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  1. Home
  2. IIA Certification
  3. IIA-CIA-Part3 Exam
  4. IIA.IIA-CIA-Part3.v2022-03-14.q256 Dumps
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Question 51

An entity in a 40% tax bracket needs <List A> of operating income to pay 1 of interest and <List B> of pretax income to pay 1 of dividends.

Correct Answer: C
Interest is deductible from operating income to obtain taxable income but dividends are not. Thus, only 1.00 of pretax income is needed to pay 1.00 of interest, but 1.67 of pretax income [1.00 - 1.0 - 4)] is needed to pay 1.00 of dividends if the entity is in a 40% tax bracket.
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Question 52

An organization produces two products, X and Y.
The materials used for the production of both products are limited to 500 kilograms (kg) per month. All other resources are unlimited and their costs are fixed. Individual product details are as follows:
Product X Product Y
Selling price per unit $10 $13
Materials per unit (at $1/kg) 2 kg 6 kg
Monthly demand 100 units 120 units
In order to maximize profit, how much of product Y should the organization produce each month?

Correct Answer: C
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Question 53

In preparing the annual profit plan for the coming year.

Based upon the data derived from the regression analysis, 420 maintenance hours in a month would mean the maintenance costs (rounded to the nearest US dollar) would be budgeted at:

Correct Answer: D
Substituting the given data into the regression equation results in a budgeted cost of US $3,746 (rounded to the nearest US dollar).
y = a + bx = 684.65 + 7.2884(420) = US $3,746
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Question 54

In the output or "expenditures" approach to measuring a country's gross domestic product, which of the following calculations is used?

Correct Answer: A
GDP can be calculated using an income approach or an expenditures approach because what is spent on a product or service is income to those who contributed resources to its production and marketing. Thus, the amount spent to purchase the GDP is identical with the income derived from its production and sale. Under the output or expenditures approach, GDP equals the sum of consumption expenditures by households, investment by business, government purchases of goods and services, and expenditures by foreigners net exports).
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Question 55

If all else is equal, entities with higher profit margins require less additional financing for any sales growth rate. If the profit marlin of an entity increased, the funds-needed line would shift:

Correct Answer: C
A higher profit margin would reduce the additional financing needed, shifting the funds needed line down.
Topic 5, Volume E
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