Free CIMA CIMAPRO19-F02-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRO19-F02-1-ENG exam questions and correct answers

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Total 270 Questions | Updated On: Sep 10, 2025

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Question 1

An entity undertakes an issue of new debt which has the effect of reducing the entity's weighted average cost of capital (WACC).

Which of the following would best explain why the WACC will have fallen?

A : entity was 100% equity financed prior to the issue of the debt.

B : risk to the shareholders has reduced leading to a fall in the cost of equity.

C : new debt is being used to replace existing debt that had a lower cost.

D : new debt is being used to replace existing debt that had the same cost.

Answer: A

Question 2

When establishing a group structure, which of the following factors need to be considered: Select ALL that apply.

A : ether control has been established

B : percentage ownership

C : date of acquisition

D : n-controlling interests

E : odwill

F : tra-group investments

G : ether control is direct or indirect

Answer: A,B,C

Question 3

Entity A entered into a 3 year operating lease on 1 April 20X3. The rentals are 5,000 a year payable in advance with an additional payment of $1,800 payable on 1 April 20X3

The rental expense to be included in the statement of profit or loss for the year ended 31 December 20X3 will be:

A : $4,200

B : $5,000

C : $6,800

D : $5,600

Answer: A

Question 4

W and Y are very similar entities with the same level of profit before interest and tax. However, W has gearing of 95% and Y has gearing of 30%.

Which of the following statements is true?

A : vesting in W carries a higher level of risk than investing in Y.

B : greater proportion of profit will be available out of which to declare a dividend in W.

C : vestors in Y will expect a higher return than investors in W.

D : has a greater commitment to meet interest payments than W.

Answer: A

Question 5

Information from the financial statements of an entity for the year to 31 December 20X5:

The gearing ratio calculated as debt/equity and interest cover are:

A : aring of 15% andinterest cover of 6.

B : aring of 16% and interest cover of 6.

C : aring of 15% and interest cover of 4.

D : aring of 16% and interest cover of 4.

Answer: A

Page: 1 / 54

Total 270 Questions | Updated On: Sep 10, 2025

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