P2 Exam Questions and Answers | Exam-Dumps (Page: 6)

QUESTION: 26

A company is investing $150,000 in a project which will yield an annual cash inflow of $40,000 for eight years. The company's cost of capital is 10%.

To the nearest $100, what is the project's equivalent annual net present value?

$11,900
$7,900
$63,400
$21,300

Answer(s): A

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QUESTION: 27

An organization has carried out a risk assessment for a project.

Which of the following possible outcomes are examples of upside risk?

Select ALL that apply.

The project might be developed more quickly than expected.
The project's costs might be higher than expected.
The project's Economic Value Added might be higher than expected.
The project's environmental damage might be less than expected.
The project's payback period might be greater than expected.

Answer(s): A,C,D

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QUESTION: 28

An 80% learning curve will apply to the production of a new product. The first unit will require 120 labor hours. The labor rate is $11 per hour.

To the nearest $1, the expected total labor cost for the first 4 units is:

$3,379
$845
$5,280
$4,224

Answer(s): A

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QUESTION: 29

An organization wishes to make its investment decisions on the basis of more than simply a financial appraisal. Which of the following will assist it to take into account both qualitative and quantitative factors?

Cost Benefit Analysis
Profitability Index
Discounted Payback
Modified Internal Rate of Return

Answer(s): A

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QUESTION: 30

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.

Investigations have identified that more rigorous maintenance of the machine at an annual cost of $5,000 would reduce the number of breakdowns and increase its capacity to 1,300 units per year.

There would be no change in the selling price if more units were sold. Any additional labor hours would be paid a premium of 25%. A discount of 2% of the cost of all materials purchased is available if the company increases its purchases to 3,700 kg or more per year.
What would be the increase in the investment centre's annual controllable profit if more rigorous maintenance is undertaken?

$21,400
$17,800
$23,900
$26,160

Answer(s): A

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CIMA P2 Exam (page: 6) CIMA Advanced Management Accounting Updated on: 15-Dec-2025

QUESTION: 26

QUESTION: 27

QUESTION: 28

QUESTION: 29

QUESTION: 30

CIMA P2 Exam (page: 6)
CIMA Advanced Management Accounting
Updated on: 15-Dec-2025