Free CIMA CIMAPRO19-P02-1 Exam Dumps Questions & Answers

A very large organization is financed by both debt and equity. It evaluates all projects on the basis of their net present value (NPV) using an organization wide weighted average cost of capital as the discount rate.
For a small project, which TWO of the following would affect the project's cash flows AND the discount rate?

• A.Inflation rates
• B.The project's terminal value
• C.Depreciation rates
• D.Taxation rates
• E.Changes in working capital

How does beyond budgeting NOT help to resolve the weaknesses of traditional budgeting? Select ALL that apply.

• A.Managers are encouraged to designate responsibility to others to lessen their workload so they may concentrate on important tasks.
• B.Managers are given more freedom and control over their business units under Beyond budgeting.
• C.Managers have a much larger scope of business goals that when achieved, will increase shareholder value.
• D.Managers focus on keeping costs low in the short term to ensure maximised profits.
• E.Managers are given incentives to meet or undercut budgets.
• F.Managers are set goals and targets to achieve rather than abiding by strict budgets and variances.

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.

• A.Equivalent annual cost = £2,000
  Present value of cost in perpetuity = £20,000
• B.Equivalent annual cost = £20,000
  Present value of cost in perpetuity = £2,000
• C.Equivalent annual cost = 9,283
  Present value of cost in perpetuity = £92,825
• D.Equivalent annual cost = £92,825
  Present value of cost in perpetuity = £9,283

An airline company has operated passenger flights with low ticket prices to various airports from a busy airport for several years. It now faces increased competition on a number of its routes and has decided to use the balanced scorecard to monitor its performance.
Which of the following statements are correct?
Select ALL that apply.

• A.The number of on time take-offs could be a suitable measure for the internal business process perspective.
• B.Customer satisfaction measures will not be needed because the company pursues a low price strategy for competitive advantage.
• C.The number of new flights to different destinations could be a suitable measure for the learning and growth perspective.
• D.Non-financial objectives will be met as a result of financial objectives being achieved.
• E.The proportion of seats that are occupied on flights could be a suitable measure for the internal business process perspective.
• F.A survey of passengers could be a suitable measure for the customer perspective.

An organization wishes to make its investment decisions on the basis of more than simply a financial appraisal. Which of the following will assist it to take into account both qualitative and quantitative factors?

• A.Modified Internal Rate of Return
• B.Profitability Index
• C.Discounted Payback
• D.Cost Benefit Analysis