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CIMA Updated F3 Exam Questions and Answers by karson

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CIMA F3 Exam Overview :

Exam Name: Financial Strategy
Exam Code: F3 Dumps
Vendor: CIMA Certification: CIMA Strategic level
Questions: 435 Q&A's Shared By: karson
Question 100

A company generates and distributes electricity and gas to households and businesses.

Forecast results for the next financial year are as follows:

Questions 100

The Industry Regulator has announced a new price cap of $2.00 per Kilowatt.

The company expects this to cause consumption to rise by 15% but costs would remained unaltered.

The price cap is expected to cause the company's net profit to fall to:

Options:

A.

$8.75 million profit

B.

$164.00 million profit

C.

$43.00 million profit

D.

$126.50 million loss

Discussion
Question 101

A company is deciding whether to offer a scrip dividend or a cash dividend to its shareholders. 

Although the company has excellent long-term growth prospects, it is experiencing short-term profit and cash flow problems.

 

Which of the following statements is most likely to be a reason for choosing the scrip dividend?

Options:

A.

It is a way of raising additional finance to promote future growth.

B.

It is a way of increasing earnings per share.

C.

It is a way of encouraging shareholders to allow cash to be retained in the business.

D.

It is a way of increasing dividend per share.

Discussion
Question 102

Company AAB is located in Country A with the A$ as its functional currency It plans to grow by acquisition and has identified Company BBA as a potential takeover candidate Company BBA is located in Country B with the BS as its functional currency.

The directors of Company AAB are concerned about foreign currency risk if the acquisition goes ahead

Which of the following will be most effective in reducing Company AAB's exposure to translation risk if the acquisition is successful1?

Options:

A.

Financing the acquisition with equity in A$’s.

B.

Setting up a mufti-currency bank account to net-off receipts and payments

C.

Financing the acquisition with borrowings in BS's

D.

Using forward contracts to fix the exchange rate between the AS and the B$

Discussion
Question 103

An unlisted software development business is to be sold by its founders to a private equity house following the initial development of the software. The business has not yet made a profit but significantprofits are expected for the next three years with only negligible profits thereafter. The business owns the freehold of the property from which it operates. However, it is the industry norm to lease property.

Which THREE of the following are limitations to the validity of using the Calculated Intangible Value (CIV) method for this business?

Options:

A.

The business owns the freehold property from which it operates.

B.

Significant profits are forecast for the next three years with only negligible profits thereafter.

C.

The business has not yet made a profit.

D.

The CIV method cannot be applied to an unlisted company.

E.

The intellectual property representing the software development has not been included in the accounts.

Discussion
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