Free CIMAPRA19-P03-1 Actual Exam Questions
The questions for this exam were last updated on January 7, 2026
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Question No. 1
JHU has recently completed an eight year project. The project was evaluated at a discount rate of
10% and was accepted because the net present value was $18 million.
In year 3 of the project there was a significant unexpected repair arising because of the
implementation stage of the project was rushed and some checks on equipment were skipped to
save time. The cost of this was $8 million.
In year 8 of the project the costs of dismantling the project were $11 million more than anticipated
because of unexpected changes to the law concerning disposal of industrial scrap.
How should these findings be reflected in the post completion audit?
10% and was accepted because the net present value was $18 million.
In year 3 of the project there was a significant unexpected repair arising because of the
implementation stage of the project was rushed and some checks on equipment were skipped to
save time. The cost of this was $8 million.
In year 8 of the project the costs of dismantling the project were $11 million more than anticipated
because of unexpected changes to the law concerning disposal of industrial scrap.
How should these findings be reflected in the post completion audit?
Select one option, then reveal solution.
Question No. 2
A UK manufacturing company has simultaneously:
• purchased a put option to sell USD 1million at an exercise price of GBP1.00 = USD1.65
• sold a call option that grants the option holder the right to buy USD 1million at a price of GBP1.00
= USD1.61 (this option has the same maturity date as the put).
Which of the following is a valid explanation for entering into these option positions?
• purchased a put option to sell USD 1million at an exercise price of GBP1.00 = USD1.65
• sold a call option that grants the option holder the right to buy USD 1million at a price of GBP1.00
= USD1.61 (this option has the same maturity date as the put).
Which of the following is a valid explanation for entering into these option positions?
Select one option, then reveal solution.
Question No. 3
There are many method for appraising capital projects.
Select ALL correct statements.
Select ALL correct statements.
Select all that apply, then reveal solution.
Question No. 4
Systems
Development Lifecycle (SDLC) is used to manage risk within the development of new
computer systems.
Which THREE of the following are appropriate controls to manage risk within the SDLC Process?
Development Lifecycle (SDLC) is used to manage risk within the development of new
computer systems.
Which THREE of the following are appropriate controls to manage risk within the SDLC Process?
Select all that apply, then reveal solution.
Question No. 5
James owns a small company which sometimes suffers from credit risk.
Which of the following measures should he put in place to help reduce this risk?
Which of the following measures should he put in place to help reduce this risk?
Select one option, then reveal solution.
Question No. 6
Company W produces mobile phone components and has recently tendered for a substantial
contract. The results of the tendering process will not become available until three months from
now. If the company is successful it will require 2,000 units of a commodity which is currently traded
in an open commodity market for $740 per unit. However, there has been speculation that this
commodity could increase substantially in price over the next three months and so the company is
considering purchasing the commodity now and storing it for three months.
The funds to buy the commodity would be borrowed at an annual interest rate of 7% and the storage
cost of the product would be $5.40 per unit per month. The storage costs would be paid at the end of
the three month storage period.
Which of the following represents the gain or loss (to the nearest thousand dollars) that will accrue
to Company W assuming that the price of the commodity rises to $800 in three months' time?
contract. The results of the tendering process will not become available until three months from
now. If the company is successful it will require 2,000 units of a commodity which is currently traded
in an open commodity market for $740 per unit. However, there has been speculation that this
commodity could increase substantially in price over the next three months and so the company is
considering purchasing the commodity now and storing it for three months.
The funds to buy the commodity would be borrowed at an annual interest rate of 7% and the storage
cost of the product would be $5.40 per unit per month. The storage costs would be paid at the end of
the three month storage period.
Which of the following represents the gain or loss (to the nearest thousand dollars) that will accrue
to Company W assuming that the price of the commodity rises to $800 in three months' time?
Select one option, then reveal solution.
Question No. 7
MNB is a multinational IT company with headquarters in Asia and with operations in all continents.
MNB is attempting to expand its operations in Europe. This is seen as a major challenge as the
European market is very well developed and highly competitive.
MNB develops and manufactures its own products. Parts and assemblies are sourced across Asia,
America and Europe. These are sometimes purchased locally as a condition of a contract, but MNB
aims to include as much of its own equipment as possible. Transfer prices between MNB's
subsidiaries can be set in YEN, USD, EURO, GBP. Transfer prices are revised every month in line with
production times as most goods are made on short order with sales cycles running at 3-4 months.
What types of risk are being presented here?
MNB is attempting to expand its operations in Europe. This is seen as a major challenge as the
European market is very well developed and highly competitive.
MNB develops and manufactures its own products. Parts and assemblies are sourced across Asia,
America and Europe. These are sometimes purchased locally as a condition of a contract, but MNB
aims to include as much of its own equipment as possible. Transfer prices between MNB's
subsidiaries can be set in YEN, USD, EURO, GBP. Transfer prices are revised every month in line with
production times as most goods are made on short order with sales cycles running at 3-4 months.
What types of risk are being presented here?
Select all that apply, then reveal solution.
Question No. 8
A patient has been prescribed a new medicine by their physician. The medicine is accompanied by a
leaflet describing potential adverse effects associated with taking it. Most of these potentially
adverse effects are trivial, but the leaflet states that three patients in every 10,000 who take the
medicine suffer a severe reaction requiring urgent medical attention.
Which of the following statements is true?
leaflet describing potential adverse effects associated with taking it. Most of these potentially
adverse effects are trivial, but the leaflet states that three patients in every 10,000 who take the
medicine suffer a severe reaction requiring urgent medical attention.
Which of the following statements is true?
Select one option, then reveal solution.
Question No. 9
K is a large mining company. In its risk report it states that there is a risk of accidents and injury
because of the nature of the industry. It states that it has staff training in place and complies with
all Health and Safety regulations but in spite of this there will still be a residual risk that accidents
and injuries may occur.
Which of the following statements are correct?
because of the nature of the industry. It states that it has staff training in place and complies with
all Health and Safety regulations but in spite of this there will still be a residual risk that accidents
and injuries may occur.
Which of the following statements are correct?
Select all that apply, then reveal solution.
Question No. 10
W is a construction company which undertakes large projects for governments and other clients
worldwide. Following extensive tendering processes, contracts are issued for successful tenders, and
projects typically take three to five years to complete. Contracts are normally fixed-price and many
have considerable penalty clauses.
Which of the following would be appropriate policies and controls for W to implement?
worldwide. Following extensive tendering processes, contracts are issued for successful tenders, and
projects typically take three to five years to complete. Contracts are normally fixed-price and many
have considerable penalty clauses.
Which of the following would be appropriate policies and controls for W to implement?
Select all that apply, then reveal solution.
Question No. 11
In relation to the use of the adjusted present value (APV) technique, which of the following
statements are correct?
statements are correct?
Select all that apply, then reveal solution.
Question No. 12
M plc is an IT company that bids for large contracts to sell computer systems and also to
service existing systems. M plc's senior management has always set budgets which are hard to
achieve and have made no allowances for the recession.
The economy has improved and M plc's senior managers have made the budget even more
optimistic. The budgeted sales target has been increased by 40%.
In the past, sales staff have not tried to achieve the budget sales because it was generally believed
that the targets were impossible to reach.
M plc has recently appointed a new Sales Director who has decided that sales staff will
be dismissed if they fail to meet sales targets for three successive months. He is also looking
for higher sales margins than were achieved before.
What are the likely consequences of the new Sales Director's policy?
service existing systems. M plc's senior management has always set budgets which are hard to
achieve and have made no allowances for the recession.
The economy has improved and M plc's senior managers have made the budget even more
optimistic. The budgeted sales target has been increased by 40%.
In the past, sales staff have not tried to achieve the budget sales because it was generally believed
that the targets were impossible to reach.
M plc has recently appointed a new Sales Director who has decided that sales staff will
be dismissed if they fail to meet sales targets for three successive months. He is also looking
for higher sales margins than were achieved before.
What are the likely consequences of the new Sales Director's policy?
Select all that apply, then reveal solution.
Question No. 13Drag & Drop
DRAG DROP G plc has decided to move its production plant to overseas Country A. This would make the product cheaper to produce. The technology used to make the product is very advanced and some of the staff would have to move to Country A. The Production Director has identified that there are some political risks in moving to Country A. Match the methods of reducing the political risks associated with the move to Country A with the corresponding risks. 
Options
AThe Government of Country A could introduce high taxes for outside companies which would make it difficult for G pic to continue production i
BThe Government of country A could refuse to grant visas to G pic's staff who have to move to country A
CLocal staff could find out how to make the produ and use that knowledge to start a production plant of their own
DThe Government of country A could refuse to renew visas for staff brought from G pic's own country
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Answer Area
Import partly completed products from G pic's own country
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Employ at least 50% local people in the production plant
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Take out a loan with a bank in country A.
Drop item here
Question No. 14Drag & Drop
DRAG DROP B uses a balanced scorecard to monitor the performance of its divisions. Classify each of the following decisions taken by a division's management team as either commercially sound or dysfunctional. 
Options
AThe profit target has been met, so new customers are being granted massive discounts to meet the target for new customers.
BA prize has been offered for the production team that exceeds quality targets by the greatest margin.
CA senior manager was asked to assist in the development of a tender document for a large sales contract.
DCustomers are being offered incentives to state that they are totally satisfied when surveyed by VBN's sales team.
EA tender document for a large sales contract was prepared but not submitted to avoid risking increasing the proportion of rejected bids.
FLong-standing customers were encouraged to switch to newly developed products because they had a higher contribution.
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Answer Area
Commercially sound
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Dysfunctional
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Question No. 15Drag & Drop
DRAG DROP The internal audit department should always give a report at the end of its audit. This report is intended to be useful and help the company going forward. The report should always include any recommendations for improvements. Which of the following statements are true and which are false? 
Options
AInternal audit should have a post implementation review to see how its recommendaions have been implemented by the company.
BIf residual risk is not reduced by its recommendations then they are not worth implementing.
CEven if the recommendations are not cost effective they should be implemented as they may increase internal control.
DThe internal auditors should themselves implement the internal controls suggested.
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Answer Area
True
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False
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