MGRADES
ETS MFT MBA UPDATED ACTUAL
Exam Questions and CORRECT Answers
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 ANSWER - (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 hires 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
ANSWER - (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 good 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 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?
(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
, MGRADES
(D) It would increase by $5.00 per unit sold. - CORRECT ANSWER - (C) 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 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 ANSWER - (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 of 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 future 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 ANSWER - (B) 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 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?
ETS MFT MBA UPDATED ACTUAL
Exam Questions and CORRECT Answers
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 ANSWER - (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 hires 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
ANSWER - (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 good 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 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?
(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
, MGRADES
(D) It would increase by $5.00 per unit sold. - CORRECT ANSWER - (C) 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 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 ANSWER - (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 of 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 future 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 ANSWER - (B) 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 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?
