Financial Certified Management Accountant CMA Dumps in PDF

Free Financial CMA Real Questions (page: 44)


Details: Risk Analysis and Real Options 20

Book rate of return is an unsatisfactory guide to selecting capital projects because

I). It uses accrual accounting numbers.
II). It compares a single project against the average of capital projects.
Ill). It uses cash flows to gauge the desirability of the project.

  1. l only.
  2. l & ll.
  3. Ill only.
  4. l, II,& III.

Answer(s): B

Explanation:

A common misstep in regard to capital budgeting is the temptation to gauge the desirability of a project by using accrual accounting numbers instead of cash flows. Net income and book value are affected by the company's choices of accounting methods. A project's true rate of return cannot be dependent on bookkeeping decisions. Another distortion inherent in comparing a single project's book rate of return to the current one for the company as a whole is that the latter is an average of all of a firm's capital projects. Embedded in that average number may be a handful of good projects making up for a large number of poor investments.




Details: Risk Analysis and Real Options 20

The maximum benefit forgone by using a scarce resource for a given purpose and not for the next-best alternative is called

  1. Opportunity cost.
  2. Sunk cost.
  3. Incremental cash flow.
  4. Net initial investment.

Answer(s): A

Explanation:

An opportunity' cost is the maximum benefit forgone by using a scarce resource for a given purpose and not for the next-best alternative. In capital budgeting, the most basic application of this concept is the desire to place the company's limited funds in the most promising capital project(s).




Details: Risk Analysis and Real Options 20

Post-investment audits

  1. Complete a stage in the capital budgeting process.
  2. Serve as a control mechanism.
  3. Allow the outcome of a project to be evaluated as soon as possible.
  4. Deter managers from proposing profitable investments.

Answer(s): B

Explanation:

Post-investment audits should be conducted to serve as a control mechanism and to deter managers from proposing unprofitable investments. Actual-to-expected cash flow comparisons should be made, and unfavorable variances should be explained. Individuals who supplied unrealistic estimates should have to explain differences.




Details: Risk Analysis and Real Options 20

The accounting rate of return

  1. Is synonymous with the internal rate of return.
  2. Focuses on income as opposed to cash flows.
  3. Is inconsistent with the divisional performance measure known as return on investment.
  4. Recognizes the time value of money.

Answer(s): B

Explanation:

The accounting rate of return (also called the unadjusted rate of return or book value rate of return) is calculated by dividing the increase in accounting net income by the required investment. Sometimes the denominator is the average investment rather than the initial investment. This method ignores the time value of money and focuses on income as opposed to cash flows.




Details: Risk Analysis and Real Options 20

When using the net present value method for capital budgeting analysis1 the required rate of return is called all of the following except the

  1. Risk-free rate.
  2. Cost of capital.
  3. Discount rate.
  4. Cutoff rate.

Answer(s): A

Explanation:

The rate used to discount future cash flows is sometimes called the cost of capital, the discount rate, the cutoff rate, or the hurdle rate. A risk1ree rate is the rate available on risk-free investments such as government bonds. The risk-free rate is not equivalent to the cost of capital because the latter must incorporate a risk premium.



Share your comments for Financial CMA exam with other users:

M
Manasa
12/5/2023 3:15:00 AM

are these really financial cloud questions and answers, seems these are basic admin question and answers

N
Not Robot
5/14/2023 5:33:00 PM

are these comments real

K
kriah
9/4/2023 10:44:00 PM

please upload the latest dumps

E
ed
12/17/2023 1:41:00 PM

a company runs its workloads on premises. the company wants to forecast the cost of running a large application on aws. which aws service or tool can the company use to obtain this information? pricing calculator ... the aws pricing calculator is primarily used for estimating future costs

M
Muru
12/29/2023 10:23:00 AM

looks interesting

T
Tech Lady
10/17/2023 12:36:00 PM

thanks! that’s amazing

M
Mike
8/20/2023 5:12:00 PM

the exam dumps are helping me get a solid foundation on the practical techniques and practices needed to be successful in the auditing world.

N
Nobody
9/18/2023 6:35:00 PM

q 14 should be dmz sever1 and notepad.exe why does note pad have a 443 connection

M
Muhammad Rawish Siddiqui
12/4/2023 12:17:00 PM

question # 108, correct answers are business growth and risk reduction.

E
Emmah
7/29/2023 9:59:00 AM

are these valid chfi questions

M
Mort
10/19/2023 7:09:00 PM

question: 162 should be dlp (b)

E
Eknath
10/4/2023 1:21:00 AM

good exam questions

N
Nizam
6/16/2023 7:29:00 AM

I have to say this is really close to real exam. Passed my exam with this.

P
poran
11/20/2023 4:43:00 AM

good analytics question

A
Antony
11/23/2023 11:36:00 AM

this looks accurate

E
Ethan
8/23/2023 12:52:00 AM

question 46, the answer should be data "virtualization" (not visualization).

N
nSiva
9/22/2023 5:58:00 AM

its useful.

R
Ranveer
7/26/2023 7:26:00 PM

Pass this exam 3 days ago. The PDF version and the Xengine App is quite useful.

S
Sanjay
8/15/2023 10:22:00 AM

informative for me.

T
Tom
12/12/2023 8:53:00 PM

question 134s answer shoule be "dlp"

A
Alex
11/7/2023 11:02:00 AM

in 72 the answer must be [sys_user_has_role] table.

F
Finn
5/4/2023 10:21:00 PM

i appreciated the mix of multiple-choice and short answer questions. i passed my exam this morning.

A
AJ
7/13/2023 8:33:00 AM

great to find this website, thanks

C
Curtis Nakawaki
6/29/2023 9:11:00 PM

examination questions seem to be relevant.

U
Umashankar Sharma
10/22/2023 9:39:00 AM

planning to take psm test

E
ED SHAW
7/31/2023 10:34:00 AM

please allow to download

A
AD
7/22/2023 11:29:00 AM

please provide dumps

A
Ayyjayy
11/6/2023 7:29:00 AM

is the answer to question 15 correct ? i feel like the answer should be b

B
Blessious Phiri
8/12/2023 11:56:00 AM

its getting more technical

J
Jeanine J
7/11/2023 3:04:00 PM

i think these questions are what i need.

A
Aderonke
10/23/2023 2:13:00 PM

helpful assessment

T
Tom
1/5/2024 2:32:00 AM

i am confused about the answers to the questions. do you know if the answers are correct?

V
Vinit N.
8/28/2023 2:33:00 AM

hi, please make the dumps available for my upcoming examination.

S
Sanyog Deshpande
9/14/2023 7:05:00 AM

good practice

AI Tutor 👋 I’m here to help!