[jeff]

@h0wdyus

Incorrect

The answer is B. Comparable sales.

“The use of comparable sales is not an income approach to valuation of a business, it is a market approach. Under the comparable sales approach, the value of a business is determined by comparing it to other entities with comparable characteristics for which the value is more readily determinable.”

This was a tricky one

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[M.O.D.]

@ stoleway

Agreed, all this assumes no tax rate though:

8-4=4 (contribution margin per unit)

20000x 4 =80,000 (contribution margin total)

80000 – 30000 (fixed) = 50000 (NI)

10-4 =6 (new contribution margin)

45000(new fixed costs)/6 = 7500 (new qty breakeven)

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

@CPA_2_B

Correct

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Mass-CPA

[M.O.D.]

Controls in the information technology area are classified into the preventive, detective, and corrective categories. Which of the following is a preventive control?

A. Hash total.

B. Contingency planning.

C. Echo check.

D. Access control software.

What kind of controls are the others?

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Anonymous]

M.O.D., is it D?

Hash total might be a detective

Contingency planning….

Echo check is a detective maybe.

[stoleway]

I'm stuck between B and D because they all seem to be preventive measures, I will strongly go with D

Hash total – Detective

Echo Check- corrective?

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

D is correct

According to Gleim:

Hash total is detective

Contingency planning is corrective

Echo check is detective

Access control software is preventive

Access control software prevents entry into a system by unauthorized personnel and prevents access by authorized personnel to data elements that are unnecessary to the performance of their job duties.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Anonymous]

List the formulas for calculating both economic value added and free cash flow, and go!

[stoleway]

economic value added

After tax operating cashflow – Investment x WACC

free cash flow

After tax cash inflow + Depreciation tax shield

question…..

List 3 factors that could lead to lower NPV

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

Economic value added is also called residual income.

Some factors that could lower NPV:

Higher hurdle rate

Shorter project life

Smaller or no salvage value

straight line instead of accelerated depreciation

Lower tax rate to determine the depreciation tax shield (counter-intuitive)

Higher tax on the operating cash flow

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[Anonymous]

I am using CPA Review for Free to supplement the Becker questions to get as many MCQ in before I take the exam next Saturday. When answering a question about the APR of a quick payment discount on CPA Review, they used a base year of 365, whereas Becker uses 360. Has anyone else noted major differences between the two? The question did not state to use a 365 day year so when I answered the question, it was wrong….

[M.O.D.]

What was the question? Normally it is close enough to choose the right answer?

Gleim says to use 360 unless told otherwise.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

I have realized that cpareviewforfree uses 365 but aicpa usually give you the figure to use.

If you use 360 and the answer is not there, it wouldn't hurt tp try 365

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[M.O.D.]

Agreed. Try both. I doubt one would be a wrong answer.

Though it is true the IMA also assumed 365, and on the CMA exam, it was always given.

BA Mathematics, UC Berkeley
Certificates in CPA and EA preparation, College of San Mateo
CMA I 420, II 470
FAR 91, AUD Feb 2015 (Gleim self-study)

[stoleway]

What happens when elasticity of demand is equal to zero? is the demand curve downward sloping, upward sloping, horizontal or vertical?

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Anonymous]

Thanks everyone. I can't wait for this test to be over!

[Author]

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