CFA Level 1 －模考试题(1)(AM) Q51-55

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Question 51

Spenser Inc. is forecasting is future cash flow and market share for the next year. Its market share is expected to remain the same in the future. Which of the following steps should Spenser use in forecasting its future cash flow and sales, respectively?

Forecast of future cash flow Forecast of future sales

A) Start with forecast of future sales Use growth of GDP

B) Start with historical cash flow Use growth of industry sales

C) Start with historical cash flow Use growth of GDP

D) Start with forecast of future sales Use growth of industry sales

Question 52

Lambert Builders, Inc. has begun work on a new post office. In the first year of the project, $2.5 million has been spent out of a reliably estimated total cost of $6.5 million. Total revenue expected for this project is $7 million, and as a government contractor Lambert is reasonably assured of payment. The amount of revenue Lambert should recognize for the year is closest to:

A) $2.5 million.

B) $2.3 million.

C) No revenue should be recognized.

D) $2.7 million.

Question 53

Honeychurch Inc. is an established manufacturing firm that operates in four countries. In analyzing Honeychurch’s income tax disclosures, which of the following items would least likely contribute to a difference between the firm’s reported effective tax rate and the statutory tax rate?

A) Tax differences due to payment of life insurance premiums on key employees.

B) Deferred taxes from using accelerated depreciation for taxes.

C) Different tax rates in different countries in which Honeychurch has income.

D) Tax differences due to interest on tax-free bonds.

Question 54

Undercarriage, Inc.’s cash flow from operations (CFO) in 20X1 was $23 million after Undercarriage paid $16 million in 20X1 to acquire a franchise which it capitalized and amortized over 4 years. Ignoring tax effects, if Undercarriage had expensed the franchise cost in 20X1, CFO in 20X1 would have been:

A) $11 million.

B) $39 million.

C) $7 million.

D) $35 million.