IMANET Exam CMA Topic 1 Question 76 Discussion

Actual exam question for IMANET's CMA exam

Question #: 76
Topic #: 1

[All CMA Questions]

Which of the following is a factor in the choice of strategy in a declining industry?

ALikelihood of an industry produce profits.

BThe nature of entrants to an industry.

CExternalities in industry development.

DMobility burners,

Show Suggested Answer

Suggested Answer: A

Since the salvage company's offer is for more than the book value of the equipment, an accrual- basis gain would result A loss on disposal of old equipment results in a tax benefit, since the loss reduces accrual basis income. Therefore, a gain. which increases accrual-basis income, results in a tax detriment, and the reduction to the net initial investment will be less than if the salvage company's offer had resulted in a loss.

by Stephaine at Oct 17, 2023, 09:39 PM

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Selma

1 months ago

Hmm, I'm going to have to say D. Mobility burners sound like they'd be a real 'pain point' in a declining industry. Haha, get it? Pain point? Mobility burners? Ah, never mind.

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Shaniqua

1 months ago

I'm going to go with A. The likelihood of an industry producing profits is crucial in deciding how to approach a declining industry. Gotta maximize those dwindling returns!

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Candra

1 months ago

I'm leaning towards C. Externalities like government regulations or market trends can really impact the strategy you need to adopt in a declining industry.

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Katina

4 days ago

A) Likelihood of an industry produce profits.

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3 months ago

I think the likelihood of an industry producing profits is important.

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