ETS MBA STUDY GUIDE EXAM
QUESTIONS AND ANSWERS
1.,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,-,ans-✔✔D
2.,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.,-,ans-✔✔A
3.,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.
(D),It,would,increase,by,$5.00,per,unit,sold.,-,ans-✔✔C
4.,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.,-,ans-✔✔A
5.,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.,-,ans-✔✔B
6.,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,
QUESTIONS AND ANSWERS
1.,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,-,ans-✔✔D
2.,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.,-,ans-✔✔A
3.,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.
(D),It,would,increase,by,$5.00,per,unit,sold.,-,ans-✔✔C
4.,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.,-,ans-✔✔A
5.,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.,-,ans-✔✔B
6.,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,
