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ETS MFT MBA EXAM QUESTIONS AND
CORRECT VERIFIED ANSWERS
Question 1: 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 Answer: (A) They have good cash flows.
Question 2: The Sintar Corporation has just announced that it will pay $1.10 per share in dividends to its stockholders in the current quarter. The prior quarter's dividend was $1.00 per share. The announcement indicates which 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 figure.(D) The company has overextended its cash 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.
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Question 3: Wave Inc. is a telecommunications company that wants to become
involved in e-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 and present these to senior management. The answer to which of 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?
Question 4: If you were the holder of a call 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
(B) $20
(C) $22
(D) $24
Correct Answer: (D) $24
Question 5: Increased globalization and technological change, particularly in
telecommunications, enable more organizations to adopt which of the following organizational structures?(A) Functional (B) Matrix (C) Network (D) Mechanistic
Correct Answer: (C) Network
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Question 6: A new local Super Store publicly announced that when more than
three people are standing in line at cash registers, additional checkout-lines will be opened. After the announcement, customers quickly noticed that the additional lines were not opened until six or seven people were standing in line.This indicates a gap between (A) customer expectation and management perception of customer expectation (B) management perception of customer expectation and service quality specifications (C) customer expectation and internal management communication (D) actual service delivery and how service quality was communicated
Correct Answer: (D) actual service delivery and how service quality was
communicated
Question 7: All of the following can be considered in the evaluation of a
business unit EXCEPT (A) wages paid to labor (B) projected annual revenues of competitors (C) the cost of materials used in the production process (D) the price at which goods produced are sold
Correct Answer: (B) projected annual revenues of competitors
Question 8: The sales division of a corporation is considering an internal
product transfer because of excess demand. What is the lowest acceptable transfer price for the product?(A) The amount that the company would have to pay to acquire a similar product (B) The variable cost of producing a unit of product (C) The full absorption cost of producing a unit of product
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(D) The difference between the market price and the costs recaptured by transferring internally
Correct Answer: (D) The difference between the market price and the costs
recaptured by transferring internally
Question 9: The Mart, a large retail chain, is considering whether or not to close down a division. The division's projected income statement for the next year
