Free CIA Part 3 Practice Test, Latest Sample Questions

Question #1

A local area network LAN) is best described as a(n):

A. omputer system that connects computers of all sizes, workstations, terminals, and other devices within a limited proximity

B. ystem to allow computer users to meet and share ideas and information

C. lectronic library containing millions of items of data that can be reviewed, retrieved, and analyzed

D. ethod to offer specialized software, hardware, and data-handling techniques that improve effectiveness and reduce costs

View answer

Correct Answer: A

Question #2

The degree of financial leverage of B, to two decimal places, is:

A. 03

B. 05

C. 2

D.

View answer

Correct Answer: B

Question #3

Based on a comparison of RST's quick ratios in Year 5 and Year 6, what is a likely conclusion?

A. ST has improved its management of long-term investments in Year 6

B. ST has written off obsolete inventory in Year 6

C. ST's ability to meet short-term financing needs has declined since Year 5

D. ST's ability to meet short-term financing needs has improved since Year 5

View answer

Correct Answer: C

Question #4

A widely used approach that managers use to recognize uncertainty about individual items and to obtain an immediate financial estimate of the consequences of possible prediction errors is:

A. xpected value analysis

B. earning curve analysis

C. ensitivity analysis

D. egression analysis

View answer

Correct Answer: C

Question #5

The feasible solution region is bounded by the lines connecting points:

A. , 4, 6, and 7

B. , 5, 6, and 8

C. , 4, , , and 8

D. , E

View answer

Correct Answer: A

Question #6

A firm sells its product in a foreign market for a much higher price than in its home market.The reason is most likely:

A. rice elasticity of demand

B. umping

C. ray market activity

D. rice escalation

View answer

Correct Answer: D

Question #7

In the standard regression equation y = a + bx, how is the letter b best described?

A. ndependent Variable

B. ependent Variable

C. onstant coefficient

D. ariable coefficient

View answer

Correct Answer: D

Question #8

Which of the follov5ring is used in determining the economic order quantity ECQ)?

A. egression analysis

B. alculus

C. arkov process

D. ueuing theory

View answer

Correct Answer: B

Question #9

An organization has adopted the robust quality approach. According to this view of quality,

A. he minimum point on the total quality cost curve occurs when conformance cost per unit equals nonconformance cost per unit

B. mproving quality requires tradeoffs among categories of quality costs

C. eyond some point, incurrence of prevention and appraisal costs is not cost beneficial

D. osts in all categories of quality costs may be reduced while improving quality

View answer

Correct Answer: D

Question #10

Which of the following characteristics distinguishes computer processing from manual processing?

A. omputer processing virtually eliminates the occurrence of computational error normally associated with manual processing

B. rrors or fraud in computer processing will be detected soon after their occurrence

C. he potential for systematic errors is ordinarily greater in manual processing than in computerized processing

D. ost computer systems are designed so that transaction trails useful for audit purposes do not exist

View answer

Correct Answer: A

Question #11

Which of the following methods of employee evaluation is best used when employees are heavily involved in teamwork?

A. 60-degree performance appraisal

B. ttribution method

C. ritical incident technique

D. ehaviorally anchored rating scales BARS)

View answer

Correct Answer: A

Question #12

Assume that C Company offers to perform the operation 2 function on 1,000 units at a unit price of US $40, excluding direct materials cast. Also assume that Y Company offers to perform the Operation 1 function an 1,000 units at a unit price of US $7, excluding direct materials cost.Which of these mutually exclusive offers is acceptable?

A. but not Y

B. but not C

C. or Y

D. either offer should be accepted

View answer

Correct Answer: A

Question #13

Query facilities for a database system would most likely include all of the following except:

A. raphical output capability

B. ata dictionary access

C. data validity checker

D. query-by-example interface

View answer

Correct Answer: C

Question #14

A bank has changed from a system in which lines are formed in front of each teller to a one-line, multiple-server system.When a teller is free, the person at the head of the line goes to that teller.Implementing the new system will:

A. ecrease the bank's wage expenses because the new system uses fewer tellers

B. ecrease time customers spend in the line

C. ncrease accuracy in teller reconciliations at the end of the day because fewer customers are served by each teller

D. mprove on-the-job training for tellers because each will perform different duties

View answer

Correct Answer: B

Question #15

Company B's bank requires a compensating balance of 20% on a US $100.000 loan. If the stated interest on the loan is 7%, what is the effective cost of the loan?

A.

B.

C.

D.

View answer

Correct Answer: D

Question #16

An entity has recently purchased some stock of a competitor as part of a long-term plan to acquire the competitor. However, it is somewhat concerned that the market price of this stock could decrease over the short run. The entity could hedge against the possible decline in the stock's market price by:

A. urchasing a call option on that stock

B. urchasing a put option on that stock

View answer

Correct Answer: B

Question #17

An entity experienced sales of US $5 billion, profit before interest and taxes of US $200 million, profit before taxes of US $100 million, and profit of US $70 million. Based on this information and the entity's balance sheet information in Exhibit A. the return on equity ROE is: \

A.

B.

C. 3

D. 4%

View answer

Correct Answer: A

Question #18

The expected payoff if the vendor has perfect information is:

A. S $3,900

B. S $2,200

C. S $1,360

D. S $1,960

View answer

Correct Answer: B

Question #19

The use of teams in total quality management TOM) is important because:

A. ell-managed teams can be highly creative and are able to address complex problems better than individuals can

B. eams are quicker to make decisions, thereby helping to reduce cycle time

C. mployee motivation is higher for team members than for individual contributors

D. he use of teams eliminates the need for supervision, thereby alloying a company to become leaner and more profitable

View answer

Correct Answer: A

Question #20

Unfortunately, the company has not revised its contingency plan since the time when its data processing was mostly centralized at headquarters. The existing plan is likely to be out of date because of:

A. hanges in equipment, data, and software

B. nadequate processing capability at headquarters

C. ack of arrangements for a backup site for headquarters

D. ersonnel turnover at regional centers

View answer

Correct Answer: A

Question #21

What is RST's accounts receivable turnover for Year 6?

A. 9 times

B. 6 times

C. 0 times

D. times

View answer

Correct Answer: A

Question #22

The economic order quantity Q is the size of the order that minimizes total inventory costs.These costs, which are composed of ordering and holding costs, can be computed using the following expression:If the organization decides to order 4.000 units at a time rather than 2.000 units by hour much will its total inventory costs change?

A. S $500 increase

B. S $1,000 increase

C. S $1,000 decrease

D. S $900 increase

View answer

Correct Answer: A

Question #23

During the past few gears, Wilder Company has experienced the following average number of power outages:Each power outage results in out-of-pocket costs of U $300. For U $1,000 per month, At US$800 can lease generator to provide power during outages. If Wilder leases a generator in the coming year, the estimated savings or additional expense) for the year will be:

A. $ 15,200)

B. S $ 1,267)

C. $3,200

D. $7,200

View answer

Correct Answer: C

Question #24

Why have many European Union countries not adopted ISO 14000 standards?

A. dhering to ISO 14000 standards will not reduce monitoring and inspection by regulatory agencies

B. ndividual European Union countries' standards are typically more strict than ISO 14000 standards

C. egulators are permitted to use voluntary audits as a basis for punitive action

D. SO 14000 standards will not make it easier to do business across borders

View answer

Correct Answer: B

Question #25

The internal audit activity has undertaken an audit of the shipping and receiving department of a department store chain. The best engagement tool for this purpose most likely is:

A. ompetitive benchmarking

B. trategic benchmarking

C. nternal benchmarking

D. rocess benchmarking

View answer

Correct Answer: D

Question #26

The trough of a business cycle is generally characterized by:

A. hortages of essential raw materials and rising costs

B. ncreasing purchasing power and increasing capital investments

C. ising costs and an unwillingness to risk new investments

D. nused productive capacity and an unwillingness to risk new investments

View answer

Correct Answer: D

Question #27

An organization has collected data on the complaints made by personal computer users and has categorized the complaints.Using the information collected, the organization should focus on:

A. he total number of personal computer complaints that occurred

B. he number of computer complaints associated with CD-ROM problems and new software usage

C. he number of computer complaints associated with the lack of user knowledge and hardware problems

D. he cost to alleviate all computer complaints

View answer

Correct Answer: C

Question #28

The system requiring the most extensive backup and recovery procedures is a(n):

A. atch system for payroll processing

B. atabase system for online order entry

C. ile-oriented system for billing clients

D. ndexed sequential access method file system for fixed asset accounting

View answer

Correct Answer: B

Question #29

Under throughput costing, the only cost considered to be truly variable in the short run is:

A. irect materials

B. irect labor

C. anufacturing overhead

D. ll manufacturing costs are considered variable

View answer

Correct Answer: D

Question #30

The management and employees of a large household goods moving company believe that it if became nationally known as adhering to total quality management and continuous improvement, one result would be an increase in the company's profits and market share.What should the company focus onto achieve quality more economically?

A. ppraisal costs

B. revention costs

C. nternal failure costs

D. xternal failure costs

View answer

Correct Answer: B

Question #31

A widely used approach that managers use to recognize uncertainty about individual items and to obtain an immediate financial estimate of the consequences of possible prediction errors is:

A. xpected value analysis

B. earning curve analysis

C. ensitivity analysis

D. egression analysis

View answer

Correct Answer: C

Question #32

Which of the following securities is likely to o e the least risk?

A. ncome bonds

B. ebentures

C. ubordinated determined

D. irst mortgage bonds

View answer

Correct Answer: D

Question #33

Which of the following inventory items would be the most frequently reviewed in an ABC inventory control system?

A. xpensive, frequently used, high stock-out cost items with short lead times

B. xpensive, frequently used, low stock-out cost items with long lead times

C. nexpensive, frequently used, high stock-out cost items with long lead times

D. xpensive, frequently used, high stock-out cost items with long lead times

View answer

Correct Answer: D

Question #34

If the bank uses the rnaxirna criterion for selecting the location of the branch, it will select:

A. 1

B. 2

C. 3

D. 4

View answer

Correct Answer: D

Question #35

An electronics company has decided to implement a new system through the use of rapid application development techniques.Which of the following would be included in the development of the new system?

A. eferring the need for system documentation until the final modules are completed

B. emoving project management responsibilities from the development teams

C. reating the system module by module until completed

D. sing object development techniques to minimize the use of previous code

View answer

Correct Answer: C

Question #36

The correct equation for calculating the approximate percentage cost, on an annual basis, of not taking trade discounts is

A. ption A

B. ption B

C. ption C

D. ption D

View answer

Correct Answer: A

Question #37

An entity has total asset turnover of 3.5 times and a total debt to total assets ratio of 70%.If the entity has total debt of US $1,000,000, it has a sales level of:

A. S $5,000,000

B. S $2,450,000

C. S $408,163

D. S $200,000

View answer

Correct Answer: A

Question #38

In PERT, slack is the:

A. ncertainty associated with time estimates

B. ifference between the latest starting time and earliest finishing time

C. ath that has the largest amount of time associated with it

D. umber of days an activity can be delayed without forcing a delay for the entire project

View answer

Correct Answer: D

Question #39

What is the best course of action to take if a program takes longer than usual to load or execute?

A. est the system by running a different application program

B. eboot the system

C. un antivirus software

D. ack up the hard disk files to floppies

View answer

Correct Answer: C

Question #40

Assume that the value of a share of QQ Company ordinary stock at the expiration date is either US $30 or US $45.What is the difference in the net payoff on the portfolio because of a difference in the stock price at the maturity date?

A. S $10

B. S $7

C. S $5

D. S $0

View answer

Correct Answer: D

Question #41

If the bank uses the rnaxirna criterion for selecting the location of the branch, it will select:

A. 1

B. 2

C. 3

D. 4

View answer

Correct Answer: D

Question #42

Violation of which assumption underlying regression analysis is prevalent in time series analysis?

A. ariance of error term is constant

B. rror terms are independent

C. istribution of error terms is normal

D. xpected value of error term equals zero

View answer

Correct Answer: B

Question #43

Focusing on customers, promoting innovation, learning new philosophies, driving out fear, and providing extensive training are all elements of a major change in organizations. These elements are aimed primarily at:

A. opying leading organizations to better compete with them

B. ocusing on the total quality of products and services

C. eing efficient and effective at the same time, in order to indirectly affect profits

D. anaging costs of products and services better, in order to become the low-cost provider

View answer

Correct Answer: B

Question #44

Before sending or receiving EDI messages, a company should:

A. xecute a trading partner agreement with each of its customers and suppliers

B. educe inventory levels in anticipation of receiving shipments

C. emand that all its suppliers implement EDI capabilities

D. valuate the effectiveness of its use of EDI transmissions

View answer

Correct Answer: A

Question #45

Your company' has decided to enter the European market with one of its products and is now considering three advertising strategies. This market currently belongs to Company X. Company X is mare that your company is entering the market and is itself considering steps to protect its market. An analyst for your company has identified three strategies Company X might develop and has shown the payoffs for each in the tables below.The analyst has formulated this:

A. ero-sum game

B. ooperative game

C. risoner's dilemma

D. ame against nature

View answer

Correct Answer: A

Question #46

A compensating balance:

A. ompensates a financial institution for services rendered by providing it with deposits of funds

B. s used to compensate for possible losses on a marketable securities portfolio

C. s a level of inventory held to compensate for variations in usage rate and lead time

D. s the amount of prepaid interest on a loan

View answer

Correct Answer: A

Question #47

A type of network that is used to support interconnections within a building is known as a:

A. ocal area network

B. ide area network

C. etropolitan area network

D. alue-added network

View answer

Correct Answer: A

Question #48

Which line segment identifies the quantity of safety stock maintained?

A. B

B. E

C.

D. C

View answer

Correct Answer: B

Question #49

Which of the following is not required when ISO 9000 standards are adopted?

A. rganization of a quality management system

B. reation of an internal audit system

C. onsistent high quality products

D. n-site inspections by a registrar

View answer

Correct Answer: C

Question #50

The dominant firm in a market pursues a market-leader strategy. This strategy may involve

A. olding the market stable to avoid attracting new competitors

B. flank defense to strengthen the firm's brand

C. ending market signals as a mobile defense

D. nnovations as an offensive strategy

View answer

Correct Answer: D

Question #51

An entity has daily cash receipts of US $300,000. A bank has offered to provide a lockbox service that will reduce the collection time by 3 days. The bank requires a monthly fee of US $2,000 for providing this service. If money market rates are expected to average 6% during the year, the additional annual income loss) of using the lockbox service is:

A. S $(24,000)

B. S $12,000

C. S $30,000

D. S $54,000

View answer

Correct Answer: C

Question #52

If two entities, entity' - and entity Y. are alike in all respects except that entity X employs more debt financing and less equity financing than entity Y does. which of the following statements is true?

A. ntity X has more net earnings variability than entity Y

B. ntity X has more operating earnings variability than entity Y

C. ntity X has less operating earnings variability than entity Y

View answer

Correct Answer: A

Question #53

Which of the following quality costs are nonconformance costs?

A. ystems development costs

B. osts of inspecting in-process items

C. nvironmental costs

D. osts of quality circles

View answer

Correct Answer: C

Question #54

Why have many European Union countries not adopted ISO 14000 environmental standards?

A. ollowing ISO 14000 standards will not reduce monitoring and inspection by regulatory agencies

B. ndividual European Union countries' standards are typically more strict than ISO 14000 standards

C. egulators are permitted to use voluntary audits as a basis for punitive action

D. SO 14000 standards will not make it easier to do business across borders

View answer

Correct Answer: B

Question #55

An organization has collected data on the complaints made by personal computer users and has categorized the complaints.Using the information collected, the organization should focus on:

A. he total number of personal computer complaints that occurred

B. he number of computer complaints associated with CD-ROM problems and new software usage

C. he number of computer complaints associated with the lack of user knowledge and hardware problems

D. he cost to alleviate all computer complaints

View answer

Correct Answer: C

Question #56

Which of the following is an objective of logical security controls for information systems?

A. o ensure complete and accurate recording of data

B. o ensure complete and accurate processing of data

C. o restrict access to specific data and resources

D. o provide an audit trail of the results of processing

View answer

Correct Answer: C

Question #57

Which of the following securities is likely to o e the least risk?

A. ncome bonds

B. ebentures

C. ubordinated determined

D. irst mortgage bonds

View answer

Correct Answer: D

Question #58

An entity has recently purchased some stock of a competitor as part of a long-term plan to acquire the competitor. However, it is somewhat concerned that the market price of this stock could decrease over the short run. The entity could hedge against the possible decline in the stock's market price by:

A. urchasing a call option on that stock

B. urchasing a put option on that stock

View answer

Correct Answer: B

Question #59

Which of the following would Batchelder most likely use as a hash total?

A. G HK80

B.

C. 04

D. 10

View answer

Correct Answer: D

Question #60

An entity borrows funds from its bank for a one-year period. The bank charges interest at a nominal rate of 15% per annum, on a discount basis, and requires a 10% compensating balance.The effective annual interest rate on the loan is:

A. 6

B. 7

C. 0

D. 5

View answer

Correct Answer: C

Question #61

All of the following are objectives of pricing except:

A. mage oriented objectives

B. rofit maximization

C. tabilization

D. roduction maximization

View answer

Correct Answer: D

Question #62

As organizations become more computer integrated, management is becoming increasingly concerned with the quality of access controls to the computer system.Which of the following provides the most accountability?

A. ption I

B. ption II

C. ption III

D. ption IV

View answer

Correct Answer: A

Question #63

The current generation of ERP software ERP II) has added such front-office functions as:

A. nventory control

B. uman resources

C. urchasing

D. ustomer service

View answer

Correct Answer: D

Question #64

The necessary elements of a contract include:

A. ome form of writing, equal consideration, and legal capacity

B. ormal execution, definite terms, and a valid offer and acceptance

C. ffer and acceptance, consideration, legal capacity, and mutual assent

D. ilateral promises, legal capacity, and legality of purpose

View answer

Correct Answer: C

Question #65

Various tools are employed to control large scale projects. They include all of the following except:

A. ERT

B. PM

C. tatistical process control

D. antt charts

View answer

Correct Answer: C

Question #66

In an economic order quantity EOQ) model, both the costs per order and the holding costs are estimates. If those estimates are varied to determine how much the changes affect the optimal EOQ, such an analysis would be called a:

A. orecasting model

B. ensitivity analysis

C. ritical path method analysis

D. ecision analysis

View answer

Correct Answer: B

Question #67

A balanced scorecard is primarily concerned with:

A. taff

B. tructure

C. trategy

D. ystems

View answer

Correct Answer: C

Question #68

Which of the following is the most effective user account management control in preventing the unauthorized use of a computer system?

A. anagement enforces an aggressive password policy that requires passwords to be 10 characters long, to be nonreusable, and to be changed weekly

B. n account manager is responsible for authorizing and issuing new accounts

C. he passwords and usernames of failed log-in attempts are logged and documented in order to cite attempted infiltration of the system

D. mployees are required to renew their accounts semiannually

View answer

Correct Answer: D

Question #69

A firm ships its product to a foreign subsidiary and charges a price that may increase import duties but lower the income taxes paid by the subsidiary. The most likely reason for these effects is that the:

A. rice is an arm's-length price

B. rice is a cost-plus price

C. ransfer price is too low

D. ransfer price is too high

View answer

Correct Answer: D

Question #70

The expected time of the critical path is:

A. 2

B. 3

C. 1

D. 1

View answer

Correct Answer: B

Question #71

What is the economic term used to describe the situation in which each nation specializes in the production of goods that it produces relatively more efficiently than other nations and imports those goods that are produced relatively more efficiently by other nations?

A. alance of trade

B. iminishing returns

C. elative competition

D. omparative advantage

View answer

Correct Answer: D

Question #72

A firm has recently converted its purchasing cycle from a manual process to an online computer system.Which of the following is a probable result associated with conversion to the new automatic system?

A. rocessing errors are increased

B. he firm's risk exposures are reduced

C. rocessing time is increased

D. raditional duties are less segregated

View answer

Correct Answer: D

Question #73

A catalog company has been experiencing an increasing incidence of problems in which the wrong products have been shipped to the customer. Most of the customer orders come in over the telephone, and an operator enters the data into the order system immediately.Which of the following control procedures, if properly implemented, would address the problem?I). Have the computer automatically assign a sequential order number to each customer order.II). Implement a self-checking digit algorithm for each product n

A. I only

B. , II, and Ill

C. I and Ill only

D. and II only

View answer

Correct Answer: C

Question #74

The primary difference between PERT and CPM is that:

A. PM uses probabilities on the activity times and PERT does not

B. ERT considers activity costs and CPM does not

C. ERT can assign probabilities to activity times and CPM does not

D. PM considers activity costs and PERT does not

View answer

Correct Answer: D

Question #75

A shortest-route algorithm is used in network models to:

A. dentify bottlenecks in a network and hence identify the longest path

B. inimize total travel time from one site to each of the other sites in a transportation system

C. aximize throughput in networks with distinct entry (source node) and exit (sink node) points

D. dentify the set of connecting branches having the shortest combined length

View answer

Correct Answer: B

Question #76

The calculation of an economic order quantity EOQ) considers:

A. he purchasing manager's salary_

B. corporate charge for advertising expenses

C. he shipping costs to deliver the product to the customer

D. apital costs

View answer

Correct Answer: D

Question #77

Management of a company is attempting to build a reputation as a world-class manufacturer of quality products.Which of the following measures would not be used by the firm to measure quality?

A. he percentage of shipments returned by customers because of poor quality

B. he number of parts shipped per day

C. he number of defective parts per million

D. he percentage of products passing quality tests the first time

View answer

Correct Answer: B

Question #78

Quality control programs employ many tools for problem definition and analysis. A scatter diagram is one of these tools. The objective of a scatter diagram is to:

A. isplay a population of items for analysis

B. how frequency distribution in graphic form

C. ivide a universe of data into homogeneous groups

D. how the vital trend and separate trivial items

View answer

Correct Answer: A

Question #79

The network diagram and the corresponding activity cost chart for a manufacturing project at Networks, Inc., are presented below. The numbers in the diagram are the expected times (in days) to perform each activity in the project.The expected time of the critical path is:

A. 2

B. 3

C. 1

D. 1

View answer

Correct Answer: B

Question #80

A total interruption of processing throughout a distributed information technology system can be minimized through the use of:

A. xception reporting

B. ault tolerant

C. ackup and recovery

D. ata file security

View answer

Correct Answer: B

Question #81

From the viewpoint of the investor, which of the following securities provides the east risk?

A. ortgage bond

B. ubordinated debenture

C. ncome bond

D. ebentures

View answer

Correct Answer: A

Question #82

A manufacturing firm produces multiple families of products requiring various combinations of different types of parts. The manufacturer has identified various cost pools. One of which consists of materials handling costs. This cost pool includes the wages and employee benefits of the workers involved in receiving materials, ins ting materials, storing materials in inventory, and moving materials to the workstations; depreciation and maintenance of materials handling equipment forklift trucks): and costs of

A. irect labor hours

B. umber of units produced

C. umber of vendors involved

D. umber of parts used

View answer

Correct Answer: D

Question #83

Which of the following is not true about the advantages of adopting ISO 9000 standards?

A. doption of ISO 9000 standards may allow an entity to sell products in foreign markets

B. SO registration makes customers more comfortable with the supplier's products and services

C. SO 9000 allows entities to understand who internal customers and users are without sharing private information

D. SO registration may help entities discover internal process and quality improvements

View answer

Correct Answer: C

Question #84

Which of the following is not a condition that the internal auditor should be alert for when testing for fraud in an e-commerce audit?

A. enial of service attacks

B. uplication of payments

C. enial of orders placed or received

D. xception reports and procedures

View answer

Correct Answer: A

Question #85

If the central bank of a country raises interest rates sharply, the country's currency will likely:

A. ncrease in relative value

B. emain unchanged in value

C. ecrease in relative value

D. ecrease sharply in value at first and then return to its initial value

View answer

Correct Answer: A

Question #86

The entity has a fixed assets balance of:

A. S $0

B. S $16

C. S $58

D. S $64

View answer

Correct Answer: C

Question #87

The e-commerce project that an auditor is most likely to assess as having the lowest risk is one that:

A. as a business plan that covers the integration of the planning, design, and implementation of the e- commerce system with the strategies of the organization

B. onsiders governmental and regulatory requirements, and other external factors in its risk assessment

C. alls for using outside vendors to provide hosting services

D. ddresses the security of the software and the accuracy of transaction processing

View answer

Correct Answer: A

Question #88

For the year just ended, the entity had a rate of return on equity, rounded to two decimals, of:

A. 1

B. 8

C. 7

D. 1

View answer

Correct Answer: A

Question #89

Heniser Pet Foods manufactures two products. X and Y. The unit contribution margins for Products X and Y are US $30 and US $50, respectively. Each product uses Materials A and B. Product X uses 6 pounds of Material A and 12 pounds of Material B. Product Y uses 12 pounds of Material A and 8 pounds of Material B. The company can purchase only 1,200 pounds of Material A and 1,760 pounds of Material B. The optimal mix of products to manufacture is:

A. 46 units of X and 0 units of Y

B. units of X and 100 units of Y

C. 20 units of X and 40 units of Y

D. 0 units of X and 120 units of Y

View answer

Correct Answer: C

Question #90

A bank plans to open a branch in one of five locations (labeled L1, L2, L3, L4, L5). Demand for bank services may be high, medium, or low at each of these locations. Profits for each location- demand combination are presented in the payoff matrix.If, in addition to the estimated profits .management of the bank assesses the probabilities of high, medium, and low demands to be 0.3.0.4, and 0.3, respectively, what is the expected opportunity loss from selecting location L4?

A. S$5

B. S$7

C. S$7

D. S$5

View answer

Correct Answer: A

Question #91

At the introduction stage of an innovative product, the profit growth is normally slow due to:

A. xpensive sales promotion

B. igh competition

C. vailable alternatives

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Correct Answer: A

Question #92

Which of the following criteria would be most useful to a sales department manager in evaluating the performance of the manager's customer-service group?

A. he customer is always right

B. ustomer complaints should be processed promptly

C. mployees should maintain a positive attitude when dealing with customers

D. ll customer inquiries should be answered within 7 days of receipt

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Correct Answer: D

Question #93

The process model used in a theory of constraints (TOC) analysis is called:

A. ust-in-time

B. rum-buffer-rope

C. aterials requirements planning

D. ean production

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Correct Answer: B

Question #94

The e-commerce project that an auditor is most likely to assess as having the lowest risk is one that:

A. as a business plan that covers the integration of the planning, design, and implementation of the e- commerce system with the strategies of the organization

B. onsiders governmental and regulatory requirements, and other external factors in its risk assessment

C. alls for using outside vendors to provide hosting services

D. ddresses the security of the software and the accuracy of transaction processing

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Correct Answer: A

Question #95

Only two companies manufacture Product A. The finished product is identical regardless of which company manufactures it. The cost to manufacture Product A is US$1, and the selling price is US $2. One company considers reducing the price to achieve 100% market share but fears the other company will respond by further reducing the price. Such a scenario would involve a:

A. o-win strategy

B. ual-win strategy

C. ne win-one lose strategy

D. eutral strategy

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Correct Answer: A

Question #96

The time that car 3 will have to wait to be serviced:

A. -2 minutes

B. minutes

C. minutes

D. + minutes

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Correct Answer: C

Question #97

Through the use of decision models, managers thoroughly analyze many alternatives and decide on the best alternative for the company. Often the actual results achieved from a particular decision are not what was expected when the decision was made In addition, an alternative that was not selected would have actually been the best decision for the company. The appropriate technique to analyze the alternatives by using expected inputs and altering them before a decision is made is:

A. xpected value analysis

B. inear programming

C. rogram evaluation review technique (PERT)

D. ensitivity analysis

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Correct Answer: D

Question #98

An audit of the electronic data interchange EDI) area of a banking group revealed the facts listed below.Which one indicates the need for improved internal control?

A. mployees may only access the computer system via an ID and an encrypted password

B. he system employs message sequencing as a way to monitor data transmissions

C. ertain types of transactions may only be made at specific terminals

D. ranch office employees may access the mainframe with a single call via modem

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Correct Answer: D

Question #99

If the value of the U.S. dollar in foreign currency markets changes from US $1 = .95 euros to US $1 = .90 euros.

A. he euro has depreciated against the dollar

B. roducts imported from Europe to the U

C.

D.

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Correct Answer: B

Question #100

Dale has 20 days to complete production of an order for an important customer. The customer wants 96 units of product that may be painted either red or white. The red units can be produced at a rate of 4 per day. The white units, because of a different quality of paint, can be produced at a rate of 7 per day. The materials for the red units cost US $80 each, while the white units cost US $120 each. Dale wants to keep costs at a minimum.What is the constraint that expresses the number of units to be produced

A. R + 7W = 20

B. 4) + W = 7) <20

C. + W = 20

D. R + 7W = 96

View answer

Correct Answer: B

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