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COMP XM Questions and Answers 2024/2025 Graded A+
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COMP XM Questions and Answers 2024/2025 Graded A+
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COMP XM Questions and Answers2024/2025 Graded A+
"Normal" cash balances should be - ANSWER-in the 5% - 10% of sales.
(acumen builder 2)
Able currently has capacity of 1800 and can make 3600 sensors by running two shifts.
Based on last year's unit sales, if Able had wanted 125% plant utilization last year, how
much capacity should they have had? - ANSWER-A plant utilization of about 125% is
excellent for maximizing returns (this is explained in detail in the "Production Analysis
Deep Practice Exercise").
To solve this problem, divide the units sold by the target plant utilization rate.
Specifically, divide Able's unit sales last year by 1.25 to find the answer (1,086)
(acumen builder 4)
If Cake were to downsize capacity by 400,000 and increase automation from 5 to 6,
what would the savings before taxes total after four years? - ANSWER-a+b = c
d
d*4 = e
c+e = $4,098,320
A) savings from selling 400K in capacity (sell 1 unit of capacity at 5 automation = $16.90
saved)
B) cost to increase automation by 1 on 1,400,000 unites of capacity ($4 cost for every
unit of capacity)
C) net plant investment savings
D) annual labor savings of 10% of labor expense ($0.77) times last years sales
(954,000) = annual cost of savings
E) annual labor savings multiplied by 4 years remaining in the simulation
F) total savings over 4 years from reducing capacity and investing in automation
(acumen builder 5)
Dot is considering automating their line from an automation level of six to eight. If they
do this, what will the (before tax) payback period be on this investment? - ANSWER-
,Current capacity on page 4 - 1000Automation cost per unit is 4 and 2 level increase:
1000 * 4 * 2 = 8,000Annual saving in labor cost9.36 (current labor cost) * .2 (20%
reduction) * 1683 (# of sensors sold) = 3150
(1000 * 4 * 2) / (9.36 * .2 * 1683) = 2.5 years
(acumen builder 5)
Erie is considering changing their receivables policy from net 30 days to net 45 days to
stimulate sales. How much more cash will this receivables policy change tie up? If Eric
borrows money at 12.9% what will the annual
interest charges be on the additional receivable balance? - ANSWER-Sale $125107 X
(45/365) = 15424
15424 - current inventory (10283) Or current balance X 1.5 = 5141
5141 X interest rate
Calculate the percent of the year (365 days) that the new receivable policy represents
(45 days).
Multiply the percentage by Erie's sales on page 1. This is the average receivables
balance at 45 days.
Subtract Erie's current receivable balance in the "Balance Sheet Survey" on page 3
from the average receivables balance at 45 days. This is Erie's increased investment in
receivables or the amount of cash the new receivables policy change will tie up.
Multiply Erie's increased investment in receivables by 12.9% to get the annual interest
charge.
(acumen builder 6)
What was Chester's average collection period (days sales outstanding) for their
receivables? - ANSWER-To find the average collection period (days sales outstanding),
divide accounts receivable on the balance sheet by the sales revenue on the income
statement.
Multiply the product of that calculation by 365 to get the number of days the average
accounts receivable balance is outstanding.
Answer = 30 days
(acumen builder 7)
Andrews is considering changing their receivables policy from net 30 days to net 42
days to stimulate sales. Based on a 365 day year, how much more cash will this policy
, change tie up in receivables? - ANSWER-*A/R from b/s * 42/30 then see the increase
(difference) from current A/R*
Calculate the percent of the year the new receivable policy represents
Multiply the percentage by Andrews's sales in the "Income Statement Survey" on page
3. This will be the average receivables balance for 42 days.
Subtract Andrews's current receivable balance in the "Balance Sheet Survey" on page 3
from the average receivables balance for 42 days. This is Andrews increased
investment in receivables or the amount of cash the new receivables policy change will
tie up.
(acumen builder 7)
Andrews is considering changing their receivables policy from net 30 days to net 42
days to stimulate sales. Based on a 365 day year, how much more cash will this policy
change tie up in receivables? - ANSWER-A/R from b/s * 42/30 then see the increase
(difference) from current A/R
4,733,836
(acumen builder 7)
How many months of inventory does Dixie have? - ANSWER-618 current inventory
divided by the product from above
4.2 months
(acumen builder 7)
If Baldwin would have paid out 40% of their net income as a dividend, what dividend per
share would it have declared? - ANSWER-Find out net income of Baldwin first. Multiply
with 40%. Then Divide the product by number of shares outstanding.
$3.31
A +/- ROS is directly correlated to - ANSWER-a +/- ROA
ex) negative ROS means you will have a negative ROA
A company's stock price is a function of - ANSWER-its book value, earnings per share
(EPS), annual dividend, and number of shares outstanding.
It is not a coincidence that the company with the lowest profits, lowest book value per
share, and most shares outstanding has the lowest stock price.
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