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CIMA P3 Exam With Confidence Using Practice Dumps

Exam Code:
P3
Exam Name:
Risk Management
Certification:
Vendor:
Questions:
339
Last Updated:
Jan 16, 2026
Exam Status:
Stable
CIMA P3

P3: CIMA Strategic Exam 2025 Study Guide Pdf and Test Engine

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Risk Management Questions and Answers

Question 1

YHJ is considering an investment in a project that will cost $20 million. Annual fixed costs will be $12 million per year, excluding depreciation. Annual sales are forecast at 5 million units, with a contribution per unit of $8. After five years the equipment will be worn out and YHJ will have to spend $50 million on disposal costs. The discount rate is 10%.

Calculate the sensitivity of the net present value of this project to a 20% increase in the disposal costs.

Options:

A.

11%

B.

13%

C.

31%

D.

20%

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Question 2

You are the Management Accountant for P, a food manufacturing company with an annual sales revenue of $5 million.

You discover that the Production Manager's records are inconsistent. Raw materials purchased do not agree to the total recorded for transfers to production plus wastage. There is an average shortfall of 2% of purchases.

You investigated and discovered that there are often mistakes made during manufacturing that results in food that is safe to eat, but cannot be sold because of visual flaws. The Production Manager is supposed to scrap all such damaged product and write all such losses off as waste, but you discovered that he has been giving the damaged food to a charity that assists homeless people. No records are made of such gifts in order to conceal the losses due to manufacturing errors.

What should you do?

Options:

A.

Do nothing, this is a good cause and the amount is insignificant.

B.

Instigate disciplinary action, this is both theft and poor management.

C.

Instigate a confidential, but documented, review with the Production Manager and tell him to stop.

D.

Instigate a review of the production process to potentially reduce the amount of wastage.

E.

Instigate a process whereby edible but unsellable items can be given to the charity officially.

Question 3

The treasurer of IOK is considering entering into a money market hedge in order to hedge a payable.

Which of the following might be valid explanations for the use of a money market hedge for this purpose?

Options:

A.

There are no forward contracts available for the purchase of the payable currency using IOK's home currency.

B.

The timing of the payable does not permit the use of a forward contract.

C.

The relevant currency markets are very thinly traded and the treasurer believes that forward contracts are mispriced.

D.

A money market hedge is easier and less expensive to organise than a future or forward contract.

E.

Money market hedges can be unwound whereas positions in derivatives cannot.