CIMA P2 Actual Free Exam Questions & Community Discussion

An organization is competing in the high technology market. It sets a high sales price for its products initially to target the early adopters, and then the price is gradually reduced.
This pricing strategy is known as:

An electronics company sells a range of tablet computers. Tablet computers come complete with an operating system that is regarded as the market leader. The company aims to launch a new version of its hardware every eighteen months and a major update to its software every three years. The latest version of the tablet computer is always sold at a higher price, but the older version that has been replaced is then sold for a time at a discounted price.
Which pricing model does this company appear to be using?

The money cost of capital is 12%. The expected rate of inflation is 4%. What is the real cost of capital?
Give your answer to 2 decimal places.

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

A company is considering investing $150,000 in a project which will generate the following contributions during the first three years.
Tax depreciation allowance is 25% each year of the reducing balance.

The taxation rate is 30% of taxable profits and tax is payable in the year after that in which it arises.
To the nearest $10, what is the forecast total project cash flow in year 3?

A company is considering the replacement of its outdated information system.
Which of the following are appropriate approaches for the company to take to assess the potential qualitative benefits of a replacement information system?
(1) Ignore the qualitative benefits that may arise because there is too much subjectivity involved in their assessment.
(2) Attempt to attribute monetary values to each of the qualitative benefits identified.
(3) Acknowledge the existence of qualitative benefits and attempt to assess them in a reasonable manner that is acceptable to all parties.
(4) Attempt to express qualitative benefits in general terms linked to a hierarchy of organizational objectives.

SQ has the opportunity to invest in project X. The net present value for project X is $12,600. Cash inflows occur in years 1, 2 and 3. The company's cost of capital is 14%.
Calculate the annualized equivalent annuity of project X.
Give your answer to the nearest whole $.

SDF makes cars. Demand for one of SDF's most popular models has declined because of a long-running television program. SDF's car is driven by a villainous character in the program and that has created such a negative association that sales have declined so significantly that SDF is planning to discontinue production.
Which of the following statements is correct? Select ALL that apply.

Place each method of analysing risk and uncertainty against the statement that describes it correctly.

Place each performance measure against the correct perspective of the Balanced Scorecard for a company that operates a chain of hotels.

A company is investing in a huge diversification project. The plan is to develop and sell a whole new product line that they have never sold before. They've already started a massive marketing campaign for this new product line and they are getting good feedback in their market research.
They've had to use debt funding in order to finance the project, but they hope that the returns will be worth the investment and restructuring. If they are successful they will be a step ahead of all their competitors and offer something none of them can.
What is the risk appetite of this company?

The following cash flows are forecast for a potential investment project.

The cost of capital for the project is 12% per year and the company uses a straight line depreciation policy.
What is the modified internal rate of return (MIRR) of the project?
Give your answer to the nearest whole percentage.