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MFT- MBA Practice Questions and Answers with Solutions
UPDATED!!!
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
- 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.
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(D) The new hires lacked the basic skills required to learn the
job. - 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.
(D) It would increase by $5.00 per unit sold. - 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?
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(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. - 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. - ANSWER (B)
Management is sending a signal that the company has good
projected future earnings.
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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? -
ANSWER (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 - ANSWER (D) $24
MFT- MBA Practice Questions and Answers with Solutions
UPDATED!!!
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
- 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.
, Page |2
(D) The new hires lacked the basic skills required to learn the
job. - 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.
(D) It would increase by $5.00 per unit sold. - 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?
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(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. - 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. - ANSWER (B)
Management is sending a signal that the company has good
projected future earnings.
, Page |4
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? -
ANSWER (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 - ANSWER (D) $24
