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The ETS MFT Business Exam 2025 is a comprehensive resource designed to prepare students for the Major Field Test in Business. This document includes two different versions of the exam, featuring actual exam questions and their correct answers, all verified and graded A+. Students will find the latest versions of these exams, just released for 2025, providing them with the most current material available. The content covers a variety of topics relevant to business students. It includes questions on finance, such as understanding conditions under which simple interest exceeds compound interest, and distinguishing between present and future values of cash flow streams. The document also addresses cost management, explaining concepts like sunk costs and quantity factors, crucial for making informed business decisions.
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Under which of the following conditions will a future value calculated with simple interest exceed a future value calculated with compound interest at the same rate? a) this is not possible with positive interest rates b) the investment period is very long c) the compounding is annually d) the interest rate is very high ---------CORRECT ANSWER-----------------a) this is not possible with positive interest rates Which of the following statements regarding present and future values of streams of cash payments are incorrect? a) a level stream of cash payments that continues indefinitely is known as a perpetuity; one that continues for a limited number of years is called an annuity b) the present value of a stream of cash flows is simply the sum of the present value of each individual cash flow c) shortcut formulas make the calculations for perpetuities and annuities easy d) the future value of an annuity is the sum of the future value of each individual cash flow ---------CORRECT ANSWER-----------------a) a level stream of cash
payments that continues indefinitely is known as a perpetuity; one that continues for a limited number of years is called an annuity The decision rule for the net present value is to a) accept all projects with positive net present values b) accept all projects with cash inflows exceeding initial cost c) reject all projects lasting longer than ten years d) reject all projects with rates of return exceeding the opportunity cost of capital ---------CORRECT ANSWER-----------------a) accept all projects with positive net present values One common reason for issuing two distinct classes of common stock is to a) conserve cash by offering dividends to only one class of stockholders b) sell different classes to increase profits c) restrict voting privileges from some shareholders d) allow one stock to increase in price while the other class declines --------- CORRECT ANSWER-----------------c) restrict voting privileges from some shareholders Treasury bills have a beta of zero True or False ---------CORRECT ANSWER-----------------True
Cost of Capital is the return investors could expect. True or False ---------CORRECT ANSWER-----------------True A firm's mixture of long term financing and equity financing is called ______. a) financing activities b) capital structure c) capital financing d) cost of capital ---------CORRECT ANSWER-----------------b) capital structure The Weighted Average Cost of Capital is adjusted for tax savings. True or False ---------CORRECT ANSWER-----------------True If there is a total of $800 on the balance sheet and long term bonds account for $200, what is the weighted percentage that the long term bonds hold? a) 40% b) 20% c) 15% d) 25% ---------CORRECT ANSWER-----------------d) 25% $200/$800 =.
Financial Statement Analysis is assuming relationships between the items of the balance sheet and the profit and loss account. True or False ---------CORRECT ANSWER-----------------False The Balanced Scorecard includes which of the following performance perspectives? a) Customer perspective b)financial perspective c)internal perspective d) all of the above ---------CORRECT ANSWER-----------------d) all of the above A lamp manufacturer has developed five lamp bases and four lampshades that are interchangeable. How many different arrangements of base and shade can be offered? a) 5 b) 10 c) 15 d) 20 ---------CORRECT ANSWER-----------------d) 20 _______ is a one-time variation that is explainable. a) random variation b) irregular variation c) trend
c) 2 minutes d) 1 minute ---------CORRECT ANSWER-----------------d) 1 minute Total Idle Time = (N)(CT) - est.t 6*1.5-8 = 1 minute/reel Cycle Time (CT) = A/R = [(7.5 hours/day)(60 minutes/hour)]/(300 reels/day) =450/300 = 1.5 minutes/reel Which of the following is NOT a step in Hypothesis Testing? a) formulate a decision rule b) create a critical value c) select a level of significance d) identify the test statistic ---------CORRECT ANSWER-----------------b) create a critical value A mathematical equation or formula that helps a firm in determining the economic order, quantity, and the frequency of ordering, to keep goods or services flowing to the customer without interruption or delay is; a) customer service flow b) customer "Just In Time" process c) inventory process d) inventory modeling ---------CORRECT ANSWER-----------------d) inventory modeling
The Critical Path Method (CPM) assumes all of the following EXCEPT; a) the activity time estimates are accurate and stable b) once an activity is started it continues uninterrupted until it is completed c) the project network defines a correct sequence of work in terms of technology and workflow d) activities are assumed to be dependent of one another with clearly defined start and finish dates ---------CORRECT ANSWER-----------------d) activities are assumed to be dependent of one another with clearly defined start and finish dates Queue Time is a fancy word for a) processing time b) wait time c) personal time d) responsiveness ---------CORRECT ANSWER-----------------b) wait time The value of the observation that appears the most frequently is; a) the median b) the mode c) the midpoint d) the sample ---------CORRECT ANSWER-----------------b) the mode
As you get further away from the mean, in a normal curve distribution, your probability gets _______. a) higher b) lower c) drastically higher d) unknown ---------CORRECT ANSWER-----------------b) lower A _____ is a value used to determine whether to reject the null hypothesis. a) null hypothesis b) critical value c) alternate hypothesis d) test statistic ---------CORRECT ANSWER-----------------d) test statistic A normal distribution is bell shaped, symmetrical, and asymptotic. True or False ---------CORRECT ANSWER-----------------True A Null Hypothesis is a statement developed to prove numerical evidence. True or False ---------CORRECT ANSWER-----------------False A statistical process control is utilized to ensure that a process is operating at its full potential.
True or False ---------CORRECT ANSWER-----------------True In a permutation, the order of arrangement does not matter. True or False ---------CORRECT ANSWER-----------------False A population is the entire set of individuals, or objects or interest, or the measurements obtained from all individuals. True or False ---------CORRECT ANSWER-----------------True A Standard Deviation is a constant interval throughout a normal curve distribution. True or False ---------CORRECT ANSWER-----------------True When controlling a Six Sigma process, Statistical Process Control (SPC) is an extremely effective methodology. True or False ---------CORRECT ANSWER-----------------False Mutually exclusive is defined as the occurrence of one event and that none of the other events can occur at the same time. True or False ---------CORRECT ANSWER-----------------True
The stages of team development include all of the following except a) recording b) forming c) norming d) performing ---------CORRECT ANSWER-----------------a) recording Job redesign techniques include all of the following except a) redesigning jobs b) creating or eliminating departments c) combining tasks d) forming natural work units ---------CORRECT ANSWER-----------------b) creating or eliminating departments The four management functions are planning, organizing, leading, and controlling. True or False ---------CORRECT ANSWER-----------------True Scientific management is thoroughly studying and testing different work methods to identify the best, most efficient way to complete a job. True or False ---------CORRECT ANSWER-----------------True
Companies cannot be prosecuted or punished if management did not know about unethical behavior. True or False ---------CORRECT ANSWER-----------------False Two of the six steps to rational decision making are a) define the problem and identify decision criteria b) generate alternative courses of action and compute the optimal decision c) evaluate each alternative and weigh the criteria d) all of the above ---------CORRECT ANSWER-----------------d) all of the above When a multinational company has office/plants in different countries and uses the same rules, guidelines, policies, and procedures, this is referred to as a) global consistency b) power distance c) global joint venture d) local adaption ---------CORRECT ANSWER-----------------a) global consistency The vertical and horizontal configuration of departments, authority, and jobs within a company is a) organizational process b) departmentalization
True or False ---------CORRECT ANSWER-----------------True Quality is a product or service that has deficiencies and satisfies the customer. True or False ---------CORRECT ANSWER-----------------False Types of inventories are a) raw materials b) component parts c) finished goods d) all of the above ---------CORRECT ANSWER-----------------d) all of the above Environmental change, environmental complexity, and resource scarcity are the basic components of external environments. True or False ---------CORRECT ANSWER-----------------True Two types of feedback are constructive and destructive. True or False ---------CORRECT ANSWER-----------------True Total Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations.
True or False ---------CORRECT ANSWER-----------------True Which is NOT a step in the strategy planning process? a) assessing need for change b) situational analysis c) choose strategic alternatives d) asking others if change is a good idea ---------CORRECT ANSWER-----------------d) asking others if change is a good idea What is strategic dissonance? a) a bad strategy b) the inability to make a decision c) discrepancy between a company's intent and managerial actions d) the difference between the strategies of two companies ---------CORRECT ANSWER-----------------c) discrepancy between a company's intent and managerial actions Strategic reference points are used to measure whether a firm has a) a good point of view b) lower prices c) the ability to make the best product d) developed sustainable competitive advantage ---------CORRECT ANSWER---------- -------d) developed sustainable competitive advantage
Which of the following is true regarding Production Possibilities Frontier Model of the economy? a) the opportunity cost of producing more unit of one of the goods represented in the PPF remains the same at any point along the PPF. b) increases in the resources available for production will cause the PPF to shift towards the origin c) any point along the PPF represents an efficient level of production d) any point in the area below the PPF represents a combination of production that is not feasible ---------CORRECT ANSWER-----------------c) any point along the PPF represents an efficient level or production If the price in a market happens to be above equilibrium, there will be a _____ in the market, and the price will tend to _____. a) surplus, drop b) surplus, rise c) shortage, drop d) shortage, rise ---------CORRECT ANSWER-----------------a) surplus, drop The price of elasticity of demand tends to be more elastic a) when the demand curve is vertical b) at points further down and to the right along the demand curve c) when the demand curve becomes steeper
d) at points further up and to the left along the demand curve ---------CORRECT ANSWER-----------------d) at points further up and to the left along the demand curve If a tax is imposed on a good and the incidence of the tax ends up falling more heavily on the buyers than on the sellers, this well be because a) demand is less elastic than supply for that good b) the tax was imposed on the buyers of the good c) demand is more elastic than supply for that good d) the tax was imposed on the sellers of the good ---------CORRECT ANSWER--------- --------a) demand is less elastic than supply for that good If the quantity traded in a market is less than the equilibrium quantity, a) the market will decrease its total surplus if modernist are produced b) the value to consumers for additional units is greater than the cost to sellers of producing those units c) the value to consumers for additional units is less than the cost to sellers of producing those units d) total surplus is larger than in equilibrium ---------CORRECT ANSWER----------------- b) the value to consumers for additional units is greater than the cost to sellers of producing those units A given tax will cause a bigger deadweight loss if demand and supply are a) perfectly inelastic