ETS MFT BUSINESS EXAM 2026
COMPREHENSIVE STUDY GUIDE FULL
SOLUTIONS PASSED A+
◉ After an extensive recruitment process to select well-qualified
individuals, a large percent of a company's new hires resigned within the
first month of the job. Which of the following is the most likely
explanation for this situation?
(A) The training process to prepare the new hires for their assigned tasks
was inadequate.
(B) The health benefits provided by the company were not competitive
with those of the rest of the industry.
(C) The starting salary for the new hires was not competitive with that of
the rest of the industry.
(D) The new hires lacked the basic skills required to learn the job..
Answer: (A) The training process to prepare the new hires for their
assigned tasks was inadequate.
◉ Prosco Ltd. employs a process cost system. Inspection of units occurs
at the 50 percent mark. Defective units are then removed from the
process,
and their cost ($4.50) is absorbed by the good units. Prosco has recently
been approached by a firm wishing to buy the defective units for a
special use. The firm would require Prosco to modify the defective units
at a unit cost of $2.00. If Prosco sells the defective units to the firm for
$5.00 each, how would Prosco's reported income be affected?
,(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
(D) It would increase by $5.00 per unit sold.. Answer: (C) It would
increase by $3.00 per unit sold.
◉ Some companies have little, if any, net income or earnings, yet they
seem to have all the money they
need for capital expenditures. Which of the following best explains how
such companies operate?
(A) They have good cash flows.
(B) They lease capital equipment that does not show up on balance
sheets.
(C) They have accounts with many different banks.
(D) They issue warrants to their officers.. Answer: (A) They have good
cash flows.
◉ The Sintar Corporation has just announced that it will pay $1.10 per
share in dividends to its stockholders in the current quarter. The prior
quarter's dividend was $1.00 per share. The announcement indicates
which of the following?
(A) Management is sending a signal that it expects the economy to
expand.
(B) Management is sending a signal that the company has good
projected future earnings.
, (C) While the company was able to pay a higher dividend, management
preferred a more conservative figure.
(D) The company has overextended its cash position and may have
liquidity problems in the future.. Answer: (B) Management is sending a
signal that the company has good projected future earnings.
◉ Wave Inc. is a telecommunications company that wants to become
involved in e-commerce. It has to
decide whether to develop a business-to-business or business-to-
consumer strategy. As Wave's strategic planner, you have been asked to
develop a business plan for each opportunity and present these to senior
management. The answer to which of the following questions is most
important to know before starting your plan?
(A) What are the company's core competencies?
(B) What is the potential market size?
(C) What is the impact on the estimated revenue?
(D) Does the company have e-commerce
capabilities?. Answer: (A) What are the company's core competencies?
◉ If you were the holder of a call option (having cost you $2) on some
stock with an exercise price of
$20, it would be best for you to exercise your option when the market
price is at
(A) $18
(B) $20
COMPREHENSIVE STUDY GUIDE FULL
SOLUTIONS PASSED A+
◉ After an extensive recruitment process to select well-qualified
individuals, a large percent of a company's new hires resigned within the
first month of the job. Which of the following is the most likely
explanation for this situation?
(A) The training process to prepare the new hires for their assigned tasks
was inadequate.
(B) The health benefits provided by the company were not competitive
with those of the rest of the industry.
(C) The starting salary for the new hires was not competitive with that of
the rest of the industry.
(D) The new hires lacked the basic skills required to learn the job..
Answer: (A) The training process to prepare the new hires for their
assigned tasks was inadequate.
◉ Prosco Ltd. employs a process cost system. Inspection of units occurs
at the 50 percent mark. Defective units are then removed from the
process,
and their cost ($4.50) is absorbed by the good units. Prosco has recently
been approached by a firm wishing to buy the defective units for a
special use. The firm would require Prosco to modify the defective units
at a unit cost of $2.00. If Prosco sells the defective units to the firm for
$5.00 each, how would Prosco's reported income be affected?
,(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
(D) It would increase by $5.00 per unit sold.. Answer: (C) It would
increase by $3.00 per unit sold.
◉ Some companies have little, if any, net income or earnings, yet they
seem to have all the money they
need for capital expenditures. Which of the following best explains how
such companies operate?
(A) They have good cash flows.
(B) They lease capital equipment that does not show up on balance
sheets.
(C) They have accounts with many different banks.
(D) They issue warrants to their officers.. Answer: (A) They have good
cash flows.
◉ The Sintar Corporation has just announced that it will pay $1.10 per
share in dividends to its stockholders in the current quarter. The prior
quarter's dividend was $1.00 per share. The announcement indicates
which of the following?
(A) Management is sending a signal that it expects the economy to
expand.
(B) Management is sending a signal that the company has good
projected future earnings.
, (C) While the company was able to pay a higher dividend, management
preferred a more conservative figure.
(D) The company has overextended its cash position and may have
liquidity problems in the future.. Answer: (B) Management is sending a
signal that the company has good projected future earnings.
◉ Wave Inc. is a telecommunications company that wants to become
involved in e-commerce. It has to
decide whether to develop a business-to-business or business-to-
consumer strategy. As Wave's strategic planner, you have been asked to
develop a business plan for each opportunity and present these to senior
management. The answer to which of the following questions is most
important to know before starting your plan?
(A) What are the company's core competencies?
(B) What is the potential market size?
(C) What is the impact on the estimated revenue?
(D) Does the company have e-commerce
capabilities?. Answer: (A) What are the company's core competencies?
◉ If you were the holder of a call option (having cost you $2) on some
stock with an exercise price of
$20, it would be best for you to exercise your option when the market
price is at
(A) $18
(B) $20
