Question No 53:
A company is considering offering its customers an early settlement discount. The company currently receives payments from customers on average 65 days after the invoice date. The company is considering offering a 2% early settlement discount for payment within 30 days of the invoice date. The effective annual interest rate of the early settlement discount using compound interest methodology and assuming a 365 day year is:
A. 22.94%
B. 20.86%
C. 23.45%
D. 27.85%
Answer: C
Thursday, 19 May 2016
Thursday, 12 May 2016
Cima P1 Exam Question No 52
Question No 52:
A certificate of deposit is best described as:
A. A debt instrument which offers a fixed rate of interest over a fixed period of time and with a fixed redemption value.
B. A negotiable instrument which provides evidence of a fixed term deposit with a bank.
C. A document which sets out a commitment to deposit a sum of money at a specified point in time.
D. A certificate which shows ownership of part of the share capital of a company.
Answer: A
A certificate of deposit is best described as:
A. A debt instrument which offers a fixed rate of interest over a fixed period of time and with a fixed redemption value.
B. A negotiable instrument which provides evidence of a fixed term deposit with a bank.
C. A document which sets out a commitment to deposit a sum of money at a specified point in time.
D. A certificate which shows ownership of part of the share capital of a company.
Answer: A
Thursday, 5 May 2016
Cima P1 Exam Question No 51
Question No 51:
A company has a real cost of capital of 6% per annum and inflation is 3% per annum.
The company’s money cost of capital per annum is:
A. 9.00%
B. 2.91%
C. 3.00%
D. 9.18%
Answer: D
A company has a real cost of capital of 6% per annum and inflation is 3% per annum.
The company’s money cost of capital per annum is:
A. 9.00%
B. 2.91%
C. 3.00%
D. 9.18%
Answer: D
Thursday, 28 April 2016
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
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
Thursday, 21 April 2016
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
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
Thursday, 14 April 2016
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
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
Thursday, 7 April 2016
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
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