Free CIMA CIMAPRO19-P03-1 Exam Actual Questions

The questions for CIMAPRO19-P03-1 were last updated On Mar 24, 2025

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Question No. 1

TRF is conducting a post completion audit on an investment in a pollution control machine that has reached the end of its five year useful life.

TRF could have been heavily fined if the machine had failed to keep pace with the output of emissions, measured in units. TRF's cost of capital is 10%. When the machine was purchased, there was a choice of three machines on the market:

TRF purchased the Big machine, but annual requirements only exceeded 600,000once, in year 3, when 720,000 units of emissions were emitted.

Calculate the amount that the post completion audit showsTRF overpaid for the ownership costs associated with this machine.

Give your answer to the nearest whole $ (in $'000s).

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Correct Answer: A

Question No. 2

GHJ makes large export sales to customers in Country A, whose currency fluctuates significantly against GHJ's home currency. GHJ also makes large purchases from suppliers in Country

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Correct Answer: A, A, B, C

Question No. 3

B is a company with a strong risk appetite.Which of the following are benefits of using the certainty equivalent method of capital investment appraisal in B's case?

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Correct Answer: B, C

Question No. 4

Division A of X plc produced the following results in the last financial year.

Net profit $200,000 Gross capital employed$1,000,000

For evaluation purposes all divisional assets are valued at original cost.

The division is considering a project that has a positive NPV, will increase annual net profit by $15,000, but will require average inventory levels to increase by $50,000 and non-current assets to increase by $50,000.

Xplc imposes a 16% capital charge on its divisions. Given these circumstances, will the evaluation criteria of return on investment (ROI) and residual income (RI) motivate divisionAmanagers to accept the project?

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Correct Answer: D

Question No. 5

You have been assigned the role of lead internal auditor. Your task is to carryout the annual assessment of the production line maintenance department.

When planning for this audit, which of the following must be completed?

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Correct Answer: C, D, F