Free CIMAPRO19-P02-1-ENG Practice Exam Questions Online

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Total 205 Questions | Updated On: Nov 18, 2024

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Question 1

You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have
underestimated the discount rate.
Correcting the underestimation will have the following effect, relative to your original deductions:

A : NPV will reduce, IRR will not change

B : NPV and IRR will not change

C : NPV will increase, IRR will reduce

D : NPV and IRR will both increase

E : Not enough information given for an answer

Answer: A

Question 2

The following summarised financial statements have been prepared by JNM's North subsidiary for the year just ended:

Calculate the North subsidiary's Residual Income, assuming that JNM's cost of capital is 10%.
Give your answer to the nearest $ million.

A : A

Answer: A

Question 3

When considering a capital investment, relevant costs for decision making have which THREE of the following features?

A : They are future costs.

B : They are committed costs.

C : They are incremental costs.

D : They are unavoidable costs.

E : They are cash flows.

Answer: A,C

Question 4

Which of the following statements is TRUE about the activity based costing system when compared to absorption costing method?

A : ABC is easier to administer than an absorption costing system

B : ABC will be less detailed than an absorption costing system

C : ABC will provide more accurate overhead allocation than absorption costing

D : ABC will cost less to administer than an absorption costing system

Answer: C

Question 5

Which of the following statements about the use of traditional budgeting compared with a beyond budgeting approach is correct?

A : If the organization has devolved decision making, beyond budgeting is not appropriate because it does not allow the same level of empowerment as traditional budgeting.

B : If the organization's products are subject to rapid technological change, beyond budgeting would allow managers to respond more quickly than under traditional budgeting.

C : If there is a dynamic external environment with fast moving opportunities, beyond budgeting will inhibit the organization's ability to take advantage of these opportunities whereas traditional budgeting will not.

D : If the organization's culture is such that a top down budgeting system is desired then this is better achieved by adopting beyond budgeting rather than traditional budgeting.

Answer: B

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Total 205 Questions | Updated On: Nov 18, 2024

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