SIXTEENTH EDITION Review Part Financial Decision Making Irvin N Gleim • Dale L Flesher Update Service S ca n th e Q R co d e to lin k to u p d a te s fo r th is e d itio n V is it th e G L E IM ® w e b s ite fo r fre e up da te s, w h ich a re ava ila b le until th e next e d itio n is p u b lish e d gleim.com/updates i IF FOUND, please notify and arrange return to owner, This text is an important study guide for the owner's career and/or exam preparation Email: Gleim Publications, Inc., offers five university-level study systems: Auditing & Systems Exam Questions and Explanations with Test Prep Software Business Law/Legal Studies Exam Questions and Explanations with Test Prep Software Federal Tax Exam Questions and Explanations with Test Prep Software Financial Accounting Exam Questions and Explanations with Test Prep Software CostlManagerial Accounting Exam Questions and Explanations with Test Prep Software The following is a list of Gleim examination review systems: CIA Review: CIA 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CONTRIBUTORS Garrett Gleim, B.S., CPA (not in public practice), is a graduate of the Wharton School at the University of Pennsylvania Mr Gleim coordinated the production staff, reviewed the manuscript, and provided production assistance throughout the project Grady M Irwin, J.D., is a graduate of the University of Florida College of Law, and he has taught in the University of Florida College of Business Mr Irwin provided substantial editorial assistance throughout the project John F Rebstock, B.S.A., is a graduate of the Fisher School of Accounting at the University of Florida He has passed the CIA and CPA exams Mr Rebstock reviewed portions of the manuscript Kristina M Rivet, CPA, graduated cum laude from Florida International University She has extensive public accounting experience in the areas of financial accounting, tax, and consulting Ms Rivet provided substantial editorial assistance throughout the project Stewart B White, B.M., cum laude, University of Richmond, B.S., Virginia Commonwealth University, has passed the CPA, CIA, and CISA exams and has worked in the fields of retail management, financial audit, IT audit, COBOL programming, and data warehouse management Mr White provided substantial editorial assistance throughout the project A PERSONAL THANKS This manual would not have been possible without the extraordinary effort and dedication of Jacob Brunny, Julie Cutlip, Kate Devine, Eileen Nickl, Teresa Soard, Joanne Strong, and Candace Van Doren, who typed the entire manuscript and all revisions and drafted and laid out the diagrams and illustrations in this book The authors appreciate the production and editorial assistance of Katie Anderson, Alexander Karnazes, Katie Larson, Cary Marcous, Jean Marzullo, Shane Rapp, Drew Sheppard, Katie Wassink, and Martha Willis The authors also appreciate the critical reading assistance of Brett Babir, Ellen Buhl, Lauren Bull, Reed Daines, Lawrence Lipp, and Kristina Schoen Finally, we appreciate the encouragement, support, and tolerance of our families throughout this project If you purchased this book without a cover, you should be aware that it is probably stolen property Old editions of our books are reported to us as “unsold and destroyed,” and neither the author nor the publisher has received any payment for this “stripped book.” Please report the sale of books without covers by calling (800) 874-5346 SIXTEENTH EDITION Part by Irvin N, Gleim, Ph.D., CPA, CIA, CMA, CFM i and Dale L Flesher, Ph.D., CPA, CIA, CMA, CFM ABOUT THE AUTHORS Irvin N Gleim is Professor Emeritus in the Fisher School of Accounting at the University of Florida and is a member of the American Accounting Association, Academy of Legal Studies in Business, AICPA, Association of Government Accountants, Florida Institute of CPAs, The IIA, and the IMA He has had articles published in the Journal o f Accountancy, The Accounting Review, and The Am erican Business Law Journal and is author/coauthor of numerous accounting and aviation books and CPE courses Dale L Flesher is the Arthur Andersen Alumni Professor in the School of Accountancy at the University of Mississippi and has written over 300 articles for business and professional journals, including Managem ent Accounting, Journal o f Accountancy, and The Accounting Review, as well as numerous books He is a member of the IMA, AICPA, The IIA, American Accounting Association, and American Taxation Association He is a past editor of The Accounting H istorians’ Journal and is a trustee and past president of the Academ y of Accounting Historians He is currently the vice president of finance for the American Accounting Association In 2011, he received the A lC P A ’s highest award for educators, The Distinguished Performance in Accounting Education Award, which is a lifetime achievement award Previously, in 1990, he received The Institute of Internal Auditors Radde Award as the Outstanding Auditing Educator worldwide Gleim Publications, Inc P.O Box 12848 University Station Gainesville, Florida 32604 (800) 87-GLEIM or (800) 874-5346 (352) 375-0772 Fax: (352)375-6940 Internet: www.gleim.com Email: admin@gleim.com For updates to the first printing of the sixteenth edition of CMA Review: Part Go To: www.gleim.com/updates Or: Scan code with your mobile device Or: Email update@gleim.com with CMA 16-1 in the subject line You will receive our current update as a reply Updates are available until the next edition is published ISSN: 2152-6419 ISBN: 978-1-58194-201-9 Copyright © 2012 by Gleim Publications, Inc First Printing: July 2012 ALL RIGHTS RESERVED No part of this material may be reproduced in any form whatsoever without express written permission from Gleim Publications, Inc ACKNOWLEDGMENTS The authors are indebted to the Institute of Certified Management Accountants (ICMA) for permission to use problem materials from past CMA examinations Questions and unofficial answers from the Certified Management Accountant Examinations, copyright © 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V TABLE OF CONTENTS Page Preface for CMA Part Candidates vi Preparing for and Taking the CMA E x a m Study Unit Ethics For the Organization and Basic Financial Statements 17 Study Unit Ratio Analysis 59 Study Unit Profitability Analysis and Analytical Issues — 91 Study Unit Investment Risk and Portfolio Management Study Unit Financial Instruments and Cost of Capital — 173 Study Unit Managing Current Assets — — 215 Study Unit Raising Capital, Corporate Restructuring, and InternationalFinance 253 Study Unit CVP Analysis and Marginal Analysis — 313 Study Unit Decision Analysis and Risk Management 343 Study Unit 10 Investment Decisions — 387 Appendix A: ICMA Content Specification Outlinesand Cross-References 429 Appendix B: ICMA Suggested Reading List 437 Appendix C: Types and Levels of Exam Q uestions 439 Index 445 Order F o rm 457 Have something to say? Tell Gleim what's on your mind! PREFACE FOR CMA PART CANDIDATES The purpose of this book is to help you prepare yourself to pass Part of the two-part CMA examination The overriding consideration is to provide an inexpensive, effective, and easy-to-use study program This manual Explains how to optimize your grade by focusing on Part of the CMA exam Defines the subject matter tested on Part of the CMA exam Outlines all of the subject matter tested on Part in 10 easy-to-use-and-complete study units Presents multiple-choice and essay questions from past CMA examinations to prepare you for questions in future CMA exams The multiple-choice answer explanations are presented to the immediate right of each question for your convenience Use a piece of paper to cover our explanations as you study the questions Suggests exam-taking and question-answering techniques to help you maximize your exam score The outline format, the spacing, and the question-and-answer formats in this book are designed to facilitate readability, learning, understanding, and success on the CMA exam Our most successful candidates use the Gleim CMA Review System*, which includes books, Test Prep Software, Audio Review, Gleim Online, Essay Wizard, FREE Practice Exams (available Summer 2012), and access to a Personal Counselor; or a group study CMA review program (Check our website for live courses we recommend.) This review book and all Gleim CMA Review materials are compatible with other CMA review materials and courses that are based on the ICMA’s Content Specification Outlines To maximize the efficiency and effectiveness of your CMA review program, augment your studying with CMA Review: A System for Success This booklet has been carefully written and organized to provide important information to assist you in passing the CMA examination Thank you for your interest in our materials We deeply appreciate the thousands of letters and suggestions we have received from CIA, CMA, CPA, and EA candidates and accounting students and faculty during the past decades If you use Gleim materials, we want YOUR feedback immediately after the exam and as soon as you have received your grades The CMA exam is NONDISCLOSED, and you must maintain the confidentiality and agree not to divulge the nature or content of any CMA question or answer under any circumstances We ask only for information about our materials, i.e., the topics that need to be added, expanded, etc Please go to www.gleim.com/feedbackCMA2 to share your suggestions on how we can improve this edition Good Luck on the Exam, Irvin N Gleim DaleL.FIesher PREPARING FOR AND TAKING THE CMA EXAM Transition to Two-Part Exam Follow These Steps to PASS the Exam Introduction to CMA Overview of the CMA Examination Subject Matter for Part Learning Outcome Statements Which Pronouncements Are Tested? How Ethics Are Tested Nondisclosed Exam , , , „,, — , — , , — The ICMA’s Requirements for CMA Designations CMA Exam F e e s Maintaining Your CMA Designation Eligibility Period 3 4 4 5 Preliminary Testing: Gleim CMA Diagnostic Quizzes — How to Study a Study Unit Using the Gleim Review System 8 Gleim Books CMA Test Prep Software Studying with Books and Software Gleim Audio Reviews Final Review: Gleim CMA Practice Exam Time-Budgeting and Question-Answering Techniques for the E xa m Essay Questions Essay Grading How to Be in Control while Taking the E xam 10 11 11 12 12 12 14 16 16 TRANSITION TO TWO-PART EXAM In 2010, the ICMA changed the CMA program from a four-part to a two-part exam Candidates are now able to enter only into the two-part program; i.e., old exam Parts 1, 2, 3, and are no longer available to complete Candidates who previously began the four-part exam process can transition to the new exam If they passed old Part 2, they only have to pass new Part to complete the CMA If they passed old Part 3, they only have to pass new Part to complete the CMA If both old Parts and were passed, a 2-hour transition exam must be taken to complete the CMA The Transition Exam will be available until February 28, 2013 Preparing for and Taking the CMA Exam FOLLOW THESE STEPS TO PASS THE EXAM Read this Introduction to familiarize yourself with the content and structure of Part of the CMA exam In the following pages, you will find a b An overview of Part and what it generally tests, including the ICMA’s Content Specification Outlines (CSOs) A detailed plan with steps to obtain your CMA certification, including c 1) The order in which you should apply, register, schedule your exam, and buy your study materials 2) The studying tactics on which you should focus 3) How to organize your study schedule to make the most out of each resource in the Gleim CMA Review System (i.e., books, Test Prep Software Download, Audio Review, Gleim Online, Essay Wizard, Diagnostic Quizzes, Practice Exams, etc.) Tactics for your actual test day, including 1) Time budgeting, so you complete all questions with time to review 2) Question-answering techniques to obtain every point you can 3) An explanation of how to be in control of your CMA exam Scan the Gleim CMA Review: A System for Success booklet and note where to revisit later in your studying process to obtain a deeper understanding of the CMA exam a CMA Review: A System for Success has seven study units: Study Unit 1: Study Unit 2: Study Unit 3: Study Unit 4: Study Unit 5: Study Unit 6: Study Unit 7: The CMA Examination: An Overview and Preparation Introduction ICMA Content Specification Outlines Content Preparation, Test Administration, and Performance Grading Multiple-Choice Questions Essay Questions Preparing to Pass the CMA Exam How to Take the CMA Exam BEFORE you begin studying, take a Diagnostic Quiz at www.gleim.com/cmadiagnosticquiz or use our Gleim Diagnostic Quiz App for iPhone, iPod Touch, and Android a The Diagnostic Quiz includes a representative sample of 40 multiple-choice questions and will determine your weakest areas in Part b When you are finished, one of our Personal Counselors will consult with you to better focus your review on any areas in which you have less confidence Follow the steps outlined on page 8, “How to Study a Study Unit Using the Gleim CMA Review System.” This is the study plan that our most successful candidates adhere to Study until you have reached your desired proficiency level (e.g., 75%) for each study unit in Part a b As you proceed, be sure to check any Updates that may have been released 1) Gleim Online and Essay Wizard are updated automatically 2) Test Prep Software is updated by the Online Library Updates system in the Tools menu of your Test Prep You can (and should) set your Test Prep to automatically update at least once a month 3) Book updates can be viewed at www.gleim.com/updates, or you can have them emailed to you See the information box in the top right corner of page iv for details Review the CMA Review: A System for Success booklet and become completely comfortable with what will be expected from you on test day 446 Index Cash Budget 219 Collections 220 Conversion cycle 223 Cycle 67 Dividend .267 Flow 37, 219, 391, 405 At risk 364 Patterns 399 Ratio 62 Uncertainty evaluation 153 Management 218 Offer 264 Payments 219 Position 266 Ratio 62 Receipts 219 Certainty equivalent adjustments 407 Certificates of deposit (CDs) .223 Changes in equity 26, 35 Chapter 277 11 278 CIA exam 16 Code of ethics 20 Coefficient of variation 147 Commercial paper 222, 233 Commodity-backed bonds 176 Common -Size financial statements 39 Stock 179 Company risk 144 Compensating balance 221,232 Competition-based pricing 356 Completion-of-production method 104 Comprehensive income 26, 36 Computation Monopolistic 326 Pure 324 Consolidation 269 Continual process improvement (C P I) 25 Contribution margin ratio 315 Convertible Bonds 176 Securities 192 Correlation coefficient (r) 147 Corrupt payments 19 COSO Framework enterprise risk management (E R M ) 364 Cost Accounting 319 Avoidable 346, 389 Based pricing 358 -Benefit analysis 368 Common .389 Deferrable .389 Explicit 319 Fixed 314,389 Flotation 260 Implicit 320 Imputed 389 Incremental 346, 389 Incurrence 359 Marginal 321 Of Capital 193,196 Goods Manufactured 34 S o ld 34 Opportunity 320, 390 Plus price 358 Recovery method 104 Relevant , 390 Sunk 390 Target 358 Value-added 359 Variable 314 -Volume-profit (CVP) 314,316 Whole-life 359 Countertrade 295 Coupon rate 175 Covariance 148 Credit Default swaps 191 Risk 145 Cross -Border factoring .294 R a te 282 Crown jewel transfer 273 Currency Options .292 Swaps 191,293 Current Assets 29, 61 Liabilities 30,61 Maturities of long-term debt 30 Ratio 61 Date Ex-dividend 267 Declaration 266 Distribution , 266 Record 266 Days’ Purchases in accounts payable 66 Sales In inventory 65 Outstanding in receivables 64, 224 Debentures 176 Subordinated 177 D ebt 69 Decision tree analysis 408 Index Decisions Make-or-buy .349 Sell-or-process 350 Deep-discount bonds 176 Default risk 223 Deferred charges 30 Degree of Financial leverage (D FL) 73 Operating leverage (D O L ) 71 Demand 351 Depreciable life .391 Depreciation 106 Derivatives 184 Desired rate of return 390 Determinants of demand 352 Diluted earnings per share (DEPS) 100 Direct Foreign investment 293 Method 37 Disclosures 26 Discontinued operations 35 Discount 230 R a te 396 Discounted Cash flow analysis 394 Loans 231 Payback method 403 Disinvestment 347 Diversifiable risk 148 Diversification 148,275 Dividend Payout i 183 Ratio 100 Policy 265 Reinvestment plans (DRPs or DRIPs) 268 Yield 101,183 Downward (black hole) demand spiral 358 Draft 221 DuPont m odel 95 Duration hedging .155 447 Ethics 19, 21 Eurodollars 223 E ven t 366 Inventories 366 Exchange te s 279 Fixed 280 Freely floating 280 Long-term 289 Managed flo a t 281 Medium-term ■• ■■289 Pegged 281 Short-term 289 Expected 153 Net cash flows Rate of return 146 Expenses 34,106 External users of financial statements 27 Extraordinary items 35 Facilitated workshops and interviews 367 Facilitation payments 20 Factoring 233 Fair Price provisions 272 Value Accounting 119 Measurements 119 Option 119 Fama-French model 151 Federal agency securities 222 Financial instruments 145 Intermediaries 256 Leases 269 Leverage 1,15 Markets 254 R is k 152 Statements 26 Financing 294 Activities 38 Long-term 192 Reporting 26 Earnings Secured 233 At risk 364 Short-term 229 Coverage 70 Structure 30 Distributions 364 Fixed Per share (EPS) 99,183 Assets turnover ratio 67 Quality 102 Exchange te 280 Yield 100 Flesher, Dale L iii EBITDA 94 Flexibility option 409 Economic FlipC o sts 319, 320 In rights 273 Life 391 Over rights 273 Order quantity (E O Q ) 218,228 Foreign Profit 102,320 Corrupt Practices Act (FCPA) 19 Effective interest rate 231 Currency 279 Foreign currency loan 284 Exchange 108,279 Efficient markets hypothesis (EMH) 257 R is k .145 Employee Forfaiting 295 Stock ownership plan (ESOP) 273 Forward Training 23 Contracts 190,292 Enterprise risk management (ERM) 360 Discount 282 COSO Framework 364 Premium 281 E quity 31,35,69,179 R a te 281 Escalation or threshold triggers 367 448 Index Freely floating exchange rate 280 Future value (FV) of an am ount 395 Futures contracts 190,291 General and administrative expenses 34,106 Gleim, Irvin N iii Going private 271, 272 Gold standard 280 Golden parachutes 272 Grease payments 20 Greenmail 272 Gross profit margin 93,105 Hedging 154,184, 290, 363 Horizontal analysis 40 Hostile takeover .270 Human Capital 22 Performance feedback loop 23 Hurdle rate 396 Image-oriented objectives 354 Immediate recognition 104 Income 103 Bonds .177 Comprehensive 26, 36 Effect 351 Statement , • 32 Tax 30 Expense 106 Transactions 32 Indenture 175 Indifference curve 153 Indirect method 37 Industry risk 145 Inflation 101,394 Informal method 407 Initial public offerings (IPOs) 261 Insider trading 268 Installment sales method 104 Insurance H azard 362 Liability 362 Intangible a ss e t 29 Interest 394 Expense 34,106 Rate Futures contracts 155 Parity (IRP) theory 288, 289 R is k 145 Swaps 191 Internal Analysis 367 Capital market 404 Rate of return (IRR) 397 Users of financial statements 27 International Accounting Standards 114 Board (IASB) 114 Committee (IASC) 114 Financial Reporting Standards (IFRS) 114,115 Comparison to U.S GAAP .116 Fisher effect (IFE) theory 288 Tax considerations 295 T rad e .293 Inventory 225 C osts 226 Replenishment .227 Turnover 65 Investing activities 38 Investment Banking 259 Decisions 405 Follow-up 409 Foreign 293 Long-term 29 Projects 404 R isk 144 Issuing stock 273 Just-in-time (JIT) inventory 229 Kaizen 358 Kanban system 229 Law of demand 351 Lead time 227 Leadership by example 22 Leading event indicators 367 Lease 192, 269 269 Financing Legal Action 273 Behavior 21 Restrictions 266 Letters of credit 294 Leverage 71 Leveraged buyout (LBO ) 271 Liability Current 30 Noncurrent 30 Life-cycle costing 359 Linear programming 404 Line of credit 230, 232 Liquidation 277 Liquidity 60 Risk 145 Loan 230 Lockbox system 220 Long-term investments 29 Loss event data methodologies 367 Maintenance and repairs expense 106 Make-or-buy decisions 349 Managed float exchange rate 281 Margin of safety 315 Index Marginal Analysis 319, 346 Cost of capital 196 Revenue Marked to market 190 Market -Based Instruments .232 Pricing 356 R is k 144,149 Premium 150 Marketable securities 222 Markets Auction 255 Over-the-counter (OTC) 256 Primary 255 Secondary 255 Matching 103, 234 Maturity matching .234 M erger 269 Money m arket 255 Hedges 291 Instruments 222 Monopoly 326 Monte Carlo technique 408 Mortgage bonds 176 Multinational corporations 294, 295 Net Cashflow 391, 392 Initial investment 392 Operating income to sales ; 97 Present value (N PV ) 396 Profile 399,401 Profit margin 94, 96 Working capital 61 Ratio 62 New product Option .409 Pricing 356 Noncurrent Asset 29 Liability 30 Normal profit 320 N otes 26 449 Payback 402 Period 402 Reciprocal 403 Payment float .221 Pegged exchange rate 281 Percentage-of-completion method 104 Poison p ill 272 Political risk 145 Portfolio 148 Management 153,368 R is k 147 Post-investment audits , 394 Potential common stock (PCS) 99 Preferred stock .180 Present value (PV) of an am ount .394 Price Adjustments 356 Discrimination 357 Earnings (P/E) ratio 184 Elasticity of demand 351,352,355 Setting factors .354 Pricing Approaches, general .356 By intermediaries 356 Objectives 354 Process flow analysis 367 Product Life cycle 359 Mix pricing 357 Profit maximization 322, 354 Short-run 324 Profitability Analysis 95,103 Index .404 Ratios 93 Project termination cash flow s 392 Property, plant, and equipment (PPE ) 29 Prospectus 263 Proxy contest 270 Purchasing power 283 Parity (PPP) theory 288,289 Pure competition 324 Put -Call parity .188 Options 187 Quality management 25 Quasi-reorganization 36 Quick (acid test) ratio 62 Off-balance-sheet financing 112 Oligopoly 326 Operating Activities 37 Rate of C y c le 29,66 Growth 266 Leases 113, 269 Return 144 Leverage 71,152 Profit margin 93 Rating agencies 258 Optimal capital structure 195 Option valuing 189 Options .185 Call 186,409 P u t 187,409 Organizational culture 23 Other comprehensive income (O C I) 36 450 Index Ratio Cash 62 Flow 62 To fixed charges 71 Current 61 Debt to Equity 70 Total assets 70 Dividend payout 100 Earnings to fixed charges 71 Fixed assets turnover 67 Long-term debt to equity capital 70 Market/book 98 Net working capital 62 PriceBook 184 Sales 184 Price/earnings 98 Quick (acid test) 62 Times interest earned 70 Total Assets turnover 68 Debt to Equity capital 69 Total capital 69 Ratios Activity 63 Capital structure 69 Earnings coverage 70 Limitations .101 Liquidity 60 Market 98 Per-share 183 Profitability 93 Solvency 68 Real (managerial or strategic) options 408 Receivables .223 Factoring 233 Formulas 224 Pledging 233 Registered bonds 177 Reinvestment rate .400 Relevant revenues and costs 345 Remeasurement 111 Reorder point .227 Reorganization 278 Repairs and maintenance expense 106 Replicating portfolio method 408 Report (vertical) form 28 Repurchase agreements (repos) 222 Residual theory of dividends 266 Restrictions in debt agreements 266 Restructurings 273 Retained earnings : 192,266 Return 144 On Assets (ROA) 94 Common equity (ROCE) 96, 97 Equity (R O E ) 94 Revenue 103 Bonds 177 Recognition 104 Reverse tender 273 Rights o ffe r 264 R is k 144, 152, 360, 364 Adjusted discount rates 407 Analysis 407 Analytics 368 And return 145 Appetite 362 Assessment 363 Avoidance 361 Business 152 Exploitation 361 Financial 152,360, 363 Hazard 360 Identification 363 Inherent 361 Investor attitudes 145 Management 360, 364 Mapping 363 Operational 360, 363 Portfolio 147 Ranking 363 Reduction (mitigation) 361 Residual 361 Retention .361 Security 147 Sharing 361 Strategic 360 Transfer 361 Robinson-Patman A c t 357 Safety stock 227 Sale-leaseback 269 Sarbanes-Oxley Act of 2002 20 Second mortgage bonds 177 Securities and Exchange Commission (SEC) 262 Registration 262 Security risk 147 Selling expenses 34,106 Sensitivity analysis .407 Serial bonds .176 Service leases .269 Share repurchase 268 Signaling hypothesis 265 Simple interest loan 230 Simulation analysis 407 Sinking fun d 176 Slope of the regression lin e .149 Solvency 68 Special Orders 319, 348 Purpose entities (SPEs) 113 Specific risk 148 Spontaneous financing 229 Spot rate .281 Spread 260 Stability of earnings 266 Stabilization objectives 354 Standard deviation 146 Stated rate 175 Statement of Cashflows 37 Equity (changes in equity) 35 Financial position 28 Income 26 Retained earnings 26, 32, 35 Index Stock Common 179 Dividend 267 Preferred 180 Purchase warrant 192 S p lit 267 Valuation 181 Subordinated debentures 177 Substitution effect 351 Sustainable equity growth te 97 Swaps 191 Synergy 275 Systematic risk 144 Takeover 270 Target Margin maximization 354 Operating income 316 Price 358 Tax 389 Position of shareholders .266 Tender offer 270 Term Bonds 176 Loan 230 Structure of interest rates 175 Total asset turnover 96 Ratio 68 Transfer pricing 295 Translation j 111 Treaties j 295 Trend percentage analysis s 103 U.S Treasury obligations 222 Underwriter 260 Undiversifiable risk 149 Unit contribution margin (UCM) 315 Unsystematic risk .144 Users of financial statements 27 Value At risk (VaR) 364 Engineering 359 Variable rate bonds 176 Vertical analysis 40 Volatility 360 Volume-oriented objectives .354 Wait and learn 409 Watergate 19 Weighted-average cost of capital (WACC) 194,390 Whistleblowing framework 24 White knight merger 273 Window dress 101 Wire transfer 220 Working capital 61, 216, 391 451 ZeroBalance account (ZBA) 221 Coupon bonds .176 Notes Notes Notes Notes 455 456 Notes 457 Page of GLEIM CPA REVIEW SYSTEM All sections, including Gleim Online, Review Books, Test Prep Software 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Call 800.874.5346 today for details CONTAINS: •G L E IM O NLINE ✓ Versatile and interactive self-study review program delivered via the Internet Each online candidate receives access to a Personal Counselor to help with the m aterial • TEST PREP SOFTW ARE ✓ Enables you to improve your study process and test yourself in an interactive environm ent with past exam questions, com pletely updated to reflect the current body of knowledge ✓ Tracks your progress and maintains a perform ance history to help you strengthen your w eak areas • AUDIO REVIEW ✓ Gives you a thorough overview explaining core concepts • BO O K ✓ Explains how to optim ize your exam score by giving you test-taking and tim e-m anagem ent inform ation ✓ M anageable, easy-to-com plete study units, each including intuitive, extensive outlines, m ultiple-choice questions, and essay questions • FREE UPDATE SERVICE ✓ Updates are available until the next edition is published Maintain your com petitive edge over other CMA candidates at no additional cost! For details, visit our website: gleim.com/updates or see page iv of your book SUCCESS GUARANTEED! / G len KNOWLEC TRANSFgRl fS T E G le im P u b l ic a t io n s , I n c P.O Box 12848 • University Station Gainesville, FL 32604 800.874.5346 • gleim.com ISBN 978-1-58194-201-9 0 0 781581 942019 ... Management Skills A System for Success i CMA Review: Part 1, Financial Planning, Performance, and Control CMA Review: Part 2, Financial Decision Making CMA Review: A System for Success CPA Review:... ICMA’s Levels of Performance (A, B, and C) is provided in Appendix C, which is a reprint of the ICMA’s discussion of “Types and Levels of Exam Questions.” Part 2: Financial Decision Making Financial. .. for and Taking the CMA Exam THE ICMA’S REQUIREMENTS FOR CMA DESIGNATIONS The CMA designation is granted only by the ICMA Candidates must complete the following steps to become a CMA: Become a member