CMA-Strategic-Financial-Management Exam Dumps - IMA CMA Certification Questions and Answers

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Questions 4

Southwest Supplies Inc. (SSI) is considering the following two projects with cash-flows discounted at SSI's weighted average cost of capital.

SSI can only afford to invest in one of the projects. Which statement would most likely explain why SSI would choose Project B over project A?

Options:

Project B results in a higher cumulative accounting income

Project B generates significantly more non-cash expenses

Project B cash-flows are relatively more certain

Project B cash-flows are to be received sooner

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Questions 5

A capital budgeting analysis involves an initial investment of $500. The expected cash inflow in Year 1 is $300, and the expected cash inflow in Year 2 is $350. Which one of the following equations can get the correct internal rate of return (IRR) of this project?

Options:

$500 = $300/(1 + IRR) + $350/(1 + IRR)

$500 = $300/(1 + IRR) + $350/(1 + IRR)2

-$500 = $300'(1 + IRR) + 5350/(1 + IRR)2

$0 = $300/(1 + IRR) + $350/11 + IRR)2

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Questions 6

Management is responsible for identifying potential events mat could represent opportunities or threats. Which one of the following is not a viable event identification technique?