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COMP XM ACTUAL EXAM QUESTIONS
WITH ANSWERS
Question : What is the instruction for the product in the Low
End segment regarding movement?
Correct answer: THE ONLY PRODUCT THAT DOES NOT
MOVE, IT'S THE PRODUCT IN LOW END SEGMENT.
LEAVE THIS PRODUCT AT 3.0 AND 17.0
Question : 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)
Question : How do you 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.
Question : If a company has leverage of four, what does that
mean?
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Correct answer: If a company has leverage of four, that means
they have $4 in debt for every $1 in equity.
Question : You must calculate capacity how many rounds
ahead?
Correct answer: 2 rounds
Question : What are the 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
Question : When should you 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
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Question : When should you give out dividends?
Correct answer: it's for when you have cash leftover in capital
investment to give to your shareholder.
Question : When should you retire long-term debt?
Correct answer: it's for when you want to pay your debt early
(This usually decreases your interests expense)
Question : Describe the 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.
Question : What is the production schedule formula?
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Correct answer: ((Units Sales Forecasted) * (1.2) ) - Inventory
on Hand)
Question : What is the forecasting strategy?
Correct answer: From the Market Share page in the Capstone
Courier, take your last year's market share and multiple it by the next year demand of each segment.To calculate Next Year Demand, you take current demand and multiple it by the growth rate Multiple your Market Share by Next Year's Demand
Question : How do you find the profit margin?
Correct answer: Look at "ROS" under the Selected Financial
Statistics
Question : What is a +/- ROS directly correlated to?
Correct answer: a +/- ROA
ex) negative ROS means you will have a negative ROA