Free Practice CIMA CIMAPRA19-P02-1-ENG Exam Questions 2025

Stay ahead with 100% Free P2 Advanced Management Accounting (Online) CIMAPRA19-P02-1-ENG Dumps Practice Questions

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Total 205 Questions | Updated On: Jun 06, 2025

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Question 1

A project has a positive net present value (NPV) when discounted at a company's weighted average cost of capital (WACC). The project has also been evaluated using a range of other investment appraisal techniques.
It has now been recognized that the project is of much higher risk than the average risk of the company's existing portfolio of projects. It has therefore been decided that the discount rate to be used when evaluating this project should be the WACC adjusted for risk.
As the result of changing the discount rate as described, which of following statements are correct?
Select ALL that apply.

A : The net present value would decrease.

B : The internal rate of return would decrease.

C : The accounting rate of return would decrease.

D : The internal rate of return would remain unchanged.

E : The profitability index would remain unchanged.

F : The net present value would increase.

Answer: A,D

Question 2

In order to remain competitive an organization wishes to achieve cost savings for one of its existing products.
Which of the following correctly describes methods which the organization can use to achieve these cost savings?
Select ALL that apply.

A : Functional analysis is carried out only on existing products and is concerned only with minimizing the cost of the originally defined functions of a product.

B : Value engineering is a fundamental rethinking and radical redesign of an organization's existing processes.

C : Target costing is continuously setting new stretch targets while the product is in production.

D : Value analysis is examining a product's costs in order to achieve its purpose at a reduced cost while maintaining its reliability and quality.

E : Kaizen costing is seeking to make cost savings by continuously making small incremental cost reductions while the product is in production.

Answer: A,D

Question 3

Which of the following statements is correct in respect of the key feature of dual pricing?

A : The selling price recorded by the selling division is higher than the cost recorded by the receiving division.

B : Internal customers are offered trade discounts depending on the number of units they purchase.

C : Internal transfers are priced at marginal cost and a lump sum payment is made subsequently to contribute to fixed costs.

D : Internal customers are charged a lower price than external customers to reflect savings in distribution costs.

Answer: A

Question 4

Which of the following statements is TRUE about the activity based costing system when compared to absorption costing method?

A : ABC is easier to administer than an absorption costing system

B : ABC will be less detailed than an absorption costing system

C : ABC will provide more accurate overhead allocation than absorption costing

D : ABC will cost less to administer than an absorption costing system

Answer: C

Question 5

When considering a capital investment, relevant costs for decision making have which THREE of the following features?

A : They are future costs.

B : They are committed costs.

C : They are incremental costs.

D : They are unavoidable costs.

E : They are cash flows.

Answer: A,C

Page: 1 / 41

Total 205 Questions | Updated On: Jun 06, 2025

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