ETS MFT MBA QUESTIONS AND ANSWERS ALREADY
PASSED
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 consumerZgoods 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 Zjob.
Which of the following isZthe mostZlikely 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 indus
try.
(C) The starting salary for the new hires was not competitive withZthat 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 theZprocess,
and theirZcost ($4.50) is absorbed by the good units. Prosco has recently been approached by a firm wish
ing to buy the defective units for a special use. The firm would requireZProsco to modify the defective un
its at a unit costZof $2.00. If Prosco sells the defective units to the firm for $5.00 each, how would Prosc
o'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. - correctZanswer-
(C) It would increase by $3.00 per unit sold.
, Some companies have little, if any, netZincome 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 justZannounced that it will pay $1.10 per share in dividends to its stockholder
s in the current quarter. The prior quarter's dividend was $1.00 per share. The announcement indicates w
hich 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 fi
gure.
(D) The company has overextended itsZcash 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 inZe-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 andZpresent these to senior management. The answer to whichZof 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? - correct answer-(A) What are the company's core competencies?
If you wereZthe holder of aZcall 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
PASSED
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 consumerZgoods 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 Zjob.
Which of the following isZthe mostZlikely 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 indus
try.
(C) The starting salary for the new hires was not competitive withZthat 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 theZprocess,
and theirZcost ($4.50) is absorbed by the good units. Prosco has recently been approached by a firm wish
ing to buy the defective units for a special use. The firm would requireZProsco to modify the defective un
its at a unit costZof $2.00. If Prosco sells the defective units to the firm for $5.00 each, how would Prosc
o'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. - correctZanswer-
(C) It would increase by $3.00 per unit sold.
, Some companies have little, if any, netZincome 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 justZannounced that it will pay $1.10 per share in dividends to its stockholder
s in the current quarter. The prior quarter's dividend was $1.00 per share. The announcement indicates w
hich 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 fi
gure.
(D) The company has overextended itsZcash 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 inZe-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 andZpresent these to senior management. The answer to whichZof 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? - correct answer-(A) What are the company's core competencies?
If you wereZthe holder of aZcall 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
