CIMA Advanced Management Accounting - CIMAPRO19-P02-1 Exam Practice Test

Which of the following is the ideal basis to use for a transfer price when there is a perfect external market?

Which of the following would change if the cost of capital of a proposed project was increased?

The following data are available for four projects with unequal lives.
A 10% discount rate is appropriate for all four projects.

Which project has the highest equivalent annual benefit?

A project requires an initial investment of $160,000 in an asset for which the annual depreciation charge will be $40,000. The forecast profits from the investment are as follows.

What is the payback period for the project in years? Give your answer to two decimal places.

The following forecast data relate to the first three years of a five year project.
The project will require an initial investment of $30,000 in non-current assets.
All revenue will be received in the year it is earned and all operating costs will be paid in the year they are incurred. Tax will be paid in the following year.
Tax depreciation will be 25% per annum of the reducing balance.
The taxation rate will be 30% of taxable profits.

What is the forecast after tax cash flow for year 3 (to the nearest $10)?

A goal congruent transfer price will always:

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

In accordance with a just-in-time (JIT) philosophy, which of the following is regarded as a value added activity?

A company is considering four mutually exclusive projects. There are three possible future demand conditions but the company has no idea of the probability of each of these demand conditions occurring. The forecast net present values (NPVs) of each of the four projects, under each of the three possible future demand conditions, are as follows.

Which investment would be selected using the maximin criterion?

Performance measures that monitor the extent to which a not-for-profit organization's objectives have been achieved are measures of:

A company produces a single product which is sold to one customer.
Components for the product are stored in a warehouse and when required for production they are inspected. Those passing the quality check are moved to the initial production line. Part-completed items are then inspected and those passing this second quality check are moved to the warehouse until required in the finishing process. After the finishing process the products are inspected, packaged and returned to the warehouse until required by the customer.
The company is considering implementing a full just-in-time (JIT) system for both purchasing and production and has asked your advice about the activities that will be necessary if this system is implemented.
Which THREE of the following activities will definitely be required in the proposed JIT system?

A large company that sells a single product has many customers. The contribution per unit of the product is $40. Data for the company as a whole are given below.

Using customer profitability analysis, what is the total annual profit for this customer?