AICPA CPA-Business Exam - Topic 3 Question 69 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 69
Topic #: 3

[All CPA-Business Questions]

Which one of the following management considerations is usually addressed first in strategic planning?

AOverall goals of the firm.

BOrganizational structure.

CRecent annual budgets.

DBeing an industry leader.

Show Suggested Answer

Suggested Answer: A

Choice 'a' is correct. 7.0 percent cost of funds from retained earnings.

The cost of retained earnings is equal to the rate of return required by the firm's common shareholders (or, in effect, the return 'lost' by them when the firm chooses to fund with retained earnings). While oftentimes this rate is somewhat subjective, we are given the facts to exactly answer the question in this case. The stock is currently selling for $100/share, and the dividend is given at $7/share.

$7 / $100 = 7%

Choices 'b', 'c', and 'd' are incorrect, per the above Explanation:/calculation.

by Jenelle at Apr 24, 2023, 03:44 AM

Limited Time Offer

25%

Off

Get Premium CPA-Business Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Skye

8 months ago

Yeah, overall goals set the direction for everything else.

upvoted 0 times

...

Jules

8 months ago

Surprised that being an industry leader isn't the top priority!

upvoted 0 times

...

Son

9 months ago

Recent annual budgets are usually last on the list.

upvoted 0 times

...

Luther

9 months ago

I think organizational structure should come before that.

upvoted 0 times

...

Mira

9 months ago

Definitely overall goals first!

upvoted 0 times

...

Vicente

9 months ago

I feel like recent annual budgets might come into play later in the process, so I would probably go with A as well.

upvoted 0 times

...

Antonio

9 months ago

I’m a bit confused; I thought organizational structure was also a key consideration early on. Maybe it’s B?

upvoted 0 times

...

Leatha

9 months ago

I remember a practice question that emphasized the importance of setting goals before anything else, so I’m leaning towards A.

upvoted 0 times

...

Hershel

9 months ago

I think the overall goals of the firm are usually the first thing addressed in strategic planning, but I'm not completely sure.

upvoted 0 times

...

Mose

9 months ago

This is a good test of our understanding of cloud usage models. I think the key is to focus on the specific details provided, like the customer needing extra capacity to handle seasonal spikes. Based on that, I'd say the answer is "Data center extension."

upvoted 0 times

...

Art

9 months ago

Hmm, I'm a bit confused by the wording of the options. I'll need to read through them carefully to understand the differences.

upvoted 0 times

...

Karima

9 months ago

Hmm, the key seems to be restoring load balancing while maintaining session persistence. I'm leaning towards option A, but I'll double-check the details.

upvoted 0 times

...

Ilda

10 months ago

Okay, let's see here. I think the key steps are to save the workbook as a macro-enabled file and then reopen it. The message box and macro settings seem like they might be related, but I'm not totally sure. I'll need to double-check the details on those.

upvoted 0 times

...