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NEW QUESTION 40 Assuming mere are no other imitations, should AMI accept the one-time order from a financial perspective? Explain your answer Essay Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below. Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company. Answer: ** Explanation: See the explanation for the answer. Explanation As the price offered is $1200 which is greater than the contribution per unit of $1000, the project should be accepted. It will increase the profits of me company by $100,000 (500 X $200)   **NEW QUESTION 41 Abex Employment Agency has requested an increase in the firm's line of credit, and the bank is reviewing Abex's sales and collections history Although the firm's sales have increased the bank is concerned about the credit quality of the firm's customers Based on the following information calculate the average collection period for the firm Use a 365-day year in your calculations.

  • A. 80 days
  • B. 99 days
  • C. 88 days
  • D. 101 days

Answer: A   NEW QUESTION 42 If a CMA is asked to conduct a financial assessment of a company owned by a close relative, what would be the proper response under the credibility standard of the IMA Statement of Ethical Professional Practice?

  • A. Provide an assessment that is timely and accurate despite the personal relationship
  • B. Keep information confidential except when authorized By the relative
  • C. Advise all parties of a potential conflict of interest
  • D. Communicate the existence of a constraint that might preclude responsible judgment

Answer: C   NEW QUESTION 43 Calculate AMI's degree of operating leverage. Show your calculations. Essay Apex Manufacturing lnc. (AMI) is a Canada-based company that manufactures a manufactures and unique part for aircrafts. It has few competitors in the market. The company is exposed to exchange rate risk because about 90% of its products are exported to the U.S, and most of its sales contracts are in U.S. dollars. AMI has the capacity to manufacture 1,500 units of the part per year. For the year just ended. AMI manufactured and sold 1,000 units. The operating results are shown below. Recently, A new customer made a one-area order of 500 units of the part at $1.200 per unit. The CTO asked the controller to analyze this offer. AMI is considering adjusting its sales price next year in a recent meeting, the CFO suggested to use the market-based approach for pricing decisions, bat the controller insisted that the cost-based approach is more favorable to the company. Answer: ** Explanation: See the explanation for the answer. Explanation $1m/$0.5, 2 times contribution/operating income They can simply revalue their assets and hence ask for a higher price for their company or they re structure their financing structure by either issuing fleets or reducing me equity by paying a special one off dividend.   **NEW QUESTION 44 Calculate QDDs financial leverage ratio show your calculations Essay Quality Digital Design (QDD) Inc is a public-traded technology company Selected financial data of QDD for the prior year are as follows QDD's stock was trading at $160 per share at the beginning of the yea: and at $176 per share by the end of the year. The company paid dividends of S5 per share. The company "s stock had a beta of 1 4 The stock market provided a total return of 12% last year, well above the 3% risk free rate of return QDD is considering the issuance of $200 million of bonds to fund the repurchase of $200 million of its stock. QDD is evaluating the bond, including its term structure, maturity, and whether it should be callable obtaining the lowest coupon interest is an important objective of QDD. The CFO has estimated that sales for the current year would remain the same as last year and the new bond would add S12 million in annual interest payments. Answer: ** Explanation: See the explanation for the answer. Explanation   **NEW QUESTION 45 ...... What's more, part of that BraindumpQuiz CMA-Strategic-Financial-Management dumps now are free: https://drive.google.com/open?id=15dVyeGPwbSlRxXu8LIJPaUwlPK4nb2lx