ETS MFT MBA BUSINESS EXAM ACTUAL EXAM LATEST

Page 1 of 186

1

ETS MFT MBA BUSINESS EXAM ACTUAL EXAM LATEST

- QUESTIONS AND DETAILED CORRECT

ANSWERS JUST RELEASED

ETS MFT MBA BUSINESS EXAM A

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 - ANSWER-(D) actual service delivery and how service quality was communicated

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 1 / 4

Page 2 of 186

2 (D) the price at which goods produced are sold - ANSWER-(B) projected annual revenues of competitors

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 (D) The difference between the market price and the costs recaptured by transferring internally

• ANSWER-(D) The difference between the market price and the costs recaptured by

transferring internally

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 follows.

-Sales $20,000,000 -Cost of goods sold 17,000,000 -Gross profit 3,000,000

-Operating costs:

-Building rents $2,500,000 -Store clerk salaries 3,000,000 2 / 4

Page 3 of 186

3 -Store utilities 1,200,000 -Allocated home office cost 700,000 -Total operating costs 7,400,000 -Anticipated loss ($4,400,000)

The building rents arise from long-term leases that cannot be cancelled. If The Mart closed down this division, what would be the increase in company profits?

(A) $700,000

(B) $1,200,000

(C) $3,000,000

(D) $4,400,000 - ANSWER-(B) $1,200,000

Using manufacturing-based criteria to measure product quality, which of the following should you monitor on a regular basis?(A) Customers' subjective perceptions of the reliability of the product when in use (B) The conformance of the finished product to agreed-to product specifications (C) Objective, third-party tests of the performance of the product 3 / 4

Page 4 of 186

4 (D) Warranty repair histories of the finished product - ANSWER-(B) The conformance of the finished product to agreed-to product specifications

The common stock of ABC, Inc. has a current market price of $52 per share. Dividends have been $5 a share for several years and are not expected to change. The dividend yield of the stock of comparable companies is 10%. Which recommendation would you make regarding ABC, Inc. stock?(A) Purchase at $52 per share because that is a fair price.(B) Purchase at $52 per share because the dividend yield will be 10.1%.(C) Don't purchase, because the dividend yield will be only 2%.(D) Don't purchase for more than $50 per share. - ANSWER-(D) Don't purchase for more than $50 per share.

Increasing a regular quarterly dividend payment may indicate which of the following about a corporation?

• Improved earnings prospects for the firm

II. A reduction in agency problems of free cash flow III. A reduction in tax payments for shareholders (A) I only (B) II only (C) I and II only

• / 4