Cima P1 Exam Question No 50

Question No 50:

AB is preparing its cash budget for the next quarter. Which of the following items should NOT be included in the cash budget?
 
A. Payment of tax due on last year’s profits
B. Gain on the disposal of a piece of machinery
C. Repayment of the capital amount of a loan
D. Receipt of interest from short term investments

Answer: B

Cima P1 Exam Question No 49

Question No 49:

The details of four short term investments are as follows:

Investment A pays interest of 1.7% every 3 months
Investment B pays interest of 3.4% every 6 months
Investment C pays interest of 5.4% every 9 months
Investment D pays interest of 7.0% every 12 months
The investment that gives the highest effective annual rate of interest, assuming that the interest is reinvested, is:

A. Investment A
B. Investment B
C. Investment C
D. Investment D

Answer:

Investment A = (1.017)4 = 6.975%
Investment B = (1.034)2 = 6.916%
Investment C = (1.054)12/9 = 7.264%
Investment D = 7%

Answer: C

Cima P1 Exam Question No 48

Question No 48:

The committee of a new golf club is setting the annual membership fee. The number of members depends on the membership fee charged and economic conditions. The forecast annual cash inflows from membership fees are shown below.
 

If the minimax regret criterion is applied the fee set by the committee would be:

A. $600
B. $800
C. $900
D. $1,000

Answer: B

Cima P1 Exam Question No 47

Question No 47:

The committee of a new golf club is setting the annual membership fee. The number of members depends on the membership fee charged and economic conditions. The forecast annual cash inflows from membership fees are shown below.

If the maximin criterion is applied the fee set by the committee would be:

A. $600
B. $800
C. $900
D. $1,000

Answer: B