CIMA Exam CIMAPRA19-F03-1 Topic 7 Question 90 Discussion

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

Question #: 90
Topic #: 7

A company based inCountry D, whose currency is the D$, has an objective of maintaining an operating profit margin of at least 10% each year.

Relevant data:

* The companymakes sales to Country E whose currency is the E$. It also makes sales to Country F whose currency is the F$.

* All purchases are from Country G whose currency is the G$.

* The settlement of all transactions is in the currency of the customer or supplier.

Whichof the following changes wouldbe most likely to help the company achieve its objective?

AThe D$ strengthens against the E$ over time.

BThe F$ weakens against the D$ over time.

CThe D$ strengthens against the G$ over time.

DThe D$ weakens against the G$ over time.

Show Suggested Answer

Suggested Answer: A, B, E

by Misty at Jul 05, 2024, 06:04 AM

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8 days ago

A is the way to go! If the D$ strengthens against the E$, their sales to Country E will be more valuable in D$, boosting the profit margin.

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10 days ago

Why do you think that? Can you explain your rationale?

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11 days ago

I disagree, I believe option C would be more beneficial for the company.

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13 days ago

I think option A would help the company achieve its objective.

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