Try and practice the latest CIMA : CIMAPRA19-P03-1 real questions & answers

YHJ is considering an investment in a project that will cost $20 million. Annual fixed costs will be $12 million per year, excluding depreciation. Annual sales are forecast at 5 million units, with a contribution per unit of $8. After five years the equipment will be worn out and YHJ will have to spend $50 million on disposal costs. The discount rate is 10%.
Calculate the sensitivity of the net present value of this project to a 20% increase in the disposal costs.

• A. 20%
• B. 31%
• C. 11%
• D. 13%

CW is a large company in the food production industry. It has grown over the years by the acquisition of several smaller rivals CW has ten branches located in its home country and has just opened a foreign branch for the first time It has recently made some changes to the structure and implementation of its control system.
Which TWO of the following changes would be most likely to improve the overall control system?

• A. Purchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment The invoices, supporting documentation and suppliers' statements are retained at the branches
• B. CW has just opened a bank account in the currency in which the newly opened branch is now operating
• C. A policy has been initiated to complete a physical inventory of all non-current assets at least annually This is then reconciled with the non-current asset register
• D. Establishing an internal audit department
• E. Excess funds are now invested, by the finance director, in short-term securities The finance director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments

The government health service in country H employs well over 100,000 staff in various locations throughout the country. Traditionally, local management has had high levels of autonomy in relation to personnel issues and there are several different human resources (HR) managers located across various regions.
The government has decided to introduce a completely new HR/payroll information system to have just one database containing all relevant information about every staff member on the payroll (start date, job title, salary and all other details) and to use this information to begin streamlining recruitment and HR policies.
The government has outsourced the system's development to a reputable company.
Which of the following are disadvantages associated with this IT project?

• A. The government is very heavily dependent on the contractor to whom this assignment is outsourced and if they do not to perform as required this could have serious consequences.
• B. Any initial problems in running the system could have serious repercussions as it could lead to, for example, staff not being paid, payroll tax not being properly collected, and similar difficulties.
• C. There is a risk that significant anomalies in the current system will be highlighted.
• D. The amount of data storage space required to run the system may not be available.
• E. The system could make it more difficult to employ specialist medical staff on terms and conditions which are different from the normal terms and conditions available.
• F. There is a risk that the system will not capture all of the existing terms and conditions of staff, thus leading to industrial relations problems later.

YGH has recently completed a post completion audit on a five year contract that has only recently come to a conclusion. The main finding was that the project delivered most of the expected benefits, but that it cost significantly more to implement than had been anticipated at the project appraisal stage. YGH would not have proceeded if the true cost had been known at that stage.
The project was the responsibility of the production department, which is presently managed by G.
When the project was proposed, the production department was managed by H. H is now YGH's Director of Operations.
How should the finding from this post completion audit be interpreted?

• A. The production department should not be granted funding for future projects unless there are compelling reasons to proceed.
• B. YGH should consider introducing more detailed checking of the assumptions underlying the costs of future projects.
• C. G should be held accountable for the overspend on the project.
• D. H should be held accountable for the overspend on the project.

Company C wishes to recruit an employee who will have responsibility for, among other things, the receipt and handling of cash. Which THREE of the following would be most likely to provide useful information about the candidate from the point of view of the Internal Auditor?

• A. Confirmation that the candidate does not have a criminal record.
• B. The candidate's membership of a professional body.
• C. References from previous employers of the candidate.
• D. The candidate's personal referees.
• E. The candidate's academic qualifications.