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ETS MFT MBA EXAM 2025 BRAND
NEW ACTUAL EXAM WITH ANSWERS.
The sales division of a corporation is considering an internal
product transfer because of excess demand. What is the lowest
acceptable transfer price for the product?
(A) The amount that the company would have to pay to acquire a
similar product
(B) The variable cost of producing a unit of product
(C) The full absorption cost of producing a unit of product
(D) The difference between the market price and the costs
recaptured by transferring internally - correct answer -(D) The
difference between the market price and the costs recaptured by
transferring internally
The Mart, a large retail chain, is considering whether or not to
close down a division. The division's projected income statement
for the next year follows.
-Sales $20,000,000
-Cost of goods sold 17,000,000
-Gross profit 3,000,000
-Operating costs:
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-Building rents $2,500,000
-Store clerk salaries 3,000,000
-Store utilities 1,200,000
-Allocated home office cost 700,000
-Total operating costs 7,400,000
-Anticipated loss ($4,400,000)
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?
(A) $700,000
(B) $1,200,000
(C) $3,000,000
(D) $4,400,000 - correct answer -(B) $1,200,000
Using manufacturing-based criteria to measure product quality,
which of the following should you monitor on a regular basis?
(A) Customers' subjective perceptions of the reliability of the
product when in use
(B) The conformance of the finished product to agreed-to product
specifications
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(C) Objective, third-party tests of the performance of the product
(D) Warranty repair histories of the finished product - correct
answer -(B) 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 stock of
comparable companies is 10%. Which recommendation would
you make regarding ABC, Inc. stock?
(A) Purchase at $52 per share because that is a fair price.
(B) Purchase at $52 per share because the dividend yield will be
10.1%.
(C) Don't purchase, because the dividend yield will be only 2%.
(D) Don't purchase for more than $50 per share. - correct answer
-(D) 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
III. A reduction in tax payments for shareholders
(A) I only
(B) II only
ETS MFT MBA EXAM 2025 BRAND
NEW ACTUAL EXAM WITH ANSWERS.
The sales division of a corporation is considering an internal
product transfer because of excess demand. What is the lowest
acceptable transfer price for the product?
(A) The amount that the company would have to pay to acquire a
similar product
(B) The variable cost of producing a unit of product
(C) The full absorption cost of producing a unit of product
(D) The difference between the market price and the costs
recaptured by transferring internally - correct answer -(D) The
difference between the market price and the costs recaptured by
transferring internally
The Mart, a large retail chain, is considering whether or not to
close down a division. The division's projected income statement
for the next year follows.
-Sales $20,000,000
-Cost of goods sold 17,000,000
-Gross profit 3,000,000
-Operating costs:
, Page | 2
-Building rents $2,500,000
-Store clerk salaries 3,000,000
-Store utilities 1,200,000
-Allocated home office cost 700,000
-Total operating costs 7,400,000
-Anticipated loss ($4,400,000)
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?
(A) $700,000
(B) $1,200,000
(C) $3,000,000
(D) $4,400,000 - correct answer -(B) $1,200,000
Using manufacturing-based criteria to measure product quality,
which of the following should you monitor on a regular basis?
(A) Customers' subjective perceptions of the reliability of the
product when in use
(B) The conformance of the finished product to agreed-to product
specifications
, Page | 3
(C) Objective, third-party tests of the performance of the product
(D) Warranty repair histories of the finished product - correct
answer -(B) 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 stock of
comparable companies is 10%. Which recommendation would
you make regarding ABC, Inc. stock?
(A) Purchase at $52 per share because that is a fair price.
(B) Purchase at $52 per share because the dividend yield will be
10.1%.
(C) Don't purchase, because the dividend yield will be only 2%.
(D) Don't purchase for more than $50 per share. - correct answer
-(D) 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
III. A reduction in tax payments for shareholders
(A) I only
(B) II only
