10 free Series 86/87 practice questions in the real exam format, covering the official content areas, with an explanation for every answer.
Series 86/87 Practice Test 5Tutor mode
Question 1 of 10
Valuation and Forecasting
Exhibit 2: Cedarline Industrial — segment data and FY2E assumptions (revenue in $ millions)
Segment
FY1 revenue
FY2E revenue growth
FY1 operating margin
FY2E operating margin
Flow control
600
4%
18%
18%
Sensors
300
15%
12%
15%
Services
100
8%
25%
25%
Total
1,000
—
—
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Unallocated corporate costs: $30 million in FY1 and $32 million in FY2E. Tax rate 25%. All data are invented.
An analyst is preparing Cedarline Industrial's FY2E segment forecast from Exhibit 2 for an earnings preview. Which conclusion is BEST supported by the FY2E segment assumptions?