Free CIMA CIMAPRA19-P02-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRA19-P02-1-ENG exam questions and correct answers

Page: 1 / 41

Total 205 Questions | Updated On: Oct 28, 2025

Add To Cart

Question 1

A project has a positive net present value (NPV) when discounted at a company's weighted average cost of capital (WACC). The project has also been evaluated using a range of other investment appraisal techniques.
It has now been recognized that the project is of much higher risk than the average risk of the company's existing portfolio of projects. It has therefore been decided that the discount rate to be used when evaluating this project should be the WACC adjusted for risk.
As the result of changing the discount rate as described, which of following statements are correct?
Select ALL that apply.

A : net present value would decrease.

B : internal rate of return would decrease.

C : accounting rate of return would decrease.

D : internal rate of return would remain unchanged.

E : The profitability index would remain unchanged.

F : The net present value would increase.

Answer: A,D

Question 2

A manufacturing company has recently introduced a Total Quality Management (TQM) system. The company has invested heavily in the education and training of its staff, in addition to implementing new product design engineering. There is a plan to sample units from each batch of products manufactured to test for errors, although this has not yet been implemented due to budget constraints.
The company is experiencing high levels of customer complaints, with many faulty units being returned by the customer for refund or replacement. Sales revenue has fallen recently, mainly due to negative press coverage linked to dissatisfied customers.
Select the statement MOST likely to apply.

A : high level of external failure costs is the result of a lack of expenditure on prevention costs.

B : high level of internal failure costs is the result of a lack of expenditure on appraisal costs.

C : high level of external failure costs is the result of a lack of expenditure on appraisal costs.

D : high level of internal failure costs is the result of a lack of expenditure on prevention costs.

Answer: C

Question 3

Division A is an investment centre with assets of $7.3 million. The following is an extract from the annual budget for division A:

The cost of capital is 14%.
Calculate the residual income for division A.

A : $808,000

B : $1,727,800

C : $358,000

D : $2,008,000

Answer: A

Question 4

In order to remain competitive an organization wishes to achieve cost savings for one of its existing products.
Which of the following correctly describes methods which the organization can use to achieve these cost savings?
Select ALL that apply.

A : nctional analysis is carried out only on existing products and is concerned only with minimizing the cost of the originally defined functions of a product.

B : lue engineering is a fundamental rethinking and radical redesign of an organization's existing processes.

C : Target costing is continuously setting new stretch targets while the product is in production.

D : lue analysis is examining a product's costs in order to achieve its purpose at a reduced cost while maintaining its reliability and quality.

E : izen costing is seeking to make cost savings by continuously making small incremental cost reductions while the product is in production.

Answer: A,D

Question 5

Firefighters risk serious and potentially fatal accidents whenever they attend an incident.
Which of the following statements is correct?

A : risk of serious accidents should be accepted in all but the most extreme incidents.

B : risk of serious accidents should always be accepted because that is what firefighters are paid to do.

C : risk of serious accidents should be avoided because the risk has a high probability and a high impact.

D : ery incident should be the subject of a detailed and thorough risk assessment before the firefighters are permitted to respond.

Answer: A

Page: 1 / 41

Total 205 Questions | Updated On: Oct 28, 2025

Add To Cart