CMA Exam Support Package Examination Essay Questions For Practice © Copyright 2010 By Institute of Certified Management Accountants Introduction The Institute of Certified Management Accountants (ICMA) is publishing this book of practice questions with answers to help you prepare for the CMA examination. Each question is referenced to the Content Specification Outline (CSO) and the Learning Outcome Statements (LOS). These questions are actual “retired” questions from the CMA exams
Words: 12894 - Pages: 52
available at: http://ssrn.com/abstract=1764024 The WACC Fallacy: The Real Effects of Using a Unique Discount Rate Abstract We document investment distortions induced by the use of a single discount rate within firms. According to textbook capital budgeting, firms should value any project using a discount rate determined by the risk characteristics of the project. If they use a unique company-wide discount rate, they overinvest (resp. underinvest) in divisions with a market beta higher (resp. lower)
Words: 18677 - Pages: 75
MGT 4430 Fall 10 Investment Detective 08 Fall Investment Detective MGT 4430 With the realization that capital resources are limited, a prioritization of proposed projects must be established. Although most of these projects may satisfy the requirements to accept a project, due to capital budget constraints a company must choose which project they might best benefit from after analyzing the data associated with each project. After looking at Exhibits 1-6 with analysis of each project’s
Words: 620 - Pages: 3
NC 27708, USA National Bureau of Economic Research, Cambridge, MA 02912, USA Received 2 August 1999; received in revised form 10 December 1999 Abstract We survey 392 CFOs about the cost of capital, capital budgeting, and capital structure. Large "rms rely heavily on present value techniques and the capital asset pricing model, while small "rms are relatively likely to use the payback criterion. A surprising number of "rms use "rm risk rather than project risk in evaluating new investments. Firms
Words: 27367 - Pages: 110
27708, USA National Bureau of Economic Research, Cambridge, MA 02912, USA Received 2 August 1999; received in revised form 10 December 1999 Abstract We survey 392 CFOs about the cost of capital, capital budgeting, and capital structure. Large "rms rely heavily on present value techniques and the capital asset pricing model, while small "rms are relatively likely to use the payback criterion. A surprising number of "rms use "rm risk rather than project risk in evaluating new investments. Firms
Words: 27368 - Pages: 110
from Operations Management for Competitive Advantage, Fundamental Financial & Managerial Accounting Concepts, and Business Law: Legal Environment, Online Commerce, Business Ethics, and International Issues. Week One: Managerial Accounting and Capital Budgeting Objective: Determine the present value of future cash flows from an investment. 1. Torvald's Hardware paid a contractor $45,000 to expand the store. The investment increased annual cash inflows by $8,000 per year six years. Torvald's has
Words: 2448 - Pages: 10
production and operations management or simply operations management. Operations management is the process by which goods and services are created. We find productive process in all kinds of organized activities. Operations management deals with decision making related to production processes to ensure that the resulting goods or services comply with the specifications, in the amounts and by the schedule required, and at the minimum cost PURPOSE OF THIS PAPER The purpose of this paper is to understand
Words: 3056 - Pages: 13
Capital Budgeting helps with the purchase of assets and expansion. Looking at the long term investment decisions will help determine the productivity6 level, cost, and future cash flow. The plan is to expand the low-calorie frozen, microwavable food company which is currently facing increased cost for the major ingredients of the product. This paper will outline a plan that managers in this company could follow in anticipation of raising prices when selecting pricing strategies for making the products
Words: 1567 - Pages: 7
Florida Keys Hospital Traditional Project Analysis This case is a traditional capital budgeting analysis that focuses on the issues of cash flow analysis, profitability and breakeven measures, inflation effects, and risk assessment and risk incorporation—issues that are common to most real asset investment decisions. You are required to develop a model to calculate the ambulatory surgery center’s net cash flows on the basis of estimated utilization, estimated charges, and other relevant data
Words: 493 - Pages: 2
FIN4801/101/0/2012 Advanced Financial Management FIN4801 YEAR COURSE Department of Finance, Risk Management and Banking Tutorial letter 101/0/2012 This tutorial letter contains important information about your module. Bar code CONTENTS 1 1.1 2 2.1 2.2 3 3.1 3.2 4 4.1 4.2 4.3 5 6 7 8 8.1 8.2 8.3 INTRODUCTION AND WELCOME ....................................................................................................... 3 Tutorial matter ...................................................
Words: 8325 - Pages: 34
