CIMAPRA19-F03-1 Exam - Topic 7 Question 121 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 121
Topic #: 7

[All CIMAPRA19-F03-1 Questions]

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

Forecast results for the next financial year are as follows:

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:

A$8.75 million profit

B$164.00 million profit

C$43.00 million profit

D$126.50 million loss

Show Suggested Answer

Suggested Answer: B

by Michael at Mar 08, 2026, 12:47 PM

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Bronwyn

11 hours ago

I feel a bit uncertain about how the unchanged costs play into this. If consumption rises, wouldn't that typically mean more revenue?

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This question seems similar to one we practiced where we had to adjust profits based on changes in pricing and demand. I think I might lean towards option B, but I need to double-check my calculations.

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Brunilda

11 days ago

I remember we discussed how price caps can affect profit margins, but I'm not sure how to calculate the new profit with the increased consumption.

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CIMAPRA19-F03-1 Exam - Topic 7 Question 121 Discussion

Contribute your Thoughts:

Bronwyn

Valentin

Brunilda