Some candidates read on a tablet; others prefer drilling in a simulator. 2Pass4sure's CIMA F3 Financial Strategy package comes as a printable PDF, a Windows desktop test engine, and a browser-based online engine, so the 435 practice questions for the CIMAPRA19-F03-1 exam fit the way you actually study.

CIMA CIMAPRA19-F03-1 Exam Overview:

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CIMA F3 Financial Strategy Sample Questions:

Question 1

Country X's short-term interest rates are slightly higher than its long-term rates. Which THREE of the following statements are correct?

A. A long-term borrower would save by taking out a short-term loan and then refinancing
B. This difference may reverse.
C. Interest rates will definitely fall.
D. Country X's currency is expected to strengthen in the long-term.
E. Interest rates are expected to fall.

Question 2

A company is owned by its five directors who want to sell the business.
Current profit after tax is $750,000.
The directors are currently paid minimal salaries, taking most of their incomes as dividends.
After the company is sold, directors' salaries will need to be increased by $50,000 each year in total.
A suitable Price/Earnings (P/E) ratio is 7, and the rate of corporate tax is 20%.
What is the value of the company using a P/E valuation?

A. $4,900,000
B. $5,250,000
C. $5,530,000
D. $4,970,000

Question 3

ZZZ is a listed company based in Brinland. a European country. It is the largest owner and operator of residential care homes for elderly people in Brinland Most of the residential care homes in Brinland are run by small private operators, and the standards of cafe are extremely variable However. 22Z has developed a good reputation because its client service is considered to be extremely good even though its prices are higher than those of most of its competitors.
ZZZ has expanded rapidly in the last few years, partly by acquisition and partly by organic growth consequently, the company's share price now stands at a record high, and the dividend declared at the end of the most recent accounting period was 10% higher than the previous year's dividend.
The Brinland government has recently set up a regulatory body to monitor the residential care homes industry.
The regulatory body is considering introducing a variety of regulations to improve the customer experience in the industry. Following a period of consultation and investigation, the regulatory body is expected to announce a range of new regulations in the near future.
The directors of ZZZ are concerned that the new regulations may adversely affect their company Which THREE of the following new regulations are likely to have the greatest negative impact on ZZTs performance?

A. Price controls, setting a maximum price that providers can charge
B. Fines for companies that miss specified service level targets
C. Imposition of a minimum staff to client ratio.
D. Imposition of a one-off "windfall" tax to fund training courses for carers across the industry
E. Monopoly controls, forcing large operators to dispose of some care homes

Question 4

A national rail operating company has made an offer to acquire a smaller competitor.
Which of the following pieces of information would be of most concern to the competition authorities?

A. After the acquisition, the board proposes to withdraw some of the less profitable services.
B. The board informed a major institutional shareholder about the proposed acquisition before informing other shareholders.
C. The acquisition is likely to result in significant redundancies of staff currently working for the smaller rail operator.
D. After the acquisition, the board proposes to increase prices on some routes not serviced by other rail operators.

Question 5

Company P is a large unlisted food-processing company.
Its current profit before interest and taxation is $4 million, which it expects to be maintainable in the future.
It has a $10 million long-term loan on which it pays interest of 10%.
Corporate tax is paid at the rate of 20%.
The following information on P/E multiples is available:

Which of the following is the best indication of the equity value of Company P?

A. $24 million
B. $80 million
C. $40 million
D. $48 million

Solutions: