ETS MAJOR FIELD TEST MBA SOLVED
CORRECTLY TO SCORE A+
Which of the following organizations is most likely to use project financing?
A. A small start-up
b. A financial services firm with an extensive client list
C. A large consumer goods company
D. A large public utility involved in infrastructure development CORRECT ANSWERS D.
A large public utility involved in infrastructure development
After an extensive recruitment process to select well-qualified individuals, a large
percent of a company's new hires resigned within the first month of the job. Which of the
following is the most likely explanation for this situation?
A. The training process to prepare the new hires for their assigned tasks was
inadequate.
B. The health benefits provided by the company were not competitive with those of the
rest of the industry.
C. The starting salary for the new hire was not competitive with that of the rest of the
industry.
D. The new hires lacked the basic skills required to learn the job. CORRECT
ANSWERS A. 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
mark. Defective units are then removed from the process, and their cost ($4.50) is
absorbed by the goods units. Prosco has recently been approached by a firm wishing to
buy the defective units for a special use. The firm would require Prosco to modify the
defective units at a cost unit of $2.00. If presco sells the defective units to the firm for
$5.00 each, how would Prosco's reported income be affected?
A. It would decrease by $4.50 per unit sold.
B. It would decrease by $ 1.50 per unit sold
C. It would decrease by $3.00 per unit sold
D. It would decrease by $5.00 per unit sold CORRECT ANSWERS C. It would decrease
by $3.00 per unit sold
Some companies have little, if any, net income or earnings, yet they seem to have all
the money they need for capital expenditures. Which of the following best explains how
such companies operate?
A. They have good cash flows.
B. They lease capital equipment that does not show up on balance sheets.
, C. They have accounts with many different banks.
D. They issue warrants to their officers. CORRECT ANSWERS A. 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 dividend was $1.00 per
share. The announcement indicates which if the following?
A. Management is sending a signal that it expects the economy to expand.
B. Management is sending a signal that the company has good projected earnings.
C. While the company was able to pay a higher dividend, management preferred a
more conservative figure.
D. The company has overextended its cash position and may have liquidity problems in
the future. CORRECT ANSWERS B. Management is sending a signal that the company
has good projected 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
business plan for each opportunity and present these to senior management. The
answer to which of the following questions is most important to know before starting
your plan?
A. What are the company's Core Competencies?
B. What is the potential market size?
C. What is the impact on the estimated revenue?
D. Does the company have e-commerce capabilities? CORRECT ANSWERS A. 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
A. $18
B. $20
C. $22
D $24 CORRECT ANSWERS D $24
Increased globalization and technological change, particularly in telecommunications,
enable more organizations to adopt which of the following organizational structures?
A. Functional
B. Matrix
C. Network
D Mechanistic CORRECT ANSWERS C. Network
CORRECTLY TO SCORE A+
Which of the following organizations is most likely to use project financing?
A. A small start-up
b. A financial services firm with an extensive client list
C. A large consumer goods company
D. A large public utility involved in infrastructure development CORRECT ANSWERS D.
A large public utility involved in infrastructure development
After an extensive recruitment process to select well-qualified individuals, a large
percent of a company's new hires resigned within the first month of the job. Which of the
following is the most likely explanation for this situation?
A. The training process to prepare the new hires for their assigned tasks was
inadequate.
B. The health benefits provided by the company were not competitive with those of the
rest of the industry.
C. The starting salary for the new hire was not competitive with that of the rest of the
industry.
D. The new hires lacked the basic skills required to learn the job. CORRECT
ANSWERS A. 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
mark. Defective units are then removed from the process, and their cost ($4.50) is
absorbed by the goods units. Prosco has recently been approached by a firm wishing to
buy the defective units for a special use. The firm would require Prosco to modify the
defective units at a cost unit of $2.00. If presco sells the defective units to the firm for
$5.00 each, how would Prosco's reported income be affected?
A. It would decrease by $4.50 per unit sold.
B. It would decrease by $ 1.50 per unit sold
C. It would decrease by $3.00 per unit sold
D. It would decrease by $5.00 per unit sold CORRECT ANSWERS C. It would decrease
by $3.00 per unit sold
Some companies have little, if any, net income or earnings, yet they seem to have all
the money they need for capital expenditures. Which of the following best explains how
such companies operate?
A. They have good cash flows.
B. They lease capital equipment that does not show up on balance sheets.
, C. They have accounts with many different banks.
D. They issue warrants to their officers. CORRECT ANSWERS A. 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 dividend was $1.00 per
share. The announcement indicates which if the following?
A. Management is sending a signal that it expects the economy to expand.
B. Management is sending a signal that the company has good projected earnings.
C. While the company was able to pay a higher dividend, management preferred a
more conservative figure.
D. The company has overextended its cash position and may have liquidity problems in
the future. CORRECT ANSWERS B. Management is sending a signal that the company
has good projected 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
business plan for each opportunity and present these to senior management. The
answer to which of the following questions is most important to know before starting
your plan?
A. What are the company's Core Competencies?
B. What is the potential market size?
C. What is the impact on the estimated revenue?
D. Does the company have e-commerce capabilities? CORRECT ANSWERS A. 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
A. $18
B. $20
C. $22
D $24 CORRECT ANSWERS D $24
Increased globalization and technological change, particularly in telecommunications,
enable more organizations to adopt which of the following organizational structures?
A. Functional
B. Matrix
C. Network
D Mechanistic CORRECT ANSWERS C. Network
