P2 Advanced Management Accounting Certification Exam Questions with AI Explanations

QUESTION: 36

A small company currently uses an information system that was implemented several years ago and is based entirely on internal data. The company is considering replacing it with a more up to date system. It has been suggested that the new system should include the use of big data.

Which TWO of the following statements are correct?

Big data can provide a small company with useful information in the quest for competitive advantage.
Big data is concerned solely with a dramatic increase in the amount of internal data stored.
Big data can be used by a small company to identify new opportunities.
It is not possible to value the potential benefits to a small company of an improved information system.
Big data is only applicable to large companies which have substantial funds to invest in information systems.

Answer(s): A,C

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QUESTION: 37

DRAG DROP (Drag and Drop is not supported)

An investment appraisal has identified that a project has a positive net present value when discounted at the company's cost of capital. If the cost of capital is now increased, indicate whether each of the following appraisal measures will increase, decrease or stay the same.

See Explanation section for answer.

Answer(s): A

Explanation:

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QUESTION: 38

A goal congruent transfer price will always:

motivate divisional managers by maximising divisional autonomy.
align the decision making of divisional managers with the objectives of the organization as a whole.
align the decision making of divisional managers with the maximization of divisional profit.
ensure that profits are shared equally between the supplying and receiving divisions.

Answer(s): B

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QUESTION: 39

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?

Project A
Project B
Project C
Project D

Answer(s): B

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QUESTION: 40

The following information is available for four investment projects:

A discount rate of 12% is appropriate for all four projects. The organization is subject to capital rationing and wishes to prioritise the projects using the profitability index (PI).

Which project has the highest PI?

Project A
Project B
Project C
Project D

Answer(s): B

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CIMA P2 Advanced Management Accounting P2 Advanced Management Accounting Dumps in PDF

Free CIMA P2 Advanced Management Accounting Real Questions (page: 41)

QUESTION: 36

QUESTION: 37

Explanation:

QUESTION: 38

QUESTION: 39

QUESTION: 40