CBA Model Question Paper CO3 CBA Model Question . - CIMA

CBA Model Question Paper – CO3CBA Model Question Paper – CO3Paper 1Question 1A retailer buys a box of a product, which nominally contains Q units. The planned selling price ofeach unit is P. If both P and Q have been rounded to 10%, then the maximum rounding error intotal revenue isA 10%B 20%C 21%D 0 1Q x 0 1PQuestion 2The telephone costs of a company last year were 10,000, including Value Added Tax (VAT) at17 5%. It has been decided to allocate 60% of these telephone costs, excluding VAT, to CentralAdministration and to allocate 30% of the remainder, excluding VAT, to Finance.The telephone costs (to the nearest ) to be allocated to Finance will be closest toQuestion 3The following formula is used in the financial analysis of dividends:R (V/P) GWhen the formula is rearranged, with P in terms of the other variables, P is equal toA (R/V)-GB (R-G)/VC (V/R)-GD V/R-GQuestion 4A company’s market value has fallen from 32 billion to 2 billion in four years. The average annualpercentage decline in market value is closest toA 20%.B 40%.C 50%.D 100%.Question 5If 3x 2y 6 and x – 2y 2.The solution, in the form (x,y), to the above simultaneous equations is

CBA Model Question Paper – CO3Question 6The estimated total cost of each unit of a product is 12 ( 1), and the estimated selling price ofeach unit is 20 ( 3). The estimated profit per unit will beA 8 ( 4)B 8 ( 3)C 8 ( 2)D 8 ( 1)Question 7A trader’s weekly costs, TC, are less than or equal to 100. Weekly revenue, R, is a minimum of 120.Which ONE of the following statements is true?A TC 100 and R 120 and R TCB TC 100 and R 120 and TC RC TC 100 and R 120 and R TCD TC 100 and R 120 and R TCQuestion 8In a group of 100 players, 30 are male, 55 are at pro level, and 6 of the males are at beginner level. Aplayer chosen at random is female. What is the probability that she is not at pro level.A .80B .56C .44D.20Question 9Three people are carrying out independent functions during an internal audit. It is known that ineach of the three separate areas being investigated there is a serious error.From past experience, it is estimated that the (independent) chances of the individuals finding theserious error in their area are 0 8, 0 7 and 0 6.The probability that at least one of the serious errors will be found isA (0 8 x 0 3 x 0 4) (0 2 x 0 7 x 0 4) (0 2 x 0 3 x 0 6)B 1 – (0 2 x 0 3 x 0 4)C 1 – (0 8 x 0 7 x 0 6)D none of the above.

CBA Model Question Paper – CO3Question 10Mail order buyers of Brand X, classified by area and age (years)Area/AgeUnder 2525-4445-6465 est400350300250Total1,6001,4001,2001,000The probability that a randomly-selected Brand X buyer is from the North and under 25years of age is (to 2 decimal places)A 0 08B 0 25C 0 31D 0 56Question 11Mail order buyers of Brand X, classified by area and age (years)Area/AgeNorthSouthEastWestTotalsUnder 001003001,20065 250450502501,000The probability that a randomly-selected Brand X buyer is from the West or under 25years of age is (to 2 decimal places)A 0 08B 0 48C 0 56D none of these.

CBA Model Question Paper – CO3Question 12In an internal audit of 200 invoices, the following numbers of errors were discovered:Number of ErrorsNumber of Invoices0601302403404205106 or more0The expected value of the number of errors per invoice isA 1 8B2C 2 1D3Question 13The following information shows the daily sales revenue ( 000) of a company producing a particularitem of clothing, over a period of two years:Sales 0000 to under 1010 to under 2020 to under 3030 to under 4040 to under 50Frequency%52060105The expected daily sales (in 000) isQuestion 14A broker has estimated the profits or losses for a particular investment and their respectiveprobabilities as follows:Profit ( 000)-1135Probability.1.3.4.2The expected profit ( 000) on this investment will be

CBA Model Question Paper – CO3Question 15A cumulative frequency distribution of weekly spending is as followsWeekly spendingCumulative frequencyLess than 7550Less than 100140Less than 150180Less than 200200Less than 300220A How many spent between 150 to 200.B How many spent Less than 300.Question 16In a particular country, a tax at 40% is payable on any gains on house sales not due to inflation. Ahouse was purchased there for 75,000 and sold for 250,000. Over the same period, the country’shouse price (inflation) index rose from 120 to 240.The tax (to the nearest ) payable on the house sale isQuestion 17The numbers of rejects from 50 samples of the same size is as follows:Number of rejects in each sample012345Number of samples (frequency of reject)510102050The arithmetic mean number of rejects per sample isA 2 2B 2 4C3D 20Question 18For the following set of ten numbers, the median is 15:10 11 12 13 14 16 17 18 19 20 XThis statement is false if X equalsA –5B –4C –3D –2

CBA Model Question Paper – CO3Question 19Details of an index number are given below:GroupFood & DrinkTravel & LeisureHousingAll ?The All items index number is closest toA 130B 133C 135D 146Question 20Weekly money wagesindex 1998 100Index of inflation 1990 1001998100199910520001102001115180190200210Read the following statements about the period 1998 to 2001:(i) Inflation has increased by more than money wages.(ii) Money wages have increased by 5% each year, year on year.Which ONE of the following is true?A (i) onlyB (ii) onlyC Both (i) and (ii)D Neither (i) nor (ii)Question 21An index number is made up of two items, food and non-food.Sub- groupNon – foodFoodAll itemsWeight7310Index130?127The index number for the sub-group Food is closest to -----------------

CBA Model Question Paper – CO3Question 22On the basis of the scatter diagram above, which of the following equations would best representthe regression line of Y on X?A Y –X 8B Y X 8C Y X–8D Y –X – 8Question 23For a certain group of students, the coefficient of rank correlation between their performance inAccounting and their performance in Law is –1. The coefficient of rank correlation between theirperformances in Law and FBSM is also –1. Therefore, the coefficient of rank correlation betweentheir performance in Accounting and their performance in FBSM isA –2B zeroC 1D impossible to determine from the information given.Question 24The number of daily complaints to a railway company has an average (arithmetic mean) of 12 and astandard deviation of 3 complaints.The coefficient of variation, measured as a percentage, is thereforeA 0 25%.B 4%.C 25%.D 400%.

CBA Model Question Paper – CO3Question 25For a set of six pairs of observations for the variables X (number of employees in hundreds) and Y(product sales in thousands of units), the following results were obtained:ΣX 1 ΣY 15 ΣX2 15 ΣY2 65 ΣXY 7The correlation coefficient is nearest toA 0·22B 0·47C 0·90D - 0·32Question 26The Personnel Department of a large manufacturing company wishes to measure the correlationbetween the performance of its employees on an aptitude test, and their ability to carry out aspecific work-related task.The following table shows the rankings of 7 employees at both the test and the task:EmployeeTest RankTask RankA22B56C77D44E13F65G31Spearman’s rank correlation coefficient for this data is-------------Question 27On one particular checkout in a supermarket, the service times in minutes of five customers were:3, 2, 1, 5, 4The standard deviation of these service times, correct to 1 decimal place, is closest toQuestion 28At a second checkout in the same supermarket as in sub-question, the service time has an arithmeticmean of 5 minutes and a standard deviation of 1 minute.The coefficient of variation will beA 50%B 20%C 5%D 2%Question 29The sales of a product are recorded monthly for 24 months. The four-point (centred) movingaverages are calculated and plotted on a graph.How many moving average points are plotted?A 20B 21C 22D 24

CBA Model Question Paper – CO3Question 30If a company has sales values of 1800 at a certain point and the seasonal factor is 1.13, using themultiplicative model the adjusted figure to the nearest 00 will be?Question 31The underlying trend in the demand for a particular product is constant (flat), and is subject toquarterly seasonal variations as follows:QuarterSeasonalityQ1 50%Q2 50%Q3-50%Q4-50%Assume a multiplicative model is appropriate.If the demand for the last quarter, Q2, was 240 units, then the forecasted demand for the nextquarter, Q3, isA 80 units.B 100 units.C 120 units.D 140 units.Question 32The following time series represents the weekly sales ( 000) of a particular product:Weekly Sales 000120022403250422052306260Assuming an additive model, and based on the information given, the seasonally-adjusted salesfigure ( 000) for week 4 will beA 237·5B 222·5C 220·0D 202·5

CBA Model Question Paper – CO3Question 33A multiplicative time series model should be assumed.Quarterly sales (units) of Brand X, 2001Sales (units)SeasonalVariationQ11,600-20%Q24,400 100%Q31,680-30%The trend value for Q1 sales (units) isA 1,280B 1,920C 2,000D none of these.Question 34A multiplicative time series model should be assumed.Quarterly sales (units) of Brand X, 2001Sales (units)SeasonalVariationQ11,600-20%Q24,400 100%Q31,680-30%A –50%B 0%C 50%D none of these.Question 35A multiplicative time series model should be assumed.Quarterly sales (units) of Brand X, 2001Sales (units)SeasonalVariationQ11,600-20%Q24,400 100%Q31,680-30%The forecast for the fourth quarter’s sales (units), Q4, in 2001, assuming the trendpattern continues, is closest toA 1,300B 2,300C 3,800D 5,200

CBA Model Question Paper – CO3Question 36An annual (year-end) income of 10,000 is required in perpetuity. If there is a fixed interest rate of8% each year and administrative charges are ignored, the lump sum investment necessary now isclosest toA 9,260B 80,000C 100,000D 125,000Question 37An annual year-end income of 15,000 is required in perpetuity. Assuming a fixed rate of interest of9% each year, and ignoring administrative charges, the sum required now to purchase the annuity isclosest toA 13,650.B 135,000.C 150,000.D 167,000.Question 38 2,000 is invested in a bank account. The account earns compound interest at 5% per year.The cash value of the account, to the nearest , at the end of five years will beA 2,680B 2,553C 2,431D 2,335Question 39 2,000 is invested in a bank account. The account earns compound interest at 5% per year.The investment will have almost doubled in value afterA 11 years.B 12 years.C 13 years.D 14 years.Question 40A 100,000 mortgage, with interest compounded at 11% each year, is to be repaid by 10 equal yearend payments of X, the first being due one year after the mortgage was contracted.

CBA Model Question Paper – CO3Question 41A fixed-interest 200,000 mortgage, with annual interest compounded at 6% each year, is to berepaid by 15 equal year-end repayments of R.The annual repayment R will be closest toA 14,133.B 20,593.C 31,954.D 83,400. X is closest toQuestion 42You borrow 3,000 and pay 10% each year interest. Ignoring capital, if you pay this interest at the endof each year, what is the present value of the interest payable at the end of the third year?A (3/10) x 300 x 3B (7/10) x 300C (10/11) 3 x 300D 3000 x (11/10) 3Question 43A group of 10 people share the cost of a new year s eve for 40 friends. The price of the meal perperson is 20 plus 4 for wine and 2 for coffee. Calculate the amount each of the 10 will need topay. Write down a formula which could be input into one cell in Excel to calculate the amount thatthe 10 will need to pay.Question 44Enter the formula required in Excel to perform the following calculation to the specified decimalplaces in each case:37/9 X 4.34 ( to 2d.p)

CBA Model Question Paper – CO3Question 45Below is an extract from an Excel spreadsheetFor the given data, give the Excel formulae that would be required in Excel to calculate the ROI andNPV in cells B10 and B11 respectively.