Past CPA Board on MAS

PART I. Basic Consideration in MAS and Consulting Practice

1. Which of the following statement is True?
a. Adequate training and experience in both the analytical approach
and process in the particular undertaking are requisites for the CA
to be in!ol!ed in a management ser!ice engagement.
b. A CA with "#A and h $ $egrees is automatically qualified to
render management ser!ices.
c. Competence as a standard in the rendition of management ser!ices
by a CA may be equated to ha!ing excellent scholarly preparation
to include the usual baccalaureate degree% an "#A and other post
graduate studies.
d. A CA by !irtue of ha!ing the necessary academic preparation and
by hurdling the licensure examinations required to ha!e a CA
license can readily render management ser!ices to the public.
&. Which of the following statement is 'alse?
a. CAs pro!ide management ser!ices to go around the ethical
constraints as mandated by the accountancy act.
b. #usinesses hire management consultants to help define specific
problems and de!elop solutions.
c. (ncluded in the practice of consulting is the pro!ision of confidential
ser!ice in which the identity of the client is concealed.
d. CAs performing management ser!ices may be considered to be in
the practice of management consulting.
). "r. *ey Carlos% a CA firm+s partner in,charge of quality assurance and
re!iew is arguing with "r. *ueben 'ortuna% the consulting partner
regarding the question on independence as "r. 'ortuna is presently
rendering consulting ser!ices to T. Ang - .ga Company% an audit client of
the firm. *elated to this issue of independence% all of the following
statements are not !alid except/
a. (ndependence is not sacrifice for as long as the auditor0consultant is
correct in his decisions for the client.
b. A CA who renders both audit and consulting ser!ices to a client% by
!irtue of his competence0expertise and extensi!e knowledge of the
client+s business is in the best position to render decisions for the
client and should do so.
c. The client is the ultimate decision maker and the auditor and0or
consultant should not make decisions for the client.
d. (t is up to professional 1udgment and discretion of the
auditor0consultant to render decision for the client for as long as his
professional fees are commensurate to the benefits that the client
will deri!e from the engagement.
2. A Certified ublic Accountant+s scope of management ser!ices is broad
and co!ers all of the following except/
a. Change management engagement
b. Computeri3ation engagements
c. Audit engagements
d. *e,engineering 1obs
4. Which of the following statements is not acceptable?
a. A CA represents ) ma1or players in the industry in rationali3ing the
industry+s incenti!es before the go!ernment public hearings.
b. A CA shares with a new and substantial client information
regarding another client belonging to the same industry.
c. A CA pro!ides consulting ser!ices to an existing audit client.
d. A CA offers and pro!ides consulting ser!ices to & ma1or competing
clients.
5. The following characteri3e management ad!isory ser!ices except
a. (n!ol!e decision for the future
b. #roader in scope and !aried in nature
c. 6tili3e more 1unior staff than senior member of the firm
d. *elate to specific problems expert help is required
7. These statements relate to "A8 practice standards/
1. A practitioner is to notify the client of any reser!ation he has
regarding anticipated benefits.
&. Throughout the engagement% there ought to be a systematic critical
re!iew of accomplishments and work should be done within the
framework of the code of ethics and other professional standards.
). $uring the engagement% should there be significant changes
between cost and anticipated benefits% the client should be informed.
2. #efore the engagements% the practitioner must make arrangements
with% and inform the client on significant matters related to the
engagement% in writing.
9f these statements% which pertains to the practice standard on client
benefit?
a. 8tatements 1 and ) only
b. All statements
c. 8tatement 1 only
d. 8tatements 1% ) and 2 only
:. Which of the following statements is true?
a. Adequate training and experience in both the analytical approach
and process in the particular undertaking are requisites for the CA
to be in!ol!ed in a management ser!ice engagement.
b. A CA with "#A h $ degrees is automatically qualified to render
management ser!ices.
c. Competence as a standard in the rendition of management ser!ices
by a CA may be equated to ha!ing excellent scholarly preparation
to include the usual baccalaureate degree% and "#A and other post
graduate studies.
d. A Certified ublic Accountant by !irtue of ha!ing the necessary
academic preparation and by hurdling the licensure examinations
required to ha!e a CA license can readily render management
ser!ices to the public.
;. Which of the following will not impair the independence of a CA in the
rendition of "anagement 8er!ices?
a. The CA performs decision,making ser!ices for his client.
b. The CA perform ser!ices wherein he is in effect% acting as an
employee of the client.
c. The CA loses his ob1ecti!ity and acts in a manner as if he is
ad!ocating fir the interest of his client.
d. The CA does not extend his ser!ices beyond the presentation of
recommendation or gi!ing of ad!ice.
A*T ((. Accounting (nformation 8ystem
1<. An acti!ity that is not considered part of the systems design phase is
a. 'ile record layout
b. $ocument flowcharting
c. 8pecification of format and content of report
d. 8ystems sur!ey
11. The main components of the Central rocessing 6nit =C6> of a
computer include only
a. Control% arithmetic and logic% and memory
b. (nput% processing and output
c. 8oftware% register and primary memory
d. "emory% processing and register
1&. ?ow is an Accounting (nformation 8ystem =A(8> distinguished from a
management (nformation 8ystem ="(8>?
a. An A(8 maybe either manual or computer,based and "(8 is
computer,based.
b. An A(8 is a subsystem within an "(8.
c. An A(8 is controlled oriented and "(8 is used exclusi!ely for
planning.
d. An A(8 deals with financial information and "(8 handles all other
information.
1). 'eedback% feed forward and pre!enti!e are important types of control
systems and procedures for accounting information systems. Which of the
following is in the correct order of feedback% feed forward and pre!enti!e
control systems?
a. (n!entory control% capital budgeting and cash budgeting.
b. Cost accounting !ariances% separation of duties and cash planning.
c. Cash budgeting% capital budgeting and hiring qualified employees.
d. Cost accounting !ariances% cash budgeting and organi3ational
independence.
12. #ench Corp. operates in se!eral regions% with each region performing
its data processing in a region data center. The corporate "anagement
(nformation 8ystem staff has de!eloped a database management system to
handle customer ser!ice and billing. The $irector of "(8 recommended that
the new system be implemented in the *egion 2 to ascertain if the system
operates in a satisfactory manner. This type of con!ersion is called a
a. Crash con!ersion
b. arallel con!ersion
c. ilot con!ersion
d. $irect con!ersion
"A@ &<<; CA
#oard
14. A floppy disk =e.g.% AB*#AT("% "ACBDD>.
a. $iskette
b. Cassette tape
c. $isk
d. ?ard disk
15. (mportant types of control systems and procedures for accounting
information systems are feedback% feed forward and pre!enti!e. Which one
of the following is in the correct order of feedback% feed forward and
pre!enti!e control systems?
a. Cost accounting !ariances% separation of duties and cash planning.
b. Cost accounting !ariances% cash budgeting and organi3ational
independence.
c. Cash budgeting% cost accounting !ariances and separation of duties.
d. (n!entory control% capital budgeting and cash budgeting.
17. Which one of the following represents a lack of internal control in a
computer,based information systems?
a. The design and implementation is performed in accordance with
management+s specific authori3ation.
b. Any and all changes in application programs ha!e been
authori3ation and appro!al of management.
c. ro!isions exist to ensure the accuracy and integrity of computer
processing of all files and reports.
d. #oth computer operators and programmers ha!e unlimited access to
the programs and data files.
1:. An Bxecuti!e (nformation 8ystem =B(8> focuses on long,range
ob1ecti!es and gi!es immediate information about an organi3ation+s critical
success factors. (t can be used on computers of all si3es. (t is commonly
used by all executi!es at the highest le!els within the organi3ation. All of
the following statements apply to B(8 except/
a. (t is likely to be one of the most widely used and the largest of the
information subsystems in a business organi3ation.
b. (t pro!ides top executi!es with immediate and easy access to
information in ahighly interacti!e format.
c. (t pro!ides information in a highly aggregated form.
d. (t helps executi!es monitor business conditions in general and
assist in strategic planning to control and operate the entity.
1;. The concept of timeliness of data a!ailability is most rele!ant to
a. Computeri3ed system
b. ackaged software
c. 9n,line systems
d. "icrosystems
&<. To control purchasing and accounts payable% an information system
must include certain source documents. 'or a manufacturing concern like
fruit processors% (nc.% these documents should include
a. urchase requisitions% purchase orders% recei!ing reports and
suppliers in!oices.
b. urchase orders% recei!ing reports and in!entory reports of goods
needed.
c. urchase requisitions% purchase orders% in!entory reports of goods
needed and supplier+s in!oices.
d. urchase orders% recei!ing reports and supplier+s in!oices.
(((. "A.AEB"B.T ACC96.T(.E C9.CBT8 A.$ *B89.8(#(D(T@
ACC96.T(.E
&1. Controllership has attained special recognition in corporate
management as business expand in complexity and reach and as the
controller exerts influence for to take organi3ation+s goals. Controllership
and treasurership constitute corporate finance. These are among corporate
finance+s traditional functions.
1. Tax management
&. 'inance reporting and interpretation
). Credit management
2. 8ourcing and in!esting funds
4. *eporting to go!ernment regulatory agencies
5. *isk management
7. Bconomic appraisal
:. lanning for control
Which of the following are the functions of the controller?
a. All eight items
b. (tems 1% &% 4% 7 and : only
c. (tems 1% &% )% 2% 4% 7 and : only
d. (tems &% )% 4% 7 and : only
&&. To distinguish between management accounting and financial
accounting% the following statements are correct except/
a. "anagement accounting in !iew of its !arious integrated recipients
should ha!e a separate data recording and retrie!al system from
financial accounting.
b. 'inancial accounting is bound by Eenerally Accepted Accounting
rinciples =EAA>% and management accounting need not be in
conformity with EAA.
c. 'inancial accounting can be regarded as the process while
management accounting can be regarded as the product of that
process.
d. "anagement accounting output must be released on time so as not
to erode its usefulnessF 'inancial accounting output can still be
useful e!en when delayed.
&). The acti!ities in a management system+s control can be grouped into
four
1. "easurement of actual performance
&. $eciding and implementing correcti!e actions
). $etermining standard of performance
2. Comparing actual performance !ersus standards and analy3ing
results.
The abo!e steps must done in this sequence
a. 2% )% &% 1
b. )% 1% 2% &
c. 1% )% 2% &
d. )% 2% 1% &
(A. '(.A.C(AD 8TATB"B.T A.AD@8(8
&2. (f% 1ust prior to a period of rising prices% a company changed its
in!entory measurement method from '('9 to D('9% the effect in the next
period would be to
a. (ncrease both the current ratio and in!entory turn,o!er
b. $ecrease both the current ratio and in!entory turn,o!er
c. (ncrease the current ratio and decrease in!entory turn,o!er
d. $ecrease the current ratio and increase in!entory turn,o!er
&4. When a balance sheet amount is related to an income statement
amount in computing a ratio%
a. The balance sheet amount should be con!erted to an a!erage for the
year.
b. The income statement amount should be con!erted to an a!erage for
the year.
c. #oth amounts should be con!erted to market !alue.
d. Comparisons with industry ratios are not meaningful.
&5. 9n $ecember )1% 1;x< the #alance 8heet of #elle Co. disclosed total
assets of :% <<<%<<<% current liabilities of 1% 4<<%<<< and long,term debt
of &% 2<<% <<<. Common stock outstanding amounted to 4<<%<<< shares%
while 1<<%<<< shares of 1< par !alue preferred stock were outstanding.
The retained earnings account indicated a deficit balance of &% <<<% <<<.
#elle+s book !alue per share of common stock as of $ecember )1% 1;x< is
a. 15.<<
b. 5.&<
c. 1&.&<
d. :.&<
&7. ?ow are di!idends per share for common stock used in the calculation
of the following?
$i!idend per,share Barnings
ayout ratio per share
a. $enominator denominator
b. $enominator .ot used
c. .umerator .ot used
d. .umerator .umerator
&:. $uring 1;x4% *euel Company purchased 1% ;&<% <<< of in!entory. The
cost of goods sold for 1;x4 was 1% :<<% <<< and the ending in!enotyr at
$ecember )1% 1;x4 was )5<% <<<. What was the in!entory turn,o!er for
1;x4?
a. 4.< b. 4.) c. 5.< d. 5.2
A. C98T,A9D6"B,*9'(T A.AD@8(8
The following data apply to items &;,))
Dara Company produces a single product. (t sold &4% <<< units last year
with the following results/
8ales 5&4% <<<
Aariable Costs )74% <<<
'ixed Costs 14<% <<< 4&4% <<<
.et (ncome before taxes 1<<% <<<
(ncome Taxes =24G> 24% <<<
.et (ncome 44% <<<
(n an attempt to impro!e its product% Dara is considering replacing a
component part in its product that has a cost of &.4< with a new and
better part costing 2.4< per unit in the coming year. A new machine would
also be needed to increase plant capacity. The machine would cost 1:%
<<< with a useful life of 5 years and no sal!age !alue. The company uses
straight line depreciation on all plant assets.
&;. What was Dara Company+s break,e!en point in number of units last
year?
a. 5% <<< b. 14% <<< c. &1% <<< d. 1:% <<<
)<. ?ow many units of product would Dara Company ha!e had to sell in the
last year to earn 77% <<< in net income after taxes?
a. &;% <<< b. &)% <<< c. &&% 7<< d. &;% )<<
)1. (f Dara Company holds the sales price constant and makes the
suggested changes% how many units of product must be sold in the coming
year to break,e!en?
a. 14% )<< b. 1:% 74< c. 1;% 1&4 d. &1% <<<
)&. (f Dara Company holds the sales price constant and makes the
suggested changes% how many units of the product will the company ha!e
to sell to make the same net income after taxes as last year?
a. )1% 5&4 b. )1% &4< c. ))% 4<< d. &4% )<<
)). (f Dara Company wishes to maintain the same contribution margin ratio%
what selling price per unit of product must it charge next year to co!er the
increased material costs?
a. &7.<< b. &4.<< c. )&.4< d. &:.))
A(. C9"*B?B.8(AB #6$EBT(.E
)2. 'or "ay 1;x1% @oung Company has budgeted its cash receipts at 1&4%
<<< and its cash disbursements at 1):% <<<. The company+s cash balance
on "ay 1 is 17% <<<. (f the desired "ay )1 cash balance is &<% <<<% then
how much cash must the company borrow during the month =before
considering any interest payments>?
a. 2% <<< b. :% <<< c. 1&% <<< d. 15% <<<
A((. 8TA.$A*$ C98T8 A.$ B*'9*"A.CB BAAD6AT(9.
)4. Which of the following factors is not likely to be considered by
management in determining whether a !ariance should be regarded as an
exception?
a. Consistency of occurrence o!er time.
b. Ability to control the item related to the !ariance.
c. .ature of the item related to the !ariance.
d. Costing method used to calculate the !ariance.
A(((. Costing Approaches/ Absorption Costing0Aariable Costing
)5. The accountant for the $o!er Company forgot to make an ad1usting
entry to record depreciation for the current year. The effect of this error
would be/
a. An o!erstatement of net income and an understatement of assets.
b. An o!erstatements of assets offset by an understatement of owner+s
equity.
c. An o!erstatement of assets% net income and owner+s equity.
d. An o!erstatement of assets and of net income and an
understatement of owner+s equity.
(C. $BCB.T*AD(HB$ 9B*AT(9.8 A.$ T*A.8'B* *(C(.E
)7. #eta "arket has ) stores/ % I and *. $uring 1;x:% 8tore had a
contribution margin of &2% <<< and a contribution margin ratio of )<G.
8tore I had !ariable costs of 2:% <<< and a contribution margin ratio of
2<G. 8tore * had !ariable costs of :2% <<< which represented 7<G of
sales in the store. 'or 1;x:% 8tar "arket+s total sales were
a. )&<% <<<
b. )5<% <<<
c. 22<% <<<
d. &:<% <<<
):. Jhi Company has two di!isions K and J. $uring 1;x&% the contribution
margin in K was )<% <<<. The contribution margin ration in J during 1;x&
was 2<G% its sales were 1&4% <<< and its segment margin was )&% <<<.
The common fixed expenses in the company were 2<% <<< and the
company+s net income for the year was 1:% <<<. The segment margin for
$i!ision K for 1;x& was
a. &5% <<<
b. )&% <<<
c. :% <<<
d. 4:% <<<
C. 68(.E C98T $ATA '9* $BC(8(9. "AJ(.E
);. icnic (tems% (nc. manufactures coolers that contain a free3able ice bag.
'or an annual !olume of 1<% <<< units% fixed manufacturing costs of 4<<%
<<< are incurred. Aariable costs per unit amounts are/
$irect materials :<
$irect Dabor 14
Aariable 'actory 9!erhead &<
#ags Corporation offered to supply the assembled ice bag for 2< with a
minimum order of 4% <<< units. (f picnic accepts the offer it will be able to
reduce !ariable labor and o!erhead costs by 4<G. The direct materials for
the free3able ice bag will cost icnic &< if it will produce it. Considering
#ags Corporation offer% icnic should
a. #uy the free3able ice bag due to 14<% <<< ad!antaged.
b. roduce the free3able ice bag due to &&4% <<< ad!antaged.
c. roduce the free3able ice bag due to &4% <<< ad!antaged.
d. #uy the free3able ice bag due to 4<% <<< ad!antaged.
C(. I6A.T(TAT(AB "BT?9$8
2<. A small company makes only two products with the following two
production constraints representing two machines and their maximum
a!ailability/
& C L ) @ M 1:
& C L @ M 1<
Where/ C N the units of the first product
Where/ @ N the units of the second product
(f the profit equation is H N 2 C L & @% the maximum possible profit is
a. &<
b. &1
c. 1:
d. &2
C((. W9*J(.E CA(TAD "A.AEB"B.T
21. Which of the following characteristics are generally associated with a
Oconser!ati!eP financial policy?
a. ?igh current assets relati!e to sales and high current liabilities
relati!e to total assets.
b. ?igh current assets relati!e to sales and low current liabilities
relati!e to total assets.
c. Dow current assets relati!e to sales and high current liabilities
relati!e to total assets.
d. Dow current assets relati!e to sales and low current liabilities relati!e
to total assets.
2&. The "anila Commercial #ank and *ap Corp. signed a loan agreement
sub1ect to the following terms.
a. 8tated interest rate of 1:G on a one,year discounted loanF and
b. 14G compensating non,interest bearing checking account balance to be
maintained by *ap with "anila Commercial #ank.
The net proceeds of the loan was 1 million. The principal amount of the
loan was
a. 1% 175% 271
b. 1% <<<% <<<
c. 1% 2;&% 4)7
d. 1% &1;% 41&
"A@ &<<;
CA
#9A*$
2). Three suppliers of Bast Corporation offer different credit terms. West
Co. offers terms of 1 Q 0 14% net )<. .orth Corp. offers terms of 101<. .et )<.
8outh (nc. offers terms of &01<% net 5<. Bast Corp. would ha!e to borrow
from a bank at an annual rate of 1&G in order to take any cash discounts.
Which one of the following would be the most attracti!e for "a Corp.?
=Assume )5< days a year>.
a. urchase from West Co.% pay in 14 days and borrow any money
needed from the bank.
b. urchase from West Co.% pay in )< days and borrow any money
needed from the bank.
c. urchase from 8outh (nc.% pay in 5< days and borrow any money
needed from the bank.
d. urchase from .orth Corp. and pay in )< days.
C(((. CA8? A.$ 8?9*T TB*" (.AB8T"B.T "A.AEB"B.T
22. Jen Dumber Company obtained short term bank loan for 1% <<<% <<<.<<
at an annual interest rate of 1&G. As a condition of the loan Jen is required
to maintain a compensating balance of &<<% <<<.<< in its checking
account. The checking account earns interest at an annual rate of 5G. Jen
would otherwise maintain only 1<<% <<<.<< in its checking account for
transactional purposes. Jen+s effecti!e interest cost of the loan is
a. 1&G
b. 12G
c. 1).4<G
d. 1&.57G
"A@ &<<; CA
#oard Bxam
24. 'abella Company budgeted sales on account of 1&<% <<< for Kuly%
&11% <<< for August and 1;:% <<< for 8eptember. Collection experience
indicates that 5<G of the budgeted sales will be collected the amount after
the sale% )5G the second month% and 2G will be uncollectible. The cash
receipts from accounts recei!able that should be budgeted for 8eptember
would be
a. 15;% :<<
b. 127% ;5<
c. 1;7% ::<
d. 1;2% 75<
C(A. *BCB(AA#DB8 "A.AEB"B.T
25. Changing a firm+s credit terms from &0&<% net05< to &01<% net0)< will
generally
a. (ncrease the a!erage collection period and increase sales
b. (ncrease the a!erage collection period and reduce sales
c. *educe the a!erage collection period and increase sales
d. *educe the a!erage collection period and reduce sales.
27. (f a firm purchases raw materials from its supplier on a &01<% net05< cash
discount basis% the equi!alent annual interest rate =using a )5<,day year> of
foregoing the cash discount and making payment on the 5<
th
day is
a. 12.7G
b. 7).4G
c. 1&.&G
d. 8ome amount other than those gi!en abo!e
2:. (f a firm+s credit terms require payment within 24 days but allow a
discount of &G if paid within 14 days =using a )5<,day year>% the
approximate cost0benefit of the trade credit terms is
a. &G
b. 15G
c. 2:G
d. &2G
2;. When a company offers credit terms of &01<% net0)<% the annual interest
cost% based on a )5<,day year% is
a. &2.<G
b. &2.4G
c. )4.)G
d. )5.7G
CA. (.AB.T9*@ "A.AEB"B.T
4<. The si3e of safety stocks for in!entory is important for most firms.
Though se!eral factors can be cited as contributing to the determination of
the si3e of safety stocks that a firm should carry% the issue can often be
reduced to a single factor. Which one of the following statements best
summari3es the factor that affects the le!el of safety stock that a firm will
carry?
a. The amount of idle cash management belie!es it has to in!est in
safety stock.
b. The rapidity with which the in!entory position will turn o!er.
c. The le!el of production the firm+s bank is willing to finance.
d. The le!el of uncertainty with respect to an out,of,stock condition that
management is willing to accept.
41. The following information regarding in!entory policy was assembled by
the K*K Corporation. The company uses a 4<,week year in all calculations.
8ales 1<% <<< units per year
9rder Iuantity &% <<< units
8afety 8tocks 1% )<< units
Dead Time 2 weeks
The reorder point is
a. )% )<< units
b. &% 1<< units
c. 1<< units
d. 1% )<< units
CA(. CA(TAD #6$EBT(.E
Iuestions 4& and 4) are based on the following data/
Allo foundation% a tax exempt organi3ation% in!ested &<<% <<< in a fi!e,
year pro1ect at the beginning of 1;x4. Allo estimates that the annual cash
sa!ings from this pro1ect will amount to 54% <<<. The &<<% <<< of assets
will be depreciated o!er their fi!e,year life on the straight line basis. 9n
in!estments of this type% Allo+s desired rate of return is 1&G.
4&. The net present !alue of the pro1ect is
a. )2% )&4
b. )5% 2<<
c. ;<% <<<
d. 1&4% <<<
"A@ &<<; CA
#oard Bxam
4). Allo+s time,ad1usted rate of return on this pro1ect is
a. Dess than 1&G
b. Dess than 12G% but more than 1&G
c. Dess than 15G% but more than 12G
d. "ore than 15G
42. 6nder the time,ad1usted rate of return capital budgeting technique% it is
assumed that cash flows are rein!ested at the
a. Cost of capital
b. ?urdle rate of return
c. *ate earned by the in!estment
d. There is no assumption about rein!estment of cash flows
44. *ano Co. has the opportunity to in!est in a two,year pro1ect which is
expected to produce cash flow from operation% net of income taxes% of
1<<% <<< in the first year and &<<% <<< in the second year. *ano has a
cost of capital of &<G. 'or this pro1ect% *ano should be willing to in!est
immediately a maximum of
a. &:)% )<<
b. &2;% ;<<
c. &&&% 1<<
d. &<:% &<<
"A@ &<<; CA
#oard Bxam
45. The net present !alue capital budgeting technique can be used when
cash flows from period to period are/
6niform 6ne!en
a. .o @es
b. .o .o
c. @es .o
d. @es @es
47. (t is assumed that cash flows are rein!ested at the rate actually earned
by the in!estment in which of the following capital budgeting techniques?
Time,ad1usted rate of return .et present !alue
a. @es @es
b. @es .o
c. .o .o
d. .o @es
4:. (f income tax considerations are ignored% how is straight line
depreciation expense used in the following capital budgeting techniques?
Time,ad1usted rate of return .et present !alue
a. Bxcluded Bxcluded
b. Bxcluded (ncluded
c. (ncluded Bxcluded
d. (ncluded (ncluded
4;. The payback capital budgeting technique considers/
(ncome o!er entire Time !alue
Dife of pro1ect of money
a. .o .o
b. .o @es
c. @es @es
d. @es .o
Iuestions 5< and 51 are based on the following
Consideration is being gi!en to the possible purchase of a )<% <<<
machine for Alo% which is expected to result in a decrease of 1&% <<< per
year in cash operating expenses. This machine% which has no residual
!alue% has an estimated useful life of fi!e years and will be depreciated on a
straight,line basis. =(gnore income taxes>.
5<. 'or the new machine% the simple rate of return based on initial
in!estment would be
a. 1&G
b. &<G
c. )<G
d. 2<G
"A@ &<<; CA
#oard Bxam
51. (f income taxes are ignore% the payback period for the new machine
would be
a. 1.57 years
b. &.4< years
c. 2.17 years
d. 4.<< years
CA((. '(.A.C(.E $BC(8(9.8
5&. 'or 1;x;% .elson (ndustries increased earnings before interest and
taxes by 17G. $uring the same period% net income after tax increased by
2&G. The degree of financial le!erage that existed during 1;x; is
a. 1.7<
b. 2.&<
c. &.27
d. 4.;<
CA(((. *9KBCT 'BA8(#(D(T@ 8T6$@
5). Which of the following is not an acti!ity co!ered by feasibility study?
a. Acti!ity based accounting of the endea!or leading to a conclusion
b. Collection of data
c. B!aluation and analysis of data collected
d. 'ormulation of recommendation
52. Among the following ma1or parts of a pro1ect feasibility study% which
grouping is considered critical?
a. "anagement% financial and social returns
b. Technical. 'inancial and en!ironmental aspects
c. Bconomic benefits% management% financial
d. "arketing% engineering or technical and financial
54. The statements below about pro1ect feasibility studies are the true
except/
a. Any change which can materially alter the assumptions used in the
preparation of the forecast will render it useless
b. (t is important for go!ernment agencies in order to determine
entitlement to go!ernment incenti!es
c. (t also co!ers the social desirability aspects of a proposed
undertaking
d. 8ince data gathering is a basic step in its preparation% all the
necessary and required information will always be a!ailable.
55. (n a pro1ect feasibility study% which of the following is true?
a. The study is not affected by any significant change in actual
business conditions as compared to the assumptions used in
making the forecast
b. The study is based on a!ailable information and opinions of the
party in!ol!ed in the preparation of the study.
c. =a> and =b>
d. .one of the abo!e
A.8WB* JB@
1. A
&. A
). C
2. C
4. #
5. C
7. A
:. A
;. $
1<. $
11. A
1&. #
1). $
12. C
14. A
15. #
22. $
24. A
25. $
27. A
2:. $
2;. $
4<. $
41. #
4&. A
4). $
42. C
44. C
45. $
47. #
4:. A
4;. A
17. $
1:. A
1;. C
&<. A
&1. #
&&. A
&). #
&2. $
&4. A
&5. #
&7. C
&:. C
&;. #
)<. A
)1. C
)&. A
)). $
)2. $
)4. $
)5. C
)7. $
):. A
);. C
2<. A
21. #
2&. C
2). A
5<. #
51. #
5&. C
5). A
52. $
54. $
55. #
We must prepare for e!ery fight that we+re going to face. When at times you
feel you wanted to gi!e up% make a rest but ne!er stop pursuing your
dreams. B!ery winning is worthy when we stri!e hard to achie!e it.
When we left nothing but Eod% we will reali3e that Eod is enough. Dot of
people say Omahirap maging CAPR but always bear in mind that Owalang
mahirap kay EodPR.
JA@A .AT(. @A.R ( belie!e% merong lalabas ulit sa mga compilation na
ito sa 9ctober #oard Bxam kase nasa test bank na ng examiner ang mga
yan. ( hope mapasadahan nyo kahit saglit lang ito. B!ery point is important
REood luck to allSSS
Jairus