CIMA CIMA Certifications CIMAPRO17-BA1-X1-ENG Questions & Answers

• Question 1:

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  Company A uses the trend equation, y = a + bt, to forecast sales, where y are sales and t are time periods measured in units.

  At time period zero, sales were $865,000. In period 5, sales have increased to $1,245,000.

  Calculate coefficient b (without any decimal points):

  A. 584

  Correct Answer: A

• Question 2:

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  Based on the past twenty months, an event decorating company develops a trend equation for forecasting sales revenue (y) where y = 4.38 + 1.32x.

  If month 21 has a seasonal factor of times 1.07, then what is the forecast for the month, using a multiplicative model? Give your answer to two decimal places.

  A. 6.77

  Correct Answer: A

• Question 3:

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  A clothes retailer wants to compute the Pearson's correlation coefficient between the number of shirts sold per day (x) and the number of jackets sold per day (y), across its eight stores (n=8).

  If Σx = 256, Σy = 137, Σx² = 14278, Σy² = 4991 and Σxy = 8277, what is the Pearson's correlation coefficient? Give your answer to two decimal places.

  A. 0.65

  Correct Answer: A

• Question 4:

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  A wireless phone manufacturer currently sells 2,000 units per quarter at a price of $400. The estimated price elasticity of demand is -2.5.

  The manufacturer is considering an increase in the price to $440.

  What will this raise (+) or reduce (-) total revenue by? Give your answer in whole numbers.

  

  A. reduce - 139000

  Correct Answer: A

• Question 5:

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  The following cash flows are for a capital project where the required rate of return is 8 percent.

  

  Calculate the NPV for the project. Give your answer to the nearest whole number.

  A. 106,000

  Correct Answer: A

• Question 6:

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  A magazine currently has a circulation of 500,000 copies per year at a price of $5 per copy. Following a market survey it has been suggested that the price of each copy should be reduced to $4.50. It is expected this will lead to an increase in

  circulation of 25,000 copies per year.

  What is the price elasticity of demand of the magazine?

  A. +0.5

  Correct Answer: A

• Question 7:

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  A company in Country M owns a subsidiary in Country valued at O$200 million. The rate of exchange between the Country M dollar (M$) and the Country dollar (O$) is O$1 - M$6.

  If the Country M $ depreciated by 10% what would be the increase or decrease in the M$ valuation of the subsidiary?

  Give your answer in whole millions and indicate whether it is an increase or decrease.

  

  A. 1.3 million increase (+)

  Correct Answer: A

• Question 8:

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  Company GHI wishes to develop a linear model for forecasting tractor sales based on the number of sales people it employs. In the model, tractor sales will be the dependent variable and the number of sales people the independent variable.

  The company has collected sales data from each of its branches over the past year which has been reported below:

  

  Based on this data calculate the slope of the line (b) to two decimal places. b =

  A. 17.90

  Correct Answer: A

• Question 9:

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  A business analyst has computed a trend regression for the sales of company X. The following table reports the ratios between the actual quarterly sales of company X and the calculated trend, for a period of four years.

  

  What is the seasonal component in the fourth quarter? Give your answer to three decimal places.

  A. 0.563

  Correct Answer: A

• Question 10:

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  An estimation regression is developed to test the linear relationship between the size of student population at a university and monthly sales of a nearby bookshop. The correlation coefficient is equal to 0.9.

  Calculate the coefficient of determination to two decimal places:

  A. 0.31

  Correct Answer: A