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C03Fundamentals of Business Mathematics

C03 Fundamentals of Business Mathematics

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C03 Fundamentals of Business Mathematics

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Fundamentals of

Business Mathematics

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How CIMA benefit your Business

Analysis - Understanding the history behind numbers and use it to make business

decisions

Strategy – Using the insight from analysis to help formulate business strategy to create

wealth and shareholder value.

Risk - The application of analytical skills to observe business processes end end a pair

identify and manage risks.

Planning – using accounting techniques to plan and budget.

Communication – knowing what information management needs and explaining the

numbers to non-financial managers.

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Question No 1:

A retailer buys a box of a product, which nominally contains Q units. The planned selling price of each unit is £P. If both P and Q have been rounded to ± 10%, then the maximum rounding error in total revenue is

A. 10% B. 20% C. 21% D. 0∙1Q x 0∙1P



Question No 2:

The telephone costs of a company last year were £10,000, including Value Added Tax (VAT) at 17∙5%. It has been decided to allocate 60% of these telephone costs, excluding VAT, to Central Administration 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 to

A. 10% B. 20% C. 21% D. 0∙1Q x 0∙1P



Question No 3:

The following formula is used in the financial analysis of dividends: R= (V/P)+G When the formula is rearranged, with P in terms of the other variables, P is equal to

A. (R/V)-G B. (R-G)/V C. (V/R)-G D. V/R-G



Question No 4:

A company’s market value has fallen from £32 billion to £2 billion in four years. The average annual percentage decline in market value is closest to

A. 20%. B. 40%. C. 50%. D. 100%.



Question No 5:

If 3x + 2y = 6 and x – 2y = 2. The solution, in the form (x,y), to the above simultaneous equations is

CBA Model Question Paper – CO3



Question No 6:

The estimated total cost of each unit of a product is £12 (± £1), and the estimated selling price of each unit is £20 (± £3). The estimated profit per unit will be

A. £8 (± £4) B. £8 (± £3) C. £8 (± £2) D. £8 (± £1)



Question No 7:

A 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 > TC B. TC ≥ $100 and R ≤ $120 and TC > R C. TC ≤ $100 and R > $120 and R < TC D. TC ≤ $100 and R ≥ $120 and R > TC



Question No 8:

In a group of 100 players, 30 are male, 55 are at pro level, and 6 of the males are at beginner level. A player chosen at random is female. What is the probability that she is not at pro level.

A. 80 B. 56 C. 44 D. 20



Question No 9:

Three people are carrying out independent functions during an internal audit. It is known that in each 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 the serious 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 is

A. (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.



Question No 10:

The number of daily complaints to a railway company has an average (arithmetic mean) of 12 and a standard deviation of 3 complaints. The coefficient of variation, measured as a percentage, is therefore

A. 0∙25%. B. 4%. C. 25%. D. 400%.



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