MBA ETS Exam with Verified 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 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 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 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 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. - Correct Answers -(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 Answers -(A) They have good cash
flows.
Given the potential for negative publicity in
serving the student market, which of the
following would NOT be an appropriate
marketing communication tool for Bertha to use
to minimize this potential?
(A) A press release stating the extent of the
services provided by Sunny Fun
Destinations
(B) A reorganization of Sunny Fun Destinations'
staff in which specific employees are
charged with overseeing the student tour
market
(C) A press conference to let the public know
about the new student tours
(D) Detailed information on the student tour in
advertisements - Correct Answers -(B) A reorganization of Sunny Fun Destinations'
staff in which specific employees are
charged with overseeing the student tour
market
ZAPPY is a manufacturer of hand-held game
cartridges. It divides its market into three main market
segments: the Americas, Europe, and Asia. Financial
information for this fiscal year is presented below.
Americas Europe Asia
Sales $100,000 $70,000 $90,000
Variable costs 60,000 42,000 54,000
Contribution
margin $40,000 $28,000 $36,000
Direct fixed costs 5,000 4,000 3,000
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 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 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 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. - Correct Answers -(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 Answers -(A) They have good cash
flows.
Given the potential for negative publicity in
serving the student market, which of the
following would NOT be an appropriate
marketing communication tool for Bertha to use
to minimize this potential?
(A) A press release stating the extent of the
services provided by Sunny Fun
Destinations
(B) A reorganization of Sunny Fun Destinations'
staff in which specific employees are
charged with overseeing the student tour
market
(C) A press conference to let the public know
about the new student tours
(D) Detailed information on the student tour in
advertisements - Correct Answers -(B) A reorganization of Sunny Fun Destinations'
staff in which specific employees are
charged with overseeing the student tour
market
ZAPPY is a manufacturer of hand-held game
cartridges. It divides its market into three main market
segments: the Americas, Europe, and Asia. Financial
information for this fiscal year is presented below.
Americas Europe Asia
Sales $100,000 $70,000 $90,000
Variable costs 60,000 42,000 54,000
Contribution
margin $40,000 $28,000 $36,000
Direct fixed costs 5,000 4,000 3,000
