ETS MFT MBA Updated Questions
and Answers (2026/2027) | Practice
Review | A+ Verified
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. -✓✓(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. -✓✓(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. -✓✓(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. -✓✓(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? -✓✓(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
(C) $22
(D) $24 -✓✓(D) $24
Increased globalization and technological change, particularly in
telecommunications, enable more organizations to adopt which of the following
organizational structures?
(A) Functional
(B) Matrix
(C) Network
(D) Mechanistic -✓✓(C) Network
A new local Super Store publicly announced that when more than three people are
standing in line
at cash registers, additional checkout-lines will be opened. After the
announcement, customers quickly noticed that the additional lines were not opened
until six or seven people were standing in line. This indicates a gap between
(A) customer expectation and management perception of customer expectation
and Answers (2026/2027) | Practice
Review | A+ Verified
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. -✓✓(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. -✓✓(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. -✓✓(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. -✓✓(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? -✓✓(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
(C) $22
(D) $24 -✓✓(D) $24
Increased globalization and technological change, particularly in
telecommunications, enable more organizations to adopt which of the following
organizational structures?
(A) Functional
(B) Matrix
(C) Network
(D) Mechanistic -✓✓(C) Network
A new local Super Store publicly announced that when more than three people are
standing in line
at cash registers, additional checkout-lines will be opened. After the
announcement, customers quickly noticed that the additional lines were not opened
until six or seven people were standing in line. This indicates a gap between
(A) customer expectation and management perception of customer expectation
