Discuss IMANET CMA Exam Topic 6 Question 32

Of the following decisions, capital budgeting techniques would least likely be used in evaluating the

AAcquisition of new aircraft by a cargo company.

BDesign and implementation of a major advertising program.

CTrade for a star quarterback by a football team.

DAdoption of a new method of allocating nontraceable costs to product lines.

Suggested Answer: D

Capital budgeting is the process of planning expenditures for investments on which the returns are expected to occur over a period of more than 1 year. Thus, capital budgeting concerns the acquisition or disposal of long-term assets and the financing ramifications of such decisions. The adoption of a new method of allocating, nontraceable costs to product lines has no effect on a company's cash cows, does not concern the acquisition of long- term asset and is not concerned with financing Hence, capital budgeting is irrelevant to such a decision.

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13 comments · newest first

Pete 11 months ago

Totally agree, B is the least likely for capital budgeting!

Marlon 12 months ago

Wait, are we really not using capital budgeting for advertising? Seems off.

Mayra 12 months ago

A is a big capital decision, so it’s not that one.

Gianna 12 months ago

I think C makes sense too, not really a capital investment.

Eura 1 year ago

Definitely B, advertising isn't usually capital budgeting.

Elbert 1 year ago

The nontraceable costs allocation seems like it wouldn't fit capital budgeting either, but I can't recall the exact reasons we covered in class.

Cristy 1 year ago

I think the trade for a star quarterback might be less about capital budgeting since it's more of a strategic decision rather than an investment analysis.

Meaghan 1 year ago

I remember we discussed how capital budgeting techniques are mainly used for long-term investments, but I'm not sure about the advertising program.

Elza 1 year ago

I feel like the aircraft acquisition would definitely use capital budgeting, but I’m uncertain about the advertising program being evaluated that way.

Ty 1 year ago

Okay, I think I've got a handle on this. The key here is that the developer is seeing the data in the Debug Log, but the response is still empty. That suggests the data is being extracted properly, but it's not being added to the final response. So my money's on option B as the answer.

Dahlia 1 year ago

Okay, I've got this. Data can be recorded as numbers, symbols, or raw facts, so the correct answer is (D).

Mirta 1 year ago

I remember learning about HIPAA in class, but I'm drawing a blank on the specifics right now. I'll have to re-read the question and options closely to figure this out.

Charlene 1 year ago

Hmm, this looks like a tricky one. I'll need to carefully review the resource types and the Azure Backup capabilities to determine which ones can be backed up to the Vault1 recovery services vault.

IMANET CMA Exam - Topic 6 Question 32 Discussion