplying 2.882 times $3,000 results in a present value of $8,646.



View Related Case Study

Stars Company has current assets of $400,000 and current liabilities of $300,000. Stars could increase its networking capital by the

  1. Prepayment of $50,000 of next year's rent.
  2. Refinancing of $50,000 of short-term debt with long-term debt.
  3. Acquisition of land valued at $50,000 through the issuance of common stock.
  4. Purchase of $50000 of trading securities for cash.

Answer(s): B

Explanation:

Networking capital is defined as the excess of current assets over current liabilities. Refinancing short-term debt with long-term debt decreases current liabilities with no effect on current assets, resulting 11in an increase in working capital.



Page 191 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