CIMA CIMAPRA17-BA1-1 Exam Practice Test Instant Access

Question 1

Larger companies may benefit from economies of scale due to which THREE of the following?

ALarger companies may gain greater market share through advertising

BLarger companies may spread their fixed research and development costs over a larger amount of output

CLarger companies may more easily access public subsidies

DLarger companies may obtain lower interest rates on their loans.

ELarger companies may purchase inputs in bulk at lower unit prices

FLarger companies may benefit from greater customer loyalty

Answer : C, D, E

Question 2

Which THREE of the following are objectives of corporate governance?

ATo ensure that managers have attractive compensation packages

BTo implement clear career progression routes for employees

CTo ensure that customers' needs are addressed

DTo ensure that a company is run in a legal and ethical manner

ETo implement incentives for managers to pursue long term financial sustainability

FTo increase transparency in company reporting

Answer : D, E, F

Question 3

industrial action is more likely to occur within a large organisation than a small organisation, due to senior management becoming re managers becoming complacent, as well as shop floor hostility. The effect of this will be an increasing average cost as production

The statement above is most closely describing an example of which of the following?

AExternal diseconomy of scale.

BInternal diseconomy of scale

CInternal economy of scale

DExternal economy of scale

Answer : B

Question 4

A government issues a security which promises to pay $100 per year indefinitely. What is it worth if the required rate of return is..

A$2, 400

B$1, 400

C$2, 500

D$4, 000

Answer : C

Question 5

The following table provides the frequency distribution and cumulative frequencies of the cost of monthly rent for 120 apartments. What is the percentage of apartments whose monthly rent is less than $510?

A21%

B50%

C25%

D41%

Answer : D

Question 6

A bank charges a 4% quarterly interest rate on a personal loan of $10,000

What is the effective annual amount of interest that the borrower pays on this loan? Give your answer to the nearest whole dollar.

A$404

B$304

C$804

D$604

Answer : A

Question 7

Based on historical time series data, a chemicals company uses sales ($million) as the y variable and time (year) as the x variable and equation.

y = - 3935 47 + 2 02x

Using the equation, what is the company's predicted sales for the year 2020? Give your answer to the nearest million.

A$15 million

B$25 million

C$35 million

D$45 million

Answer : A

CIMAPRA17-BA1-1 BA1 - Fundamentals of Business Economics Exam Practice Test