CIMA CIMAPRO19-P02-1 Free Sample Exam Questions 2026

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Total Questions: 202

Questions & Answers PDF

• Question 1

  

  A long established organization has recognised the need to make urgent changes to the way it operates in order to remain competitive. The organization wishes to dramatically improve its performance through a fundamental rethinking and radical redesign of its existing activities.Which of the following techniques should be used to achieve this?

  • Functional analysis
  • Kaizen costing
  • Business process re-engineering
  • Process innovation

  Reveal Answer Answer: C Next Question

• Question 2

  

  A positive net present value (NPV) has been calculated for a project to launch a new product. An additional calculation is required to identify the sensitivity of the NPV to changes in the forecast total sales volume.The present value of which of the following would be used in the calculation?

  • Contribution
  • Operating profit
  • Fixed overheads
  • Net profit

  Reveal Answer Answer: A Next Question

• Question 3

  

  An organization is comprised of two divisions. One of the divisions manufactures a product that it sells both to an imperfect external market and to the other division.The organization wishes to establish the most suitable basis for the transfer price for this product and is considering either a negotiated transfer price or a market-based transfer price.Which of the following statements is correct?

  • A negotiated transfer price could help to overcome the problem of establishing a single price for this external market.
  • A single market price for all of the division's output can be determined easily whereas a negotiated transfer price may result in protracted negotiations.
  • A negotiated transfer price will always result in goal congruence whereas this is not always true when using a single market-based transfer price.
  • A market-based transfer price will ensure both divisional autonomy and goal congruence because part of the division's output is sold to the external market.

  Reveal Answer Answer: A Next Question

• Question 4

  

  A company has a 31 December year end and pays corporation tax at a rate of 30%. Corporation tax is payable 12 months after the end of the year to which the cash flows relate. The company can claim tax allowable depreciation at a rate of 25% reducing balance. It pays $1 million for a machine on 31 December 20X4. The company's cost of capital is 10%.What is the present value of the benefit of the first portion of tax allowable depreciation?

  • $250,000
  • $227,500
  • $75,000
  • $68,175

  Reveal Answer Answer: D Next Question

• Question 5

  

  The net present value of the cost of operating a machine for the next 4 years is 6,340. The discount rate used is 10%.What is the equivalent annual cost and the present value of the cost in perpetuity of operating this machine?Use discount factors to 3 decimal places.

  • Equivalent annual cost = 92,825 Present value of cost in perpetuity = 9,283
  • Equivalent annual cost = 9,283 Present value of cost in perpetuity = 92,825
  • Equivalent annual cost = 2,000 Present value of cost in perpetuity = 20,000
  • Equivalent annual cost = 20,000 Present value of cost in perpetuity = 2,000

  Reveal Answer Answer: C Next Question

• Question 6

  

  SQ has the opportunity to invest in project X. The net present value for project X is $12,600. Cash inflows occur in years 1, 2 and 3. The company's cost of capital is 14%.Calculate the annualized equivalent annuity of project X.Give your answer to the nearest whole $..

  Reveal Answer Answer: $5429 Next Question

• Question 7

  

  The management of a leisure company, who are risk averse, have just approved an investment in a new amusement park. The country in which the amusement park will be located has a warm and mostly dry climate throughout the year.A number of specific risks related to this investment have been identified as follows.(1) Losses of very small amounts of revenue due to poor weather.(2) A significant financial liability may arise due to the injury of a member of the public.(3) Loss of several days of revenue due to rides being unavailable because of poor maintenance routines.(4) Income fraud as a consequence of the high levels of cash handled by employees.Using the TARA framework, which is the most appropriate way of managing each of these risks?

  • Transfer risk 1; accept risk 2; avoid risk 3; reduce risk 4
  • Accept risk 1; avoid risk 2; transfer risk 3; reduce risk 4
  • Accept risk 1; transfer risk 2; avoid risk 3; reduce risk 4
  • Reduce risk 1; transfer risk 2; avoid risk 3; accept risk 4

  Reveal Answer Answer: C Next Question

• Question 8

  

  A company is investing $150,000 in a project which will yield an annual cash inflow of $40,000 for eight years. The company's cost of capital is 10%.To the nearest $100, what is the project's equivalent annual net present value?

  • $11,900
  • $7,900
  • $63,400
  • $21,300

  Reveal Answer Answer: A Next Question

• Question 9

  

  A public sector service organization is considering whether to use a balanced scorecard or a value for money approach based on the three Es to assess its performance.Which of the following are correct comparisons of the balanced scorecard and value for money based on the three Es as performance measurement frameworks?Select ALL that apply.

  • Efficiency is measured as one of the three Es but the balanced scorecard does not measure efficiency.
  • If the organization wishes to consider both financial and non-financial performance then the balanced scorecard should be used rather than the three Es.
  • The public's satisfaction with the organization's services can be measured by both the three Es and the balanced scorecard.
  • The balanced scorecard is concerned with meeting the organization's objectives whereas the three Es approach is concerned only with reducing costs.
  • The three Es approach was designed for public sector service organizations, but the balanced scorecard approach can also be used in the public sector.

  Reveal Answer Answer: C, E Next Question

• Question 10

  

  For a pharmaceutical manufacturer, in which perspective of the Balanced Scorecard should the performance measure 'number of patents granted during the year' be included?

  • Customer
  • Internal business processes
  • Innovation and learning
  • Financial

  Reveal Answer Answer: C Next Question

Page: 1 / 41
Total Questions: 202

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