ETS MAJOR FIELD TEST - MBA EXAM
QUESTIONS AND ANSWERS 2025
Which,of,the,following,organizations,is,most,likely,to,use,project,financing?,-,ans-
✔✔A,large,public,utility,involved,in
infrastructure,development
After,an,extensive,recruitment,process,to,select,well-
qualified,individuals,,a,large,percent,ofa,company's,new,hires,resigned,within,the,first,mont
h,of,the,job.,Which,of,the,following,is,the,most,likely,explanation,for,this,situation?,-,ans-
✔✔The,training,process,to,prepare,the,new,hires,for,their,assigned,tasks,was,inadequate.
Prosco,Ltd.,employs,a,process,cost,system.,Inspection,of,units,occurs,at,the,50,percent,m
ark.,Defective,units,are,then,removed,from,the,process,,and,their,cost,
($4.50),is,absorbed,by,the,good,units.,Prosco,has,recently,been,approached,by,a,firm,wish
ing,to,buy,the,defective,units,for,a,special,use.,The,firm,would,require,Prosco,to,modify,the,
defective,units,at,a,unit,cost,of,$2.00.,If,Prosco,sells,the,defective,units,to,the,firm,for,
$5.00,each,,how,would,Prosco's,reported,income,be,affected?,-,ans-
✔✔It,would,increase,by,$3.00,per,unit,sold.
Some,companies,have,little,,if,any,,net,income,or,earnings,,yet,they,seem,to,have,all,the,m
oney,they,need,for,capital,expenditures.,Which,of,the,following,best,explains,how,such,co
mpanies,operate?,-,ans-✔✔They,have,good,cash,flows
The,Sintar,Corporation,has,just,announced,that,it,will,pay,
$1.10,per,share,in,dividends,to,its,stockholders,in,the,current,quarter.,The,prior,quarter's,di
vidend,was,$1.00,per,share.,The,announcement,indicates,which,of,the,following?,-,ans-
✔✔Management,is,sending,a,signal,that,the,company,has,good,projected,future,earnings
Wave,Inc.,is,a,telecommunications,company,that,wants,to,become,involved,in,e-
commerce.,It,has,to,decide,whether,to,develop,a,business-to-business,or,business-to-
consumer,strategy.,As,Wave's,strategic,planner,,you,have,been,asked,to,develop,a,busine
ss,plan,for,each,opportunity,and,present,these,to,senior,management.,The,answer,to,whic
h,of,the,following,questions,is,most,important,to,know,before,starting,your,plan?,-,ans-
✔✔What,are,the,company's,core,competencies?
, If,you,were,the,holder,of,a,call,option,(having,cost,you,
$2),on,some,stock,with,an,exercise,price,of,
$20,,it,would,be,best,for,you,to,exercise,your,option,when,the,market,price,is,at,-,ans-
✔✔$24
Increased,globalization,and,technological,change,,particularly,in,telecommunications,,ena
ble,more,organizations,to,adopt,which,of,the,following,organizational,structures?,-,ans-
✔✔Network
A,new,local,Super,Store,publicly,announced,that,when,more,than,three,people,are,standin
g,in,line,at,cash,registers,,additional,checkout-
lines,will,be,opened.,After,the,announcement,,customers,quickly,noticed,that,the,additiona
l,lines,were,not,opened,until,six,or,seven,people,were,standing,in,line.,This,indicates,a,gap,
between,-,ans-✔✔actual,service,delivery,and,how,service,quality
was,communicated
All,of,the,following,can,be,considered,in,the,evaluation,of,a,business,unit,EXCEPT,-,ans-
✔✔projected,annual,revenues,of,competitors
The,sales,division,of,a,corporation,is,considering,an,internal,product,transfer,because,of,e
xcess,demand.,What,is,the,lowest,acceptable,transfer,price,for,the,product?,-,ans-
✔✔The,difference,between,the,market,price,and,the,costs,recaptured,by,transferring,inter
nally
Which,security,makes,the,most,prudent,investment?,-,ans-✔✔Y
The,building,rents,arise,from,long-
term,leases,that,cannot,be,cancelled.,If,The,Mart,closed,down,this,division,,what,would,be,
the,increase,in,company,profits?,-,ans-✔✔1,200,000
Using,manufacturing-
based,criteria,to,measure,product,quality,,which,of,the,following,should,you,monitor,on,a,re
gular,basis?,-,ans-✔✔The,conformance,of,the,finished,product,to,agreed-
to,product,specifications
The,common,stock,of,ABC,,Inc.,has,a,current,market,price,of,
$52,per,share.,Dividends,have,been,
$5,a,share,for,several,years,and,are,not,expected,to,change.,The,dividend,yield,of,the,stoc
k,of,comparable,companies,is,10%.,Which,recommendation,would,you,make,regarding,A
BC,,Inc.,stock?,-,ans-✔✔Don't,purchase,for,more,than,$50,per,share.
Increasing,a,regular,quarterly,dividend,payment,may,indicate,which,of,the,following,about,
a,corporation?
I.,Improved,earnings,prospects,for,the,firm,
II.,A,reduction,in,agency,problems,of,free
cash,flow
QUESTIONS AND ANSWERS 2025
Which,of,the,following,organizations,is,most,likely,to,use,project,financing?,-,ans-
✔✔A,large,public,utility,involved,in
infrastructure,development
After,an,extensive,recruitment,process,to,select,well-
qualified,individuals,,a,large,percent,ofa,company's,new,hires,resigned,within,the,first,mont
h,of,the,job.,Which,of,the,following,is,the,most,likely,explanation,for,this,situation?,-,ans-
✔✔The,training,process,to,prepare,the,new,hires,for,their,assigned,tasks,was,inadequate.
Prosco,Ltd.,employs,a,process,cost,system.,Inspection,of,units,occurs,at,the,50,percent,m
ark.,Defective,units,are,then,removed,from,the,process,,and,their,cost,
($4.50),is,absorbed,by,the,good,units.,Prosco,has,recently,been,approached,by,a,firm,wish
ing,to,buy,the,defective,units,for,a,special,use.,The,firm,would,require,Prosco,to,modify,the,
defective,units,at,a,unit,cost,of,$2.00.,If,Prosco,sells,the,defective,units,to,the,firm,for,
$5.00,each,,how,would,Prosco's,reported,income,be,affected?,-,ans-
✔✔It,would,increase,by,$3.00,per,unit,sold.
Some,companies,have,little,,if,any,,net,income,or,earnings,,yet,they,seem,to,have,all,the,m
oney,they,need,for,capital,expenditures.,Which,of,the,following,best,explains,how,such,co
mpanies,operate?,-,ans-✔✔They,have,good,cash,flows
The,Sintar,Corporation,has,just,announced,that,it,will,pay,
$1.10,per,share,in,dividends,to,its,stockholders,in,the,current,quarter.,The,prior,quarter's,di
vidend,was,$1.00,per,share.,The,announcement,indicates,which,of,the,following?,-,ans-
✔✔Management,is,sending,a,signal,that,the,company,has,good,projected,future,earnings
Wave,Inc.,is,a,telecommunications,company,that,wants,to,become,involved,in,e-
commerce.,It,has,to,decide,whether,to,develop,a,business-to-business,or,business-to-
consumer,strategy.,As,Wave's,strategic,planner,,you,have,been,asked,to,develop,a,busine
ss,plan,for,each,opportunity,and,present,these,to,senior,management.,The,answer,to,whic
h,of,the,following,questions,is,most,important,to,know,before,starting,your,plan?,-,ans-
✔✔What,are,the,company's,core,competencies?
, If,you,were,the,holder,of,a,call,option,(having,cost,you,
$2),on,some,stock,with,an,exercise,price,of,
$20,,it,would,be,best,for,you,to,exercise,your,option,when,the,market,price,is,at,-,ans-
✔✔$24
Increased,globalization,and,technological,change,,particularly,in,telecommunications,,ena
ble,more,organizations,to,adopt,which,of,the,following,organizational,structures?,-,ans-
✔✔Network
A,new,local,Super,Store,publicly,announced,that,when,more,than,three,people,are,standin
g,in,line,at,cash,registers,,additional,checkout-
lines,will,be,opened.,After,the,announcement,,customers,quickly,noticed,that,the,additiona
l,lines,were,not,opened,until,six,or,seven,people,were,standing,in,line.,This,indicates,a,gap,
between,-,ans-✔✔actual,service,delivery,and,how,service,quality
was,communicated
All,of,the,following,can,be,considered,in,the,evaluation,of,a,business,unit,EXCEPT,-,ans-
✔✔projected,annual,revenues,of,competitors
The,sales,division,of,a,corporation,is,considering,an,internal,product,transfer,because,of,e
xcess,demand.,What,is,the,lowest,acceptable,transfer,price,for,the,product?,-,ans-
✔✔The,difference,between,the,market,price,and,the,costs,recaptured,by,transferring,inter
nally
Which,security,makes,the,most,prudent,investment?,-,ans-✔✔Y
The,building,rents,arise,from,long-
term,leases,that,cannot,be,cancelled.,If,The,Mart,closed,down,this,division,,what,would,be,
the,increase,in,company,profits?,-,ans-✔✔1,200,000
Using,manufacturing-
based,criteria,to,measure,product,quality,,which,of,the,following,should,you,monitor,on,a,re
gular,basis?,-,ans-✔✔The,conformance,of,the,finished,product,to,agreed-
to,product,specifications
The,common,stock,of,ABC,,Inc.,has,a,current,market,price,of,
$52,per,share.,Dividends,have,been,
$5,a,share,for,several,years,and,are,not,expected,to,change.,The,dividend,yield,of,the,stoc
k,of,comparable,companies,is,10%.,Which,recommendation,would,you,make,regarding,A
BC,,Inc.,stock?,-,ans-✔✔Don't,purchase,for,more,than,$50,per,share.
Increasing,a,regular,quarterly,dividend,payment,may,indicate,which,of,the,following,about,
a,corporation?
I.,Improved,earnings,prospects,for,the,firm,
II.,A,reduction,in,agency,problems,of,free
cash,flow
