COMP XM UPDATED Exam Questions
and CORRECT Answers
Segment/Perf/Size - Correct Answer- Thrift +-0.5 -0.5
Core +0.8 -0.8
Nano +0.8 -1.1
Elite +1.1 -0.8
*THE ONLY PRODUCT THAT DOES NOT MOVE, IT'S THE PRODUCT IN LOW END
SEGMENT. LEAVE THIS PRODUCT AT 3.0 AND 17.0*
You want to increase
performance and reduce size as much as you can without the revision date reaching July.
Prices between each round - Correct Answer- Don't change the price!
Price for each product - Correct Answer- Nano - max
Elite - max
Core - a few bucks below
Thrift - a few bucks below
Automation - Correct Answer- increase automation by 1 point each round in each product
get low end up as high as you can
What is your target leverage and how do you get there? - Correct Answer- borrow money
until you hit 2.2 and get 60 days of working capital (will have to pay dividends)
To calculate leverage, - Correct Answer- divide total assets by total equity. This number will
represent the number of dollars of assets owned per dollar invested by equity holders.
,If a company has leverage of four, that means they have $4 in debt for every $1 in equity.
sales and promo budgets (all four rounds) - Correct Answer- For all products
Round 1: 2,000
Round 2: 1,500
Round 3: 1,400
Round 4: 1,400
Recruiting hours and spend - Correct Answer- $5,000
80 hours
TQM - Correct Answer- $1,500 first round
$1,500 second round
$1,000 third round
$0 fourth round
adding capacity - Correct Answer- a couple hundred each round
best date for new products to come out - Correct Answer- June 26-28th
forecasting shift capacity - Correct Answer- forecast next year's demand directly
This year's potential market share * next year's demand is a good starting point, but then
make judgment adjustments as necessary (e.g. is my product improving, are my competitors
improving, etc.)
use 200% of plant utilization
you must calculate capacity _____ rounds ahead - Correct Answer- 2 rounds
, MTBF - Correct Answer- Set to maximum amount
Steps for getting a good finance position - Correct Answer- Goals is to get a cash position of
$5,000 in Decembers
Step 1: get as much issue stock as possible
Step 2: get as much issue long-term debt
Step 3: get whatever you need left from borrow
when to retire stock - Correct Answer- when you have a good cash position and you have
some money left over to purchase stock back from the market
when to give out dividends - Correct Answer- it's for when you have cash leftover in capital
investment to give to your
shareholder.
when to retire long-term debt - Correct Answer- it's for when you want to pay your debt early
(This usually decreases your interests expense)
Buy/Sell Capacity Strategy - Correct Answer- You want to keep 2 nd Shift Production %
between 20% and 50%
If you have less than 20%; you have to sell capacity
If you more than 50% you have to buy capacity
After you make you decisions on production, check how much capital investment you have;
If you have capital investment leftover, try to spend it in Automation or Capacity
If you are spending more than you should, try to sell capacity or not invest as much.
and CORRECT Answers
Segment/Perf/Size - Correct Answer- Thrift +-0.5 -0.5
Core +0.8 -0.8
Nano +0.8 -1.1
Elite +1.1 -0.8
*THE ONLY PRODUCT THAT DOES NOT MOVE, IT'S THE PRODUCT IN LOW END
SEGMENT. LEAVE THIS PRODUCT AT 3.0 AND 17.0*
You want to increase
performance and reduce size as much as you can without the revision date reaching July.
Prices between each round - Correct Answer- Don't change the price!
Price for each product - Correct Answer- Nano - max
Elite - max
Core - a few bucks below
Thrift - a few bucks below
Automation - Correct Answer- increase automation by 1 point each round in each product
get low end up as high as you can
What is your target leverage and how do you get there? - Correct Answer- borrow money
until you hit 2.2 and get 60 days of working capital (will have to pay dividends)
To calculate leverage, - Correct Answer- divide total assets by total equity. This number will
represent the number of dollars of assets owned per dollar invested by equity holders.
,If a company has leverage of four, that means they have $4 in debt for every $1 in equity.
sales and promo budgets (all four rounds) - Correct Answer- For all products
Round 1: 2,000
Round 2: 1,500
Round 3: 1,400
Round 4: 1,400
Recruiting hours and spend - Correct Answer- $5,000
80 hours
TQM - Correct Answer- $1,500 first round
$1,500 second round
$1,000 third round
$0 fourth round
adding capacity - Correct Answer- a couple hundred each round
best date for new products to come out - Correct Answer- June 26-28th
forecasting shift capacity - Correct Answer- forecast next year's demand directly
This year's potential market share * next year's demand is a good starting point, but then
make judgment adjustments as necessary (e.g. is my product improving, are my competitors
improving, etc.)
use 200% of plant utilization
you must calculate capacity _____ rounds ahead - Correct Answer- 2 rounds
, MTBF - Correct Answer- Set to maximum amount
Steps for getting a good finance position - Correct Answer- Goals is to get a cash position of
$5,000 in Decembers
Step 1: get as much issue stock as possible
Step 2: get as much issue long-term debt
Step 3: get whatever you need left from borrow
when to retire stock - Correct Answer- when you have a good cash position and you have
some money left over to purchase stock back from the market
when to give out dividends - Correct Answer- it's for when you have cash leftover in capital
investment to give to your
shareholder.
when to retire long-term debt - Correct Answer- it's for when you want to pay your debt early
(This usually decreases your interests expense)
Buy/Sell Capacity Strategy - Correct Answer- You want to keep 2 nd Shift Production %
between 20% and 50%
If you have less than 20%; you have to sell capacity
If you more than 50% you have to buy capacity
After you make you decisions on production, check how much capital investment you have;
If you have capital investment leftover, try to spend it in Automation or Capacity
If you are spending more than you should, try to sell capacity or not invest as much.
