Question 1

You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have
underestimated the discount rate.
Correcting the underestimation will have the following effect, relative to your original deductions:

Options :

A : NPV will reduce, IRR will not change

B : NPV and IRR will not change

C : NPV will increase, IRR will reduce

D : NPV and IRR will both increase

E : Not enough information given for an answer

Answer: A

Question 2

Which TWO of the following conditions are necessary for a learning curve to apply?

Options :

A : The process must be simple.

B : The process must be complex.

C : There must be regular breaks in production.

D : Production must be machine intensive.

E : Production must be labor intensive.

Answer: A,B

Question 3

One of an investment centre's products is sold on an external market. Output is limited because the specialist machine that manufactures the product is operating at full capacity.

Current data for the product are as follows.

Options :

A : $21,400

B : $17,800

C : $23,900

D : $26,160

Answer: A

Question 4

Which TWO of the following actions taken during the budgetary planning process will result in the creation of budgetary slack?

Options :

A : Overestimating costs

B : Underestimating costs

C : Underestimating revenues

D : Overestimating revenues

E : Overestimating profit

Answer: A,C

Question 5

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

Options :

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

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

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

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

Answer: A

Higher Test Marks with Free Online CIMAPRO19-P02-1-ENG Exam Practice

Buying Options: