CIMA Business Mathematics Fundamentals Past Papers

Foundation Level
Business Mathematics
3c
INSTRUCTIONS TO CANDIDATES Read this page before you look at the questions You are allowed TWO hours to answer this question paper. Ensure that there is graph paper on your desk. Answer the ONE question in section A (this has 25 sub-questions). Answer TWO questions ONLY from section B.
FBSM
21 May 2001 Day 1 late afternoon
Maths Tables and Formulae are provided elsewhere on the website, but were included within the printed question paper. Write your examination number in the boxes provided on the front of the answer book. Write FBSM on the line marked "Subject" on the front of the answer book. Write your examination number on the special answer sheet for section A which is on page 3 of this question paper booklet. Detach the sheet from the booklet and insert it into your answer book before you hand this in. Do NOT write your name or your student registration number anywhere on your answer book. Tick the appropriate boxes on the front of the answer book to indicate which questions you have answered.
The Chartered Institute of Management Accountants 2001
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SECTION A 50 MARKS ANSWER ALL TWENTY-FIVE SUB-QUESTIONS 2 MARKS EACH

Each of the sub-questions numbered from 1.1 to 1.25 inclusive, given below, has only ONE correct answer. Question One The numbers of rejects from 50 samples of the same size is as follows: Number of rejects in each sample: Number of samples (frequency of rejects): The arithmetic mean number of rejects per sample is A 2!2 B 2!4 C 3 D 20 0 5 1 10 2 10 3 20 4 5 5 0
1.1
1.2
The unit price of Brand X in May 2000 and May 2001 was as follows: Year Unit price of Brand X 2000 1!40 2001 1!75
The price relative for Brand X in May 2001, with base May 2000 = 100 is A 80 B 120 C 125 D 135
1.3
On which ONE of the following graphics can the median readily be found without further calculation? Bar chart Cumulative frequency curve Histogram Pie chart
A B C D
1.4
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 10% B 20% C 21% D 0!1Q x 0!1P
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May 2001
1.5
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 990 B 1,021 C 1,100 D 1,135
1.4
The formula Q =
2CD H
is used in stock control.
When the formula is rearranged, with H as the subject, H equals A 2CD Q2 B 4CD Q2 C 2CD Q D 2CD Q
1.7
A companys market for computer supplies has trebled in value in exactly six years. The annual equivalent percentage growth rate in this market is (to 2 decimal places) closest to 12!25 B 20!09 C 24!57 D 33!33
1.8
The following statements are often made about simple random sampling. (i) (ii) It ensures a representative sample. It eliminates selection bias.
Which one of the following is always true? A (i) only B (ii) only C Both (i) and (ii) D Neither (i) nor (ii)
1.9
A machine was purchased for 100,000. Depreciation is calculated using the reducing balance method (that is, a constant percentage is applied each year to the written down value). In the last balance sheet, the net book value of the machine, exactly four years old, was shown as 50,000.
In the next balance sheet the machine should be shown to have a net book value, rounded to the nearest 100, closest to A 37,500 B 40,000 C 42,000 D 43,500
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1.10 In a particular country, a tax at 40% is payable on any gains on house sales not due to inflation. A house was purchased there for $75,000 and sold for $250,000. Over the same period, the countrys house price (inflation) index rose from 120 to 240. The tax (to the nearest $) payable on the house sale is A $28,000 B $37,500 C $40,000 D $70,000
1.11 Each of the following diagrams shows a histogram of data with equal area. The vertical and horizontal scales of each histogram are identical. Which set of data (histogram) has the largest standard deviation? A Employees Employees B
0 C Employees
Wages
0 D Employees
Wages
Wages
Wages
1.12 The lengths of steel rods are Normally distributed with a mean of 100mm and a standard deviation of 5mm. The percentage of steel rods with a length of less than 95mm is closest to A 5% B 16% C 20% D 34%
1.13 The calculation of a rank correlation coefficient [formula given in the Mathematical Tables sheet 3 on page 19], shows that ten pairs of data are found to be perfectly negatively correlated. Therefore, the value of d equals A zero B 165 C 330 D none of these.
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May 2001
1.14 A 100,000 mortgage, with interest compounded at 11% each year, is to be repaid by 10 equal year-end payments of X, the first being due one year after the mortgage was contracted. X is closest to A 16,111 B 16,273 C 16,981 D 25,937
1.15 The quarterly sales (units) of a company are given in the table below. Year 1997 1998 1999 Q1 13 29 24 Q2 52 43 55 Q3 56 48 46 Q4 79 80 75
Read the following statements. (i) (ii) (iii) Annual sales are static. The fourth quarter, Q4, has the highest quarterly sales in each of the three years. The mean sales for the second quarter (Q2) equals the mean quarterly sales for the whole period, 1997-99.
Which is true? A (i) only B (i) and (ii) only C (ii) and (iii) only D (i), (ii) and (iii)
1.16 An accountant has to check a sample of invoices. The invoices are divided into three groups, by value: under 100, 100 500 and over 500. Samples are then selected randomly from each group. Which ONE of the following sampling methods is involved? A cluster B multi-stage C quota D stratified
1.17 The equations of two straight lines are given below: Y=7+X Y = 9 + 3X
These lines intersect where the (X, Y) co-ordinates are equal to A (1,6) B (1,6) C (1,8) D none of these
The following information is to be used for sub-questions 1.18 and 1.19 A scatter diagram shows the weekly total costs of production () in a certain factory plotted against the weekly output (units). A broadly linear pattern is evident, with r = 0!9. The regression equation is COSTS = 1,500 + (15 x OUTPUT). Fifty data points have been included in the analysis, with output ranging from 100 units to 1,000 units. Output next week is planned to be 500 units.
M2001
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1.18 Read the following statements about estimates. (i) (ii) (iii) Weekly fixed costs are approximately 1,500. Variable costs are approximately 15 per unit on average. Next weeks production costs are likely to be about 9,000.
Which one of the following is true, all other things being equal? A (i) and (ii) only B (i) and (iii) only C (ii) and (iii) only D (i), (ii) and (iii)
1.19 Read the following statements: (i) (ii) (iii) There is very little correlation between weekly costs of production and production level. 90% of the variation in weekly costs is attributable to the amount produced. Given the information, any forecast using the regression equation is likely to be very unreliable.
Which one of the following is justified? A (ii) only B (i) and (iii) only C (ii) and (iii) only D None of them
1.20 Three independent experts have estimated the probability of a companys future annual sales: Sales Expert W Expert X Expert Y High [1m] 0!2 0!1 0!1 Medium [0!5m] 0!3 0!4 0!6 Low [0!25m] 0!5 0!5 0!3
The highest expected value for the companys estimated annual sales is given by A W only. B X only. C Y only. D Both W and Y.
1.21 Details of an index number are given below: Group Food & Drink Travel & Leisure Housing All items Base 100 100 100 100 Weight 50 30 20 100 Index 140 130 120 ??
The All items index number is closest to A 130 B 133 C 135 D 146
FBSM
May 2001
1.22 For the following set of ten numbers, the median is 15: 10 11 12 13 14 16 17 18 19 20+X
This statement is false if X equals A 5 B 4 C 3 D 2
1.23 Which of the following could have a value of 2 (minus 2)? (i) (ii) (iii) A Correlation coefficient Slope of a regression line Variance B (i) and (ii) only C (i) and (iii) only D (ii) and (iii) only
(ii) only
1.24 The following data represents a time series for the last seven days: 2 6 10 6 10 14 10
Which ONE of the following moving averages would result in a straight-line graph? A 2-point B 3-point C 4-point D None of these.
1.25 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 B C D (0!8 x 0!3 x 0!4) + (0!2 x 0!7 x 0!4) + (0!2 x 0!3 x 0!6) 1 (0!2 x 0!3 x 0!4) 1 (0!8 x 0!7 x 0!6) none of the above.
Total = 50 marks
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SECTION B 50 MARKS ANSWER TWO QUESTIONS ONLY

Question Two A Health and Fitness Centre has to buy one of two types of machine, A or B. Machine A would cost 200,000, half of which would be due on delivery, the remainder a year later. Machine B would cost 240,000, with payment due in the same way as for machine A. Both machines last for 6 years and have an expected scrap value of 10% of their original cost price. Taking into account operating costs and maintenance, machine A would produce year-end net operational cash flows of 40,000 and machine B year-end net operational cash flows of 50,000. In both cases the relevant cost of capital is 10% each year.
Required:
(a) Calculate the net present value of each machine. (11 marks) (b) Recommend which machine should be bought, giving your reasons and assumptions. (4 marks) (c) Estimate the internal rate of return for your recommended machine, using a graph or
calculation, and state its meaning.
(10 marks) (Total = 25 marks)
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10
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Question Three A retailer sells computer games. Tabulated below are the unit sales of one of its games for the last 13 quarters, together with the computer-generated trend equation and average seasonal variations. For planning purposes, forecasts of sales are required for the remaining three quarters of this year. (The brand was introduced in 1997.) Sales 1998 1999 2000 2001 Trend equation: where Q1 105 80 50 30 S = 180 10T Q2 95 70 50 Q3 150 110 70 Q4 250 180 110
S = sales units and T = time period in quarters
[For example, T = 1 in Q1 of 1998, T = 2 in Q2 of 1998, T = 3 in Q3 of 1998 .. T = 5 in Q1 of 1999 and so on.] Average seasonal variations for the years 1998 2001 Q1 Q2 Q3 0 Q4 +80%
-40%
-40%
Required:
(a) Plot a time series graph of the unit sales, and include the trend on the same graph. (10 marks) (b) Forecast the unit sales for the second, third and fourth quarters of 2001, and comment on
the reliability of these forecasts.
(8 marks) (c) Interpret the key factors in this game's unit sales, 1998 2001. (7 marks) (Total = 25 marks)
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11
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Question Four A bakery produces fresh cakes each day in anticipation of demand. The variable costs of production are 0!20 per cake and the retail price is 0!50 per cake. The daily demand for cakes over the last four months is shown in the table below. At the end of each day, any unsold cakes are sold to a local pig farmer for 0!05 per cake. Daily demand (number of cakes) Number of days 1 39 10 40 79 20 80 119 30 120 159 30 160 199 10
(For practical purposes, you may assume the midpoints of the class intervals to be 20, 60, 100, 140, 180.)
Required:
(a) Prepare a 5 x 5 contribution table for each production / demand combination and calculate
the expected contribution for each level of production.
(20 marks) (b) Recommend, with reasons and comments, the most suitable production policy for the
bakery.
End of paper
FBSM
12
M2001
Foundation Level
3c
INSTRUCTIONS TO CANDIDATES Read this page before you look at the questions You are allowed TWO hours to answer this question paper. Ensure that there is graph paper on your desk.
FBSM
19 November 2001 Day 1 late afternoon
Answer the ONE question in section A (this has 25 sub-questions, and is on pages 2 7). Answer TWO questions ONLY from section B (these questions are on pages 8 10). Maths Tables and Formulae were provided in the printed question paper and are available elsewhere on the website. Write your examination number in the boxes provided on the front of the answer book. Write FBSM on the line marked "Subject" on the front of the answer book. Write your examination number on the special answer sheet for section A. Detach the sheet from the booklet and insert it into your answer book before you hand this in. Do NOT write your name or your student registration number anywhere on your answer book. Tick the appropriate boxes on the front of the answer book to indicate which questions you have answered.

Each of the sub-questions numbered from 1.1 to 1.25 inclusive, given below, has only ONE correct answer.
Question One 1.1 The sales of a product increase at a rate of 1% each month, month on month, for a year. This is equivalent to an annual percentage rate of expansion closest to 11!3% B 12!0% C 12!7% D 13!0%
1.2
An annual (year-end) income of 10,000 is required in perpetuity. If there is a fixed interest rate of 8% each year and administrative charges are ignored, the lump sum investment necessary now is closest to 9,260 B 80,000 C 100,000 D 125,000
1.3
The numbers of hours worked last week by a companys 11 employees were: P Q 35 36 R 36 S 36 T 40 U 38 V 40 W 37 X 35 Y 42 Z 43
The median number of hours worked last week was A 36 B 37 C 38 D 39
1.4 A
The straight lines Y = 2X + 4 and Y = 12 2X intersect where (X,Y) equals (2, 0) B (0,12) C (0,4) D (2,8)
1.5
A 1% random sample of mail order customers, each with a serial number, is to be selected. A random number between 00 and 99 is chosen, and turns out to be 29. Customers with serial numbers 29, 129, 229, 329 and so on are then selected to be the sample.
This type of sample is termed A biased. B multi-stage. C quota. D systematic.
FBSM
November 2001
1.6
The following formula is used in loan calculations: R= 2PC B(N + 1)
When the formula is rearranged, with N in terms of the other letters, N is equal to A 2PC 1 RB B 2PC - 1 RB C 2PC 1 D none of these
1.7
The formula S2 1 1
1 1 S 2 1 simplifies to 1 1 1 1 B S2 C 10S 2 1 1 D 10 S 2
1.8
A garage has experienced the following regular weekly demand for its hire cars over the last 50 weeks: Weekly demand for hire cars: Number of weeks (frequency): 0 10 1 5 2 15 3 15 4 5 5 or more 0
The expected value of weekly demand equals A 2!0 cars. B 2!2 cars. C 2!5 cars. D none of these.
1.9
In the equation C = 6 + 0!5Q, C denotes the total cost of sales (in thousands of $) and Q denotes the number of units sold (in thousands).
The total cost of sales for 3,000 units is therefore A $1,506!00 B $6,001!50 C $7,500!00 D $19,500!00
1.10
The rank correlation coefficient between the ages and the scrap values of a certain type of machine equals 1.
This value means that A B C D no correlation exists between the ages and the scrap values of these machines. perfect correlation exists. weak negative correlation exists. a calculation error has been made.
November 2001
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1.11
The lengths of a very large batch of metal rods are Normally distributed with a mean length of 300 millimetres and a standard deviation of 10 millimetres.
The percentage of the batch which is longer than 285 millimetres is closest to A 43% B 57% C 84% D 93%
1.12
A $20,000 new car depreciates in value by 20% 2% each year (year-end). (The car depreciates by the reducing balance method, which means that a constant percentage is applied each year to the written down value.)
Therefore, after 3 years, the cars value is most accurately estimated by A B C D between $9,491 and $11,027 $10,240 $1,024 $10,240 $205 between $12,168 and $13,448
1.13
A traders 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 B C D TC < $100 and R > $120 and R > TC TC $100 and R $120 and TC > R TC $100 and R > $120 and R < TC TC $100 and R $120 and R > TC
1.14
A company has to repay a mortgage by making 10 year-end payments of $50,000. The compound interest rate is fixed at 8% each year. Therefore, the size of the mortgage is closest to
$266,750
$307,250
$335,500
$356,900
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November 2001
The next two sub-questions, 1.15 and 1.16 are based on the following data.
Weekly money wages index (1998 = 100) Index of inflation (1990 = 100)
1998 100 180
1999 105 190
2000 110 200
2001 115 210
1.15 Read the following statements about the period 1998 to 2001: (i) Inflation has increased by more than money wages.
(ii) Money wages have increased by 5% each year, year on year. Which ONE of the following is true? A (i) only B (ii) only C Both (i) and (ii) D Neither (i) nor (ii)
1.16
Real wages are money wages that have been adjusted for inflation, that is, deflated. Over the period 1998 to 2001, real wages have (approximately) remained unchanged. decreased by 1!43%. decreased by 1!67%. increased by 1!45%.
A B C D
1.17 If aX + bX + c = 0, then X = If X 2X 24 = 0, then X equals A 2 10 2 B
b (b 2 4ac ) 2a
2 92 2
2 96 2
2 10 2
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The next three sub-questions, 1.18 1.20, are based on the following data. A multiplicative time series model should be assumed.
Quarterly sales (units) of Brand X, 2001 Q2 Q3 Q1 Sales (units) 1,600 4,400 1,680 Seasonal variation 20% +100% 30%
1.18 The trend value for Q1 sales (units) is A 1,280 B 1,920 C 2,000 D none of these.
1.19 The seasonal variation for Q4 in 2001 is A 50% B 0% C +50% D none of these.
1.20
The forecast for the fourth quarters sales (units), Q4, in 2001, assuming the trend pattern continues, is closest to 1,300 B 2,300 C 3,800 D 5,200
1.21
The staff in the Complaints Department of an airline are available to answer the telephone at random times, which amount to 20% of the working day on average.
The probability that a customers call is answered for the first time, on their fifth attempt is A (0!2)
5
(0!2) (0!8)
(0!8) (0!2)
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November 2001
The next four sub-questions, 1.22 1.25, are based on the following table of data.
Mail order buyers of Brand X, classified by area and age (years) Area \ Age North South East West Totals Under 25 400 600 200 400 1,600 25 44 350 550 150 350 1,400 45 64 300 500 100 300 1,200 65+ 250 450 50 250 1,000
1.22
The probability that a randomly-selected Brand X buyer is from the North and under 25 years of age is (to 2 decimal places) 0!08 B 0!25 C 0!31 D 0!56
1.23
The probability that a randomly-selected Brand X buyer is from the West or under 25 years of age is (to 2 decimal places) 0!08 B 0!48 C 0!56 D none of these.
1.24
The probability that a randomly-selected Brand X buyer, who is under 25 years of age, is from the South is (to 3 decimal places) 0!115 B 0!286 C 0!375 D none of these.
1.25
The probability that two randomly-selected Brand X buyers are both under 25 years of age is (to 2 decimal places) 0!09 B 0!31 C 0!62 D none of these.
(Total = 50 marks)
November 2001
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SECTION B 50 MARKS ANSWER TWO QUESTIONS ONLY

Question Two A factory's monthly production costs and output from a production line for circuit boards are as follows:
Jan Feb Mar April May June July Aug Sept Oct
Output Costs
X (units) Y (000)
200 10 Y = 106
150 9
400 12
450 14
50 5
500 16
150 10
350 14
100 6
250 10
X = 2,600
X = 895,000
Y = 1,234
XY = 32,200
Required:
(a) (i) Draw on graph paper a scatter diagram of costs against output.
[Do not draw in your "line of best fit".]
(6 marks)
(ii) Comment on your diagram.
(2 marks) (b) (i)

Calculate the least-squares regression of costs on output and plot this line on the diagram.
(6 marks)
(ii) Explain the meaning of your regression line.
(3 marks) (c) Estimate approximate values for the correlation coefficient, and r-squared, and explain their
meanings. [Do not calculate the value of r.]
(3 marks) (d) The planned output of the factory for November is 300 circuit boards.
(i)
Forecast the costs for November.
(2 marks)
(ii) Discuss the reliability of your forecast.
FBSM
November 2001
Question Three The Technical Support department of a software company has received the following number of telephone enquiries each day to its Help Line over the last (typical) fifty days: 15 8 13 9 24 7 13 34 5 9 11 2 6 21 18 25 14 18 7 29 9 16 26 18 9 23 20 6 11 20 8 8 14 3 7 19 11 17 33 5 12 8 12 0 9 27 19 6 14 22
Required:
(a) Tabulate these data as a frequency distribution, using seven class intervals of equal width. (7 marks) (b) Plot an ogive (a "less than" cumulative frequency curve) for your distribution on graph
paper, and clearly label the positions (locations) of the median and the quartiles.
(8 marks) (c) From the graph, estimate the numerical values of the median and the quartiles in (b) and
briefly explain their meaning.
(6 marks) (d) The cost of the Help Line service to the Technical Support department is 5 each call.
Assume there are 300 working days in the year. Calculate an estimate of the annual cost of the Help Line, and comment on the reliability of your estimate.
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Question Four
(a) A company needs to have a cash balance of 500,000 in exactly three years from now. It
plans to achieve this by putting 12 equal quarterly sums into a Fund. The first sum will be deposited in three months from now. The Fund attracts compound interest of 2!5% each quarter.
[Formulae are provided on page 19.]
Required:
(i)
Calculate the size of the quarterly sum required for the Fund.
(8 marks)
(ii) Demonstrate simply why your answer is reasonable.
(2 marks)
(b) A company is considering the purchase of one of two machines, A or B, for 180,000. The
terms of payment for each machine are 90,000 on delivery and 90,000 a year later. The machines are expected to produce year-end net cash flows as follows: Time (end of year) Net cash flow of A (000) Net cash flow of B (000) 1 60 40 2 50 40 3 40 40 4 30 40 5 20 40
At the end of year 5, either machine would be sold for 20,000. The annual cost of capital is 9% for each year.
Required:
(i)
Calculate the net present value of each machine.
(12 marks)
(ii) Recommend which machine should be purchased, and explain why.
End of paper
FBSM
10
November 2001
Examination Question and Answer Book

Write here your full examination number Centre Code: Hall Code: Desk Number:
Foundation Level
3c
INSTRUCTIONS TO CANDIDATES
Read this page before you look at the questions
FBSM
20 May 2002 Day 1 late afternoon
THIS QUESTION PAPER BOOKLET IS ALSO YOUR ANSWER BOOKLET. Sufficient space has been provided for you to write your answers and also for workings where questions require them. For section B questions, you must write your answers in the shaded space provided. Additional blank sheets (pages 18-20) are included if you require more space for notes or workings. Please note that you will NOT receive marks for your notes or workings. Do NOT remove any sheets from this booklet: cross through neatly any work that is not to be marked. Avoid the use of correction fluid. You are allowed two hours to answer this question paper. All questions are compulsory. Answer the ONE question in section A (this has 25 sub-questions and is on pages 2-11) Answer the THREE questions in section B (these are on pages 12-17) Maths Tables and Formulae are provided on pages 21-26 You are advised to spend 10 minutes reading through the paper before starting to answer the questions. You should spend no more than 55 minutes on answering the ONE question in section A, which has 25 sub-questions. You should spend no more than 55 minutes on answering the THREE questions in section B. Hand this entire booklet to the invigilators at the end of the examination. You are NOT permitted to leave the examination hall with this booklet. Do NOT write your name or your student registration number anywhere on this booklet. TURN OVER
For office use only

Marks awarded (First marker) for each question Marks awarded (Second marker) for each question
Total
One
Two
Three
Four
Each of the sub-questions numbered from 1.1 to 1.25 inclusive, given below, has only ONE correct answer. REQUIRED: Place a circle O around the letter A, B, C or D that gives the correct answer to each sub-question. If you wish to change your mind about an answer, block out your first answer completely and then circle another letter. You will NOT receive marks if more than one letter is circled. Please note that you will NOT receive marks for any workings to these sub-questions. Sufficient space has been provided for you to do your workings where these sub-questions require them. Question One 1.1 An index number increases each year by 10% of its value in the previous year. If its value in 1999 was 120, its value in 2002 is closest to 150. B 156. C 160. D 162.
Space for workings to 1.1
1.2 A B C D
In a time series of the unit sales of shoes, random variation could be caused by a general trend. seasonal effects due to the weather. cyclical effects resulting from a change in fashion. unexplained or freak events.
For office use only

Marks awarded (First marker) for each sub-question Marks awarded (Second marker) for each sub-question
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Total
1.1
1.2
May 2002
1.3
An annual year-end income of 15,000 is required in perpetuity. Assuming a fixed rate of interest of 9% each year, and ignoring administrative charges, the sum required now to purchase the annuity is closest to 13,650. B 135,000. C 150,000. D 167,000.
1.4 A B C D
Which ONE of the following describes a qualitative variable? The number of invoices selected for an internal audit. The number of errors discovered in batches of invoices. The $ value of the error made in invoices in a batch. The type of error made in invoices.
1.5
For a certain group of students, the coefficient of rank correlation between their performance in Accounting and their performance in Law is 1. The coefficient of rank correlation between their performances in Law and FBSM is also 1. Therefore, the coefficient of rank correlation between their performance in Accounting and their performance in FBSM is 2 zero +1 impossible to determine from the information given. Space for workings to 1.5
A B C D
TURN OVER
For office use only

May 2002 3
Total
1.3
1.4
1.5
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1.6
An accountant has marked some performance criteria out of 20 and found the mean to be 10 marks and the standard deviation to be 2 marks. The marks now have to be expressed as a percentage. What would be the new value of the standard deviation?
!10%
!20%
10%
20%
1.7
An index number is made up of two items, food and non-food. Sub-group Non-food Food All items Weight 7 3 10 Index 130 ? 127
The index number for the sub-group Food is closest to A 120. B 122. C 124. D 126.
1.8
The diagram below shows an ogive (cumulative frequency) for a sample of 400 items. 400 300 Cumulative frequency 0 K The point K on the X-axis represents the value X
A B C D
which 75% of the sample take. below which 75% of the sample values lie. which 25% of the sample take. above which 75% of the sample values lie.
For office use only Marks awarded (First marker) for each sub-question Marks awarded (Second marker) for each sub-question
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Total
1.6
1.7
1.8
May 2002
1.9 Sample 1: Sample 2: 2, 5, 5, 12 1, 3, 5, 8, 8
Which of the following statistics has the same value in both samples? A Arithmetic mean B Standard deviation C Median D Mode
1.10 A companys 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%.
1.11
Y 8 6 4 2 0
x x x x x x x x xx x x xx x x 4 8 12 X
On the basis of the scatter diagram above, which of the following equations would best represent the regression line of Y on X? A Y = X + 8 B Y=X+8 C Y=X8 D Y = X 8
TURN OVER For office use only Marks awarded (First marker) for each sub-question Marks awarded (Second marker) for each sub-question
May 2002 5
Total
1.9
1.10
1.11
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1.12 A sample of 10% of CIMA students is required. Which ONE of the following methods would provide the best simple random sample? A B C D Select every tenth CIMA student to arrive at their college/institute on one specific day. Select randomly, using random number tables, one in ten of every CIMA class. Select 10% of colleges/institutions providing CIMA courses, then from these choose all students who are registered with CIMA. Select 10% of all students registered with CIMA, giving each a chance of 0!1 of being picked.
1.13 Two groups of stock, K and L, are valued. The first group, K, is valued at 10,000 5% and the second group, L, is valued at 20,000 10%. The maximum percentage error in the combined (K + L) stock valuation of 30,000 is closest to A 7!5%. B 8!3%. C 10!0%. D 15!0%.
1.14 The sales of a product are recorded monthly for 24 months. The four-point (centred) moving averages are calculated and plotted on a graph. How many moving average points are plotted? A 20 B 21 C 22 D 24
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Total
1.12
1.13
1.14
May 2002
1.15 In a single throw of a pair of fair (six-sided) dice, what is the probability that the result is two numbers which sum to 7? A
1 12
The following data should be used for 1.16 and 1.17

In an internal audit of 200 invoices, the following numbers of errors were discovered: Number of errors: Number of invoices: 0 60 1 30 2 40 3 40 4 20 5 10 6 or more 0
1.16 The percentage of invoices with errors is A 30%. B 70%. C 80%. D none of these.
1.17 The expected value of the number of errors per invoice is A 1!8 B 2 C 2!1 D 3
May 2002 7
Total
1.15
1.16
1.17
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1.18 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%.
1.19 The following formula is used in the financial analysis of dividends: V R = +G P When the formula is rearranged, with P in terms of the other variables, P is equal to A R G V B
(R G)
V
V G R
(R G)
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Total
1.18
1.19
May 2002
1.20 The length of telephone calls to a Software Support line is approximately Normally distributed with a mean of 20 minutes and a standard deviation of 5 minutes. The percentage of calls lasting under 30 minutes is closest to A 2%. B 48%. C 83%. D 98%.
1.21 A fixed-interest $200,000 mortgage, with annual interest compounded at 6% each year, is to be repaid by 15 equal year-end repayments of $R. The annual repayment $R will be closest to A $14,133. B $20,593. C $31,954. D $83,400.
Total
1.20
1.21
TURN OVER
May 2002 9 FBSM
1.22 A companys security system is made up of three separate electronic alarms, which operate independently. The security system operates provided that at least one of the three alarms is working. The probability of an alarm failing at any time is 1 in 100. The probability of the security system failing is A 1 in 100. B 3 in 100. C 1 in 10,000. D 1 in 1,000,000.
1.23 You borrow 3,000 and pay 10% each year interest. Ignoring capital, if you pay this interest at the end of each year, what is the present value of the interest payable at the end of the third year? A
(310) x 300 x 3
(710) x 300
(1011)
x 300
(1110)
x 400
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Total
1.22
1.23
May 2002
1.24 A manufacturer supplies components in boxes of 10, stating that there is a (independent) chance of 10% of any one component being faulty. In a large batch, the percentage of boxes containing no faulty components will be closest to A 10%. B 35%. C 50%. D 90%.
1.25 A new lake is to be stocked with fish, according to the numbers in the table below. Type of fish Number of fish Annual % increase A 400 10 B 300 20 C 200 30 D 100 40
After one year, the percentage of fish of Type D in the lake will be closest to A 10%. B 12%. C 14%. D 20%.
(Total = 50 Marks)
End of Section A Section B starts overleaf

May 2002 11
Total
1.24
1.25
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SECTION B 50 MARKS ANSWER ALL THREE QUESTIONS

IMPORTANT MARKS ARE AWARDED FOR CORRECTLY COMPLETING THE SHADED BOXES WITH THE CORRECT ANSWER WHERE A MARK IS INDICATED IN THE RIGHT-HAND COLUMN. THERE ARE NO MARKS FOR COMPLETING THE MISSING FIGURES WHERE NO MARK IS INDICATED, BUT COMPLETING THESE WILL HELP YOU OBTAIN THE CORRECT ANSWERS. DO NOT WRITE IN THE MARGINS NOR IN THE COLUMNS FOR USE BY MARKERS.
Question Two In two years from now, some equipment in your company will need replacing. You estimate that 400,000 in cash, then, will be required to do this. Your company has three alternative options for achieving this sum. The rate of interest will be 3!5% per quarter over the next 2 years, in all three options. Interest will be compounded every quarter. Option (1) Option (2) Invest X now, so that the investment grows to 400,000 in two years. Put 25,000 into a Reserve Fund (RF1) every quarter, starting now (that is, 9 deposits are made), and borrow the shortfall (the amount by which the Reserve Fund (RF1) falls short of its target of 400,000). Put Y into a Reserve Fund (RF2) at the end of every quarter for two years, to achieve the target of 400,000 exactly.
Option (3)
A geometric series of n terms, with first term A and common ratio R, is denoted by: A + AR + AR + AR + AR + + AR . A (R n 1) The sum of this series is given by: Sn = (R 1) Do not write in these columns below
2 3 4 n-1
Required
Write your answers in the shaded boxes below
Marks available 2 2 4 1
For use by the second marker
For use by the first marker
(a) (b) (c) (d) (e) (f)
Calculate the value of X, to the nearest . Calculate the effective annual rate of interest, to 2 decimal places. Calculate the amount of money that will be in the Reserve Fund (RF1) after 2 years, to the nearest . Calculate the discount factor that you would use to find the present value of the shortfall in the Reserve Fund (RF1) to 4 decimal places. Calculate the present value of the shortfall in the Reserve Fund (RF1) implied by your answer to part (c), to the nearest 100. Calculate the value of Y, for the Reserve Fund (RF2), to the nearest .
4 sub-total: 15
Part (g) of Question Two is on page 13

FBSM 12 May 2002
Question Two continued Do not write in these columns below
Required (g)
Explain, in no more than 20 words, (in the shaded area below) the meaning of the term present value.
Marks available
2 Sub-total: 2
Space for workings and/or notes for Question Two
Total for Question Two = 17 Marks
TURN OVER
May 2002 13 FBSM
Question Three The unit sales of a toy for the last nine quarters are given below: Year Quarter Unit sales 2000 Q1 45 2001 Q1 85 2002 Q1 120
Q2 170
Q3 200
Q4 130
Q2 205
Q3 235
Q4 170
The (moving-average) trend in unit sales is approximately linear and described by the equation Sales = 110 + 10T where T = 1 denotes the first quarter, Q1, of 2000, T = 2 denotes the second quarter, Q2, of 2000, and so on. The unit sales of the toy over the last few years have been analysed in two different ways: firstly, using the additive model and, secondly, using the multiplicative model. The average seasonal variations for the two models are as follows: Quarter Additive model (units) Multiplicative model Q1 -80 -40% Q2 +40 +20% Q3 +60 +30% Q4 -20 -10% Do not write in these columns below
The underlying business conditions are not expected to change during the next two quarters.
Required
Marks available 1 1 Sub-total: 2
(a) (b)
Calculate the percentage increase in the total annual sales between 2000 and 2001, to 1 decimal place. Predict the trend value for the second quarter,Q2, of 2002.
Space for workings and/or notes for Question Three
Parts (c) to (f) of Question Three are on page 15

FBSM 14 May 2002
Question Three continued
Do not write in these columns below

For use by the second marker For use by the first marker
Required
Marks available 1 1 sub-total: 2 2 2 sub-total: 4
(c)
Using the additive model, calculate the forecasts for the second quarter, Q2, of 2002; AND the third quarter, Q3, of 2002.
(d)
Using the multiplicative model, calculate the forecasts for the second quarter, Q2, of 2002; AND the third quarter, Q3, of 2002.
(e)
Based on the sales information given, identify three features of the unit sales of this toy in no more than 20 words each (in the shaded areas below). 1
2 Sub-total: 6
(f)
Explain when it is appropriate to use a multiplicative model for forecasting in no more than 30 words (in the shaded area below).
2 Sub-total: 14
Total for Question Three = 16 Marks

TURN OVER
May 2002 15 FBSM
Question Four The mail-order sales (units) of Brand X in a certain country are shown below. In this country, the populations of all the twenty sub-groups are equal. Each customer buys one unit. Ages are given in years. Mail-order sales of Brand X (units) by region and age in 2001 Region\Age North South East West 21 29 100 55 65 20 30 39 80 50 60 30 40 49 50 45 65 40 50 59 40 30 60 50 60 + 30 20 50 60 Total 300 200 300 200
Space for workings and/or notes for Question Four
Required:
Marks available 1 1
(a) (b) (c) (d)
Calculate the arithmetic mean sales per sub-group Calculate the median sales per sub-group A customer is to be randomly selected for a holiday prize. What is the probability that this customer is from the East and over 39 years of age? A customer is to be randomly selected for a cash prize. Assuming that the winning of two prizes is allowed, what is the probability that this customer is from the North or under 40 years of age?
2 sub-total: 6
Parts (e) to (h) of Question Four are on page 17

FBSM 16 May 2002
Question Four continued

For use by the second marker For use by the first marker
Required:
Marks available
(e)
Without calculation, state the region with the largest standard deviation in sales (across age groups) and give a reason for your answer in no more than 20 words.
(f) (g)
For the North and South, what is the rank correlation coefficient between sales and age? A chain-base index number system for total sales was introduced in 1999 with a base figure of 100. If total sales have increased by 10% each year since then, what is the chain-base index number for total sales in 2001 (2000 = 100)? Identify three features shown by the sales data in the table in no more than 20 words each (in the shaded areas below). 1
(h)
2 Sub-total: 11
Total for Question Four = 17 Marks
End of Question Paper Maths Tables and Formulae are on pages 21 - 26

TURN OVER FOR ADDITIONAL SPACE FOR NOTES AND WORKINGS
May 2002 17 FBSM
You may use this sheet for workings (no marks are awarded for workings)
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DO NOT WRITE ON THIS SHEET
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3c
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Day 1 late afternoon
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28
May 2002
Foundation Level
3c
FBSM
18 November 2002 Day 1 late afternoon
THIS QUESTION PAPER BOOKLET IS ALSO YOUR ANSWER BOOKLET. Sufficient space has been provided for you to write your answers, and also for workings where questions require them. For section B questions, you must write your answers in the shaded space provided. Additional blank sheets (pages 16 19) are included if you require more space for notes or workings. Please note that you will NOT receive marks for your notes or workings. Do NOT remove any sheets from this booklet: cross through neatly any work that is not to be marked. Avoid the use of correction fluid. You are allowed two hours to answer this question paper. All questions are compulsory. Answer the ONE question in section A (this has 25 sub-questions and is on pages 2 9). Answer the THREE questions in section B (these are on pages 10 15). Maths Tables and Formulae wee provided within the question paper and are available elsewhere on the website. You are advised to spend 10 minutes reading through the paper before starting to answer the questions. You should spend no more than 55 minutes on answering the ONE question in section A, which has 25 subquestions. You should spend no more than 55 minutes on answering the THREE questions in section B. Hand this entire booklet to the invigilators at the end of the examination. You are NOT permitted to leave the examination hall with this booklet. Do NOT write your name or your student registration number anywhere on this booklet.

Each of the sub-questions numbered from 1.1 to 1.25 inclusive, given below, has only ONE correct answer. REQUIRED: Place a circle O around the letter A, B, C or D that gives the correct answer to each sub-question. If you wish to change your mind about an answer, block out your first answer completely and then circle another letter. You will NOT receive marks if more than one letter is circled. Please note that you will NOT receive marks for any workings to these sub-questions. Sufficient space has been provided for you to do your workings where these sub-questions require them. Question One 1.1 The expression a2x/y DS QH = Q 2 The formula above can be re-arranged so that Q equals A H 2DS
2
a 2x a 2y B
simplifies to a(x-y)/2 C a2(x-y) D a2(x+y)
A 1.2
2DS H
H 2DS
2DS H
1.3
The total profit, P, of an organisation is related to output (x units) by the expression: P = 40 + 11x 2x2 The organisation will break even (that is, P = 0) with an output of
25 units.
4 units.
55 units.
8 units.
Space for workings for sub-questions 1.1 to 1.3
FBSM
November 2002
1.4
3x + 2y = 6 x 2y = 2 The solution, in the form (x,y), to the above simultaneous equations is
(0,3)
(2,3)
(2,0)
(3,2)
Space for workings for sub-question 1.4

The following time series represents the weekly sales (000) of a particular product: Week 1 2 3 4 5 6 1.5 A Sales 000 200 240 250 220 230 260
The 2nd four-point centred moving average for the sales data will be 2355 B 2375 C 2395 D none of these.
1.6 A
Assuming an additive model, and based on the information given, the seasonally-adjusted sales figure (000) for week 4 will be 2375 B 2225 C 2200 D 2025
Space for workings for sub-questions 1.5 and 1.6
November 2002
FBSM

The numbers of houses sold by an estate agent in the last 8 weeks were: 4, 3, 2, 0, 0, 10, 1, 4 1.7 A The median number of houses sold per week was 0 B 25 C 30 D 50
1.8 A
The arithmetic mean number of houses sold per week was 0 B 25 C 30 D 50
1.9
The following information shows the daily sales revenue (000) of a company producing a particular item of clothing, over a period of two years: Sales 000 0 to under 10 10 to under 20 20 to under 30 30 to under 40 40 to under 50 The expected daily sales (in 000) is Frequency % 5 20 60 10 5
22
24
26
none of these.
FBSM
November 2002
1.10 A
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 8 ( 4) B 8 ( 3) C 8 ( 2) D 8 ( 1)
1.11
In order to carry out a survey into the spending habits of the population living in a certain region of the United Kingdom, a sample of individuals is to be selected. The population can be categorised according to age group ("under 18", "18 to under 30", "30 to under 60", "60 and above"). The sample will consist of 05% of the membership of each age group. This method of sampling is an example of stratified. B quota. C systematic. D random.
1.12
For a set of six pairs of observations for the variables X (number of employees in hundreds) and Y (product sales in thousands of units), the following results were obtained: X = 1 Y = 15 X2 = 15 Y2 = 65 XY = 7
The correlation coefficient is nearest to A 022 B 047 C 090 D - 032
November 2002
FBSM

The following table shows the index of prices (1995 = 100) for a certain commodity over the period 1995 2000: 1995 100 1.13 A 1996 105 1997 115 1998 127 1999 140 2000 152
The percentage increase in the price between 1997 and 1999 is nearest to 250 B 223 C 217 D none of these.
1.14 A
It has been decided to rebase the index so that 1998 = 100. The index for 2000 will now be nearest to 1931 B 1394 C 1250 D 1197
FBSM
November 2002
The following data should be used for 1.15 to 1.17

The total overtime cost of a small company varies from week to week, and is found to be Normally distributed with a mean of 800 and a standard deviation of 200. 1.15 A 1.16 A 1.17 A In any given week, the probability that the overtime cost will exceed 1,000 is 01587 B 03413 C 08413 D none of these.
In any given week, the probability that the overtime cost will be between 700 and 900 is 03035 B 06170 C 03830 D none of these.
In 10% of weeks, the overtime cost will approximately fall below 366 B 455 C 544 D 633
November 2002
FBSM

2,000 is invested in a bank account. The account earns compound interest at 5% per year. 1.18 A 1.19 A The cash value of the account, to the nearest , at the end of five years will be 2,680 B 2,553 C 2,431 D 2,335
The investment will have almost doubled in value after 11 years. B 12 years. C 13 years. D 14 years.
1.20
An individual who expects to retire in five years' time, estimates that his company pension will be 15,000 per year. Each year's pension will be paid as a lump sum at the end of the year. If current interest rates are 6%, then the present value of the first year's pension, to the nearest 5, will be 10,575 B 10,975 C 11,190 D 11,205
1.21 A
A credit card company states that its nominal annual interest rate is 18%. If interest is charged monthly at 15%, then the annual percentage rate (APR), correct to 2 decimal places, will be 1956%. B 1925%. C 1881%. D none of these.
FBSM
November 2002
The following data should be used for 1.22 to 1.25

Two components, A and B, operate independently as part of a computer system. The probabilities that A and B will work correctly are 09 and 08 respectively. 1.22 A The probability that both components will work correctly is 081 B 072 C 028 D 017
1.23 A
The probability that both components will not work correctly is 002 B 003 C 03 D none of these.
1.24 A
The probability that only one component will work correctly is 098 B 081 C 074 D 026
1.25 A
The probability that at least one component will work correctly is 064 B 081 C 098 D none of these.
Total = 50 Marks
November 2002
FBSM

IMPORTANT MARKS ARE AWARDED FOR CORRECTLY COMPLETING THE SHADED BOXES WITH THE CORRECT ANSWER WHERE A MARK IS INDICATED IN THE RIGHT-HAND COLUMN. THERE ARE NO MARKS FOR COMPLETING THE MISSING FIGURES WHERE NO MARK IS INDICATED, BUT COMPLETING THESE WILL HELP YOU OBTAIN THE CORRECT ANSWERS. DO NOT WRITE IN THE MARGINS NOR IN THE COLUMNS FOR USE BY MARKERS. ADDITIONAL SPACE FOR WORKINGS OR NOTES IS AVAILABLE ON PAGES 16 19. Question Two At the close of business on the last working day of each month, the Manager of a branch of a bank requires his staff to produce a brief summary of the account balances. These monthly figures are intended to form the basis of the Manager's quarterly report which is then used by the head office for planning purposes. To provide this information, the accounts of a randomly selected sample of 100 customers are examined. The details for one month are shown in the table below. Account balance 000 0 to less than 2 2 to less than 4 4 to less than 6 6 to 8 Total () Class mid-point x 1 3 5 7 Class frequency f 10 40 30 20 100 fx fx2
420
2,100 Do not write in these columns below

Marks available For use by first marker For use by second marker
Required:
Write your answers in the shaded boxes below:
(a) Fill in the appropriate numerical value as indicated by the letters in the
table above: A B
2 2
(b) The arithmetic mean of the account balances is (c) The standard deviation of the account balances is
2 2 sub-total: 8
Space for workings
FBSM
10
November 2002
Required: (d) Answer the questions below:

(i)
From the data given in the table on the previous page, construct a cumulative "less than" frequency ogive. Summary of the end-of-day account balances
100 90 Cumulative Frequency 80 70 60 50 40 30 20 10 0
0

Account balance (000)
(ii) (iii)
The median of the account balances is The semi-interquartile range of the account balances is Giving your reasons, explain whether the mean and standard deviation, or the median and semi-interquartile range, would be the most appropriate summary measures for this set of data. (Do not exceed 50 words)
2 2
(e)
sub-total: 9
Total Marks for Question Two =
17
Space for workings (additional space for workings is available on pages 16 19)
November 2002
11
FBSM
Question Three The Production Manager of a large manufacturing company is concerned about the apparent increasing maintenance costs of the production machinery. There is a feeling that there may be a relationship between the ages of the individual machines and their annual maintenance costs. In order to examine this theory in more detail, the following information has been collected for a randomly selected sample of 8 machines currently in operation: Machine Age in years (X) Maintenance costs (000) (Y) X = 41 Y = 66 A 2 3 B 5 8 C 8 12 D 2 5 E 3 7 F 7 10 G 4 8 H 10 13 XY = 405 Do not write in these columns below
X2 = 271
Y2 = 624
Required: (a)
Plot a scatter diagram of the above data.
Marks available
For use by first marker
For use by second marker
Scatter Diagram
14 13 12 11 10 9 8 7 6 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8 9 10 11 Age (years)
Maintenance costs (000)
Required: Write your answers in the shaded boxes below: (b)

(i)
1
Describe two important features that are evident from the scatter diagram. (Do not exceed 20 words for each.)
(ii)
1
sub-total: 4 FBSM 12 November 2002
Required:
Write your answers in the shaded boxes below:

(c)
Calculate the least-squares regression line of maintenance costs (000) on machine age (years) in the form Y = a + bX. a= b=
3 2
(d)
a:
In relation to this particular situation, explain the meanings of a and b in the formula above. (Do not exceed 20 words each.)
b:
2
(e)
A similar sample, in terms of age range of machines, was selected at one of the company's other factories, yielding the least-squares regression line: Y = 3 + 15X Forecast the annual maintenance costs that would be expected for a 12-year old machine. Comment on the reliability of your forecast. (Do not exceed 30 words.)
2
(i)
(ii)
sub-total: 13
Total Marks for Question Three =
17
Space for workings (additional space for workings is available on pages 16 19)
November 2002
13
FBSM
Question Four
(a) A company borrowed 50,000 to buy some new equipment. Interest on this loan is compounded annually at 9%. The company is required to pay off the loan by making a single payment after five years.
In order to have the cash available to make this payment, it has decided that annual payments will be made into a sinking fund that compounds interest annually at 5%. The first payment into the fund will be made one year after the loan was taken out, and the last payment will be made on the day the loan is repaid. The table below shows how the debt and sinking fund will grow during the five years: LOAN Interest Outstanding charged () debt () A C B Do not write in these columns below
Year end 1 2 3 4 5
Interest earned () 0
SINKING FUND Payment Amount in fund () () 13,92261 13,92261 D
Required:
Write your answers in the shaded boxes below: Calculate the appropriate numerical value to go in the space indicated by the letters in the table above: A B C D
2 2 3 3 sub-total: 10
Space for workings for question four (a)
FBSM
14
November 2002
(b)
The Manager of a sports centre has forecast that the sports centre will need 80,000 in cash in four years' time so that it can buy some new equipment. In order to have the necessary cash available at that date, the Manager has decided to put X every quarter into a sinking fund. The payments will start immediately (and therefore 17 payments will be made). Interest on the fund will be compounded at 35% per quarter. Do not write in these columns below
Marks available 4 For use by first marker For use by second marker
Required:
Write your answers in the shaded box below.
(i)
Calculate the value of X (that is, the quarterly payment into the fund). interest rate of 35% per quarter)?
(ii) What is the present value of the 80,000 (assuming an
2 sub-total: 6
Total Marks for Question Four =
16
Note:
A geometric series of n terms, with first term A and common ratio R, is denoted by: A + AR + AR2 + AR3 + + ARn 1 The sum of this series is given by: Sn = A(R 1) (R 1)
n
Space for workings for question four (b)
End of Question Paper
November 2002
15
FBSM

Write here your full examination number Centre Code: Hall Code: Desk Number:
Foundation Level
3c
FBSM
19 May 2003 Monday late afternoon
THIS QUESTION PAPER BOOKLET IS ALSO YOUR ANSWER BOOKLET. Sufficient space has been provided for you to write your answers and also for workings where questions require them. For section B questions, you must write your answers in the shaded space provided. Please note that you will NOT receive marks for your notes or workings. Do not exceed the stated number of words. Do NOT remove any sheets from this booklet: cross through neatly any work that is not to be marked. Avoid the use of correction fluid. You are allowed two hours to answer this question paper. All questions are compulsory. Answer the ONE question in section A (this has 25 sub-questions and is on pages 2-13) Answer the THREE questions in section B (these are on pages 14-20) Maths Tables and Formulae were provided with the printed question paper, and are available elsewhere on the website You are advised to spend 10 minutes reading through the paper before starting to answer the questions. You should spend no more than 55 minutes on answering the ONE question in section A, which has 25 sub-questions. You should spend no more than 55 minutes on answering the THREE questions in section B. Hand this entire booklet to the invigilators at the end of the examination. You are NOT permitted to leave the examination hall with this booklet. Do NOT write your name or your student registration number anywhere on this booklet.

Each of the sub-questions numbered from 1.1 to 1.25 inclusive, given below, has only ONE correct answer. REQUIRED: Place a circle O around the letter A, B, C or D that gives the correct answer to each sub-question. If you wish to change your mind about an answer, block out your first answer completely and then circle another letter. You will NOT receive marks if more than one letter is circled. Please note that you will NOT receive marks for any workings to these sub-questions. Sufficient space has been provided for you to do your workings where these sub-questions require them.
Question One
The following information is required for sub-questions 1.1 and 1.2

The Economic Order Quantity (EOQ) for a particular stock item is given by the expression: EOQ =
2C oD Ch
1.1
If Co = 2 per order, D = 1,000 items and Ch = 0 25 per item, then EOQ (rounded to the nearest whole number) will be 400 B 320 C 160 D 126
1.2
If, for a different stock item, EOQ = 200 items, Co = 4 per order and D = 1,000 items, then Ch (in per item) will be 005 B 010 C 015 D 020
FBSM
May 2003
1.3
If the demand for a particular product is x (hundred units per week), then the weekly profit (P) is given by the expression P = 30 + 4x 2x
2
The break-even demand (that is when P = 0) will be A B C D 500 units per week. 400 units per week. 300 units per week. 200 units per week.
1.4
The production costs per unit of a certain commodity are 20 ( 2) and the selling price per unit is 35 ( 3). In any given week, the sales are 90 ( 10) units. On the basis of this information, the maximum profit per week is 1,000 B 1,600 C 1,800 D 2,000

On a particular day, a companys finance department received 20 invoices, of which 3 contained errors.
1.5
If two of the invoices are selected at random, then the probability (correct to 2 decimal places) that neither of them will contain an error is 072 B 063 C 042 D 040
1.6
If two of the invoices are selected at random, then the probability (correct to 2 decimal places) that at least one of them will contain an error is 060 B 058 C 036 D 028
May 2003
FBSM

The following frequency distribution shows the number of days of absence due to sickness, during the last year, of a randomly selected sample of 50 employees of a large manufacturing company. Days of absence 02 35 69 10 12 13 15 More than 15 Number of employees 15 10 9 8 6 2
1.7 A
The median number of days of absence due to sickness per employee will be nearest to 3 days. B 4 days. C 5 days. D 6 days.
1.8 A
If the upper quartile is 11 days, and the lower quartile is 1 day, then the quartile deviation will be 12 days. B 10 days. C 6 days. D 5 days.
1.9
In the current financial year, an employees net income is 15,360, after total deductions of 40% from her gross income. In the last financial year, her gross income was 23,400. In percentage terms, the increase in her gross income is 94% B 86% C 75% D 67%
1.10 The following table of index numbers shows how the production of a particular model of motorboat at a boat builders has changed over the period August 2002 to February 2003, with January 2002 = 100: Aug Production index 110 Sep 119 Oct 115 Nov 108 Dec 102 Jan 98 Feb 95
If the actual production figure for August was 140 motorboats, then the number of motorboats produced in February 2003 was closest to A 105 B 121 C 133 D 162
FBSM
May 2003
1.11 The following table shows the price of a certain commodity over the years 1998 to 2001: Year Price() 1998 270 1999 311 2000 342 2001 383
If a chain-based index is used, the price index number for 2000 will be closest to A 110 B 117 C 120 D 127
1.12 A broker has estimated the profits or losses for a particular investment and their respective probabilities as follows: Profit(000) Probability -1 01 1 03 3 04 5 02
The expected profit (000) on this investment will be A 21 B 22 C 23 D 24
1.13 The Personnel Department of a large manufacturing company wishes to measure the correlation between the performance of its employees on an aptitude test, and their ability to carry out a specific work-related task. The following table shows the rankings of 7 employees at both the test and the task: Employee Test Rank Task Rank A 2 2 B 5 6 C 7 7 D 4 4 E 1 3 F 6 5 G 3 1
Spearmans rank correlation coefficient for this data is A 062 B 072 C 082 D 092
May 2003
FBSM

A company uses regression analysis to examine the relationship between its total weekly costs (C) and its weekly production level (P units). The following model was found to be a suitable description of this relationship: C = 1500 + 300P
1.14 If, in a particular week, the production level is 500 units, then the predicted costs will be A 150,000 B 150,300 C 151,000 D 151,500
1.15 The average variable cost per unit is estimated as A 300 B 1,500 C 1,800 D 3,030
1.16 A graphical presentation of classified data in which the number of items in each class is represented by the area of the bar is called A B C D an ogive. a histogram. a bar chart. a compound bar chart.
1.17 A pie chart is to be drawn to represent the following data, which shows the breakdown by department of the number of employees working on a particular project: Department Marketing Finance Personnel Sales Number of Employees 7 5 8 10
The angle of the sector (slice), in degrees, of the pie chart representing Finance will be A 30 B 45 C 60 D 90
1.18 A survey is to be carried out into the spending habits of the population of a large town in the North East of England. It has been decided that five small areas are to be randomly chosen, two close to the town centre and three in more outlying areas. In these areas, ten interviewers are each required to interview a randomly selected sample of 30 people. This system of sampling is an example of A multi stage. B cluster. C quota. D stratified.
FBSM
May 2003
1.19 On one particular checkout in a supermarket, the service times in minutes of five customers were: 3, 2, 1, 5, 4 The standard deviation of these service times, correct to 1 decimal place, is closest to A 35 minutes B 20 minutes C 15 minutes D 10 minutes
1.20 At a second checkout in the same supermarket as in sub-question 1.19, the service time has an arithmetic mean of 5 minutes and a standard deviation of 1 minute. The coefficient of variation will be A 50% B 20% C 5% D 2%
1.21 The underlying trend in the demand for a particular product is constant (flat), and is subject to quarterly seasonal variations as follows: Quarter Seasonality Q1 +50% Q2 +50% Q3 -50% Q4 -50%
Assume a multiplicative model is appropriate. If the demand for the last quarter, Q2, was 240 units, then the forecasted demand for the next quarter, Q3, is A 80 units. B 100 units. C 120 units. D 140 units.
1.22 A bank offers investors a nominal annual interest rate of 4% with interest paid quarterly. The effective annual rate of interest is A 406% B 404% C 402% D 401%
1.23 If 10,000 is invested now, at an interest rate of 6% compounded annually, then after 5 years the value of the investment will be closest to A 13,226 B 13,382 C 13,562 D 13,598
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FBSM
1.24 A company pays rent of 50,000, annually in advance, on a building for a period of 5 years. The annual interest rate is 10%. The total present value of the rental repayments will be closest to A 212,650 B 210,800 C 208,500 D 189,550
1.25 An annuity requires the deposit of 100 per year for 5 years. The deposits are made at the beginning of each year and earn interest at 8% per year. At the end of the 5 years, the investment will be worth closest to A 633 B 645 C 654 D 660
(Total = 50 Marks)
End of Section A
FBSM
May 2003

IMPORTANT MARKS ARE AWARDED FOR COMPLETING THE SHADED BOXES WITH THE CORRECT ANSWER WHERE A MARK IS INDICATED IN THE RIGHT-HAND COLUMN. THERE ARE NO MARKS FOR COMPLETING THE MISSING FIGURES WHERE NO MARK IS INDICATED, BUT COMPLETING THESE WILL HELP YOU OBTAIN THE CORRECT ANSWERS. DO NOT WRITE IN THE MARGINS NOR IN THE COLUMNS FOR USE BY MARKERS.
Question Two
As part of its expansion plans, a large financial services organisation is examining the feasibility of updating and expanding its IT facilities. One proposal is the purchase of a new server costing 7,500. This would reduce the operating costs over the next five years as shown below: End of year Net cash savings 1 1,000 2 2,000 3 3,000 4 3,000 5 2,000
It is anticipated that the cost of capital to the organisation will be 10% per year over this period. Do not write in these columns below
Required:
For use by the Marks second available marker
(a) Complete the table by calculating the appropriate numerical values

for the spaces indicated by the letters A - E: Net cash flow Discount factor Year end Now 1 2 3 4 5 Net Present Value (7,500) 1,000 2,000 3,000 3,000 2,000 C D E sub-total: 1 /2 each 2 7
1
Present value B 1 each
May 2003
FBSM
Question Two continued

Required: (b) Explain, in the shaded area below, what is meant by the term
internal rate of return (IRR).
For use by the Marks second available marker
Maximum of 20 words
(c) Calculate the approximate internal rate of return (IRR) of the above
project, correct to the nearest whole percentage point. 4
(d) On the basis of your calculations, explain, in the shaded area below,
whether or not you would recommend the purchase of the server.
Maximum of 30 words
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10
May 2003
Question Three
A large manufacturing company, with factories throughout Europe, employs a large force of travelling salespeople. Records show that for salespeople in the UK, the weekly distance travelled per person is approximately Normally distributed with a mean of 1,000 kilometres and a standard deviation of 300 kilometres. The companys Head of Marketing and Sales thinks that salespeople who travel more than 750 kilometres per week should be eligible for a luxury company car. Do not write in these columns below
For use by the Marks second available marker For use by the first marker
Required:
Write your answers in the shaded areas below
(a) The stages in the calculation of the probability that a particular
salesperson in the UK is eligible for a luxury car are shown below. You are required to state the numerical values indicated by the letters A, B and C. Give your answers correct to 2 decimal places. (Note: Z denotes the standard normal variable) P (salesperson is eligible for a luxury car) = P (weekly distance travelled > A) = P (Z > B) A B C 1 2 3
=C (b) The company intends to introduce an incentive scheme in the UK which would give an additional payment of 1,000 to each of the 10% of salespeople who travel the greatest distances.
Calculate the numerical values indicated by the letters in the following calculations, giving your answers correct to 2 decimal places. From the Normal Tables, the Z-value, which is exceeded by 10% of Normal values, is D Salespeople travelling more than E per week should be paid the additional 1,000. . kilometres 2 3
(c) In France, where 200 salespeople are employed, the mean distance
travelled is 1,000 kilometres per week, but there is less variability in the weekly distances. The standard deviation is estimated as 200 kilometres. Calculate the number of salespeople in France who travel (i) less than 1,250 kilometres per week 2 (ii) between 750 kilometres and 1,250 kilometres per week 3
May 2003
11
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Question Four
A newspaper publisher is promoting the sales of a new local daily newspaper. The following table shows the daily sales of the newspaper over a recent three-week period: Day Monday Tuesday Wednesday Thursday Friday Monday Tuesday Wednesday Thursday Friday Monday Tuesday Wednesday Thursday Friday Sales (00s) 27 41 45 53 65 30 42 50 57 66 34 48 53 59 72

For use by the Marks second available marker For use by the first marker
Required:
(a) Plot the above time series data using the following axes:
Sales of newspaper
80 70 60
Sales, 00s 40 per day 30

20 10 0 M T W Th F M T W Th F M T W Th F
50
Day
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May 2003

Required:
For use by the second Marks available marker
(b) State two features of the time series shown by the graph.
(1) Maximum of 15 words (2) Maximum of 15 words 1 1
(c) The following table shows the stages in the calculation of the 5-day
moving average trend line. State which values would arise at A, B and C. * indicates the cell is blank Day Monday Tuesday Wednesday Thursday Friday Monday Tuesday Wednesday Thursday Friday Monday Tuesday Wednesday Thursday Friday Sales (00s) (Y) 27 41 45 53 65 30 42 50 57 66 34 48 53 59 72 sub-total: 8 234 235 240 244 245 249 255 258 260 266 51 00 51 60 52 00 53 20 A * 46 80 47 00 48 00 48 80 49 00 B * 620 18 00 -18 00 -6.80 100 7.20 15 00 C -4 00 -0 20 2 2 2 5-day moving total 5-day moving average (T) Trend (Y T)
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Required:
For use by the second Marks available marker
(d) Explain the purpose of the moving average calculation and why, in
this case, it is based on a 5-day period.
maximum of 20 words
(e) Using the available data in the table in requirement (c) and assuming
an additive model, calculate the seasonal component for Monday, giving your answer correct to two decimal places. 2
(f) For the Tuesday of next week the trend forecast for the sales is 6,600
newspapers. What is the forecast for the overall sales for that day? 3 sub-total: 7
End of Question Paper
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May 2003

Write your full examination number, your contact ID and your name on a double-sided card, which must be attached to this booklet here.
Foundation Level
3c
FBSM
17 November 2003 Monday late afternoon
THIS QUESTION PAPER BOOKLET IS ALSO YOUR ANSWER BOOKLET. Sufficient space has been provided for you to write your answers and also for workings where questions require them. For section B questions, you must write your answers in the shaded space provided. Please note that you will NOT receive marks for your notes or workings. Do not exceed the stated number of words. Do NOT remove any sheets from this booklet: cross through neatly any work that is not to be marked. Avoid the use of correction fluid. You are allowed two hours to answer this question paper. All questions are compulsory. Answer the ONE question in section A (this has 25 sub-questions and is on pages 2 12) Answer the THREE questions in section B (these are on pages 14 21) Maths Tables and Formulae are provided on pages 22 27 You are advised to spend 10 minutes reading through the paper before starting to answer the questions. You should spend no more than 55 minutes on answering the ONE question in section A, which has 25 sub-questions. You should spend no more than 55 minutes on answering the THREE questions in section B. Hand this entire booklet to the invigilators at the end of the examination. You are NOT permitted to leave the examination hall with this booklet. Do NOT write your name or your contact ID anywhere on this booklet. TURN OVER
For office use only

Marks awarded (First marker) for each question Marks awarded (Second marker) for each question
Total
One
Two
Three
Four

Each of the sub-questions numbered from 1.1 to 1.25 inclusive, given below, has only ONE correct answer.
REQUIRED:
Place a circle "O" around the letter A, B, C or D that gives the correct answer to each sub-question. If you wish to change your mind about an answer, block out your first answer completely and then circle another letter. You will NOT receive marks if more than one letter is circled. Please note that you will NOT receive marks for any workings to these sub-questions. Sufficient space has been provided for you to do your workings where these sub-questions require them.
Question One
1.1 A large department store wishes to carry out a survey by issuing a questionnaire to a sample of 100 of its 2,000 account holders. The sample is to be selected as follows: Each customer will be allocated a number from 1 to 2000. A table of random numbers from 1 to 20 will then be used to select the first member of the sample. Every succeeding 20th member of the population of account holders will then be selected. This form of sampling is called A stratified. B multi-stage. C systematic. D quota.
For office use only

Total
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1.2
The yearly sales of a particular product from three factories are represented by the following diagram:
Yearly Sales
8000 7000 6000 5000 4000 3000 2000 1000 0 2000
This diagram is an example of A B C D a Histogram. a multiple Bar Chart. a Component Bar Chart. an Ogive.
$000
Factory C Factory B Factory A
2001
2002
1.3
The solution to the simultaneous equations: 4x + 3y = 26 2x - y = 8 in the form (x,y) is
(2, 5)
(-5, 2)
(-2, 5)
(5, 2)
TURN OVER
For office use only

Total
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1.3
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1.4
20 18 16 14 12 10 8 6 4 2 0 0 2 4 6 8 10 x x x X x xx x x x x x x x x x Y x x
Which of the following equations best represents the above scatter diagram: A Y = 2X + 3 B Y = 3X + 2 C Y = 3X - 2 D Y = 2 - 3X
1.5
A customer paid $230 for a television which had been reduced by 15%. The original price of the television before the price reduction was closest to $243. B $265. C $271. D $276.
For office use only

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November 2003
1.6 A B C D
If the rank correlation coefficient between the performances of two groups of fifteen people performing the same task was -01, which ONE of the following statements is true? There is perfect agreement between the performances of the two groups. There is moderate agreement between the performances of the two groups. There is no agreement between the performances of the two groups. This is an impossible result.
1.7
Since 1995, the average annual salaries for a group of workers have been index-linked to prices. The table below shows the price index since 1997: (1995 = 100) Year Price Index 1997 112 1998 118 1999 122 2000 125 2001 127 2002 130
If the average salaries were $30,000 in 1997, then the average salaries of the workers in 2002 would have been closest to A $31,800. B $33,600. C $34,821. D $36,000.
TURN OVER
For office use only

November 2003 5
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1.7
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1.8
A toy manufacturer sells 3 ranges of toys. The following table shows sales information for the last two years: Quantity (000 units) Range: A B C Price ($/unit) 10 15 30 2001 30 50 10 2002 40 70 15
A relatives quantity index, to the nearest whole number, for the year 2002, with 2001 as the base year, will be A 144 B 141 C 139 D 69
1.9
The sum, S, of the first n terms of a geometric series with first term a and common ratio r, is given by the formula: a(r n 1) S= (r 1)
The sum of the first 8 terms of a geometric series with common ratio 3 is 19,680. The first term of this series is A 7 B 6 C 5 D 4
For office use only

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Total
1.8
1.9
November 2003
The following data are to be used to answer questions 1.10 and 1.11 below.
A cell phone retailer conducts a survey of 200 cell phone purchasers, and obtains the following results relating to their ages in years: Age Male Female Under 25 40 60 25 to 50 30 20 Over 50 40 10
1.10 The probability that a randomly selected purchaser is male and aged 50 or under is A 015 B 027 C 035 D 064
1.11 If the selected purchaser is female, the probability that she is aged 25 to 50 is A 010 B 022 C 025 D 035
Space for workings to 1.10 and 1.11
1.12 The following table shows the number of cars of a particular model sold by a dealer over the last five weeks: Week Cars sold 1 8 2 3 3 7 4 9 5 4
The expected number of cars of this model to be sold in the year (50 weeks) is A 300 B 310 C 325 D 350
TURN OVER
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November 2003 7
Total
1.10
1.11
1.12
FBSM
1.13 A car insurance company estimates that in a given year, each policyholder will make a "small" claim of $500 with a probability of 01, a "moderate" claim of $1,000 with a probability of 005, or a "large" claim of $2,000 with a probability of 001. In order to break even, between premiums taken in and claims paid out, the company should set the annual premium for each policy at A $100. B $120. C $140. D $160.
The following data are to be used to answer questions 1.14 to 1.16 below.
Flights arriving at an airport are subject to delays. The length of the delays is normally distributed with a mean of 20 minutes and a standard deviation of 8 minutes. 1.14 The probability that a flight will be delayed by less than 10 minutes is nearest to A 0894 B 0494 C 0250 D 0106
1.15 The probability that a flight will be delayed by between 15 and 25 minutes is nearest to A 0268 B 0465 C 0535 D 0732
1.16 Approximately 20% of the flight delays are less than A 11 minutes B 13 minutes C 15 minutes D 17 minutes
Space for workings to 1.14 to 1.16
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1.13
1.14
1.15
1.16
November 2003
The records of a supplier of an automobile part show that the quarterly demand over the past three years was as follows: Quarter Demand (000 units) 2000 1 142 2 54 3 162 4 206 2001 1 130 2 50 3 174 4 198 2002 1 126 2 42 3 162 4 186
1.17 Using a 4-point centred moving average, the trend component of the demand (000 units) for Quarter 4 of the year 2000 will be closest to A 206. B 166. C 160. D 138.
1.18 If an additive model is assumed, and the seasonal components of the demand for quarters 2,3 and 4 are -88, 30 and 66 respectively, the seasonal component of the demand (000 units) for Quarter 1 will be A 8 0 B -80 C 2 7 D -27
1.19 A small manufacturing company owns two machines, A and B. Machine A is valued at $15,000 10%, and machine B is valued at $25,000 5%. The maximum percentage error in the combined value of the two machines is closest to A 70% B 75% C 100% D 150%
TURN OVER
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1.18
1.19
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1.20 Which ONE of the following statements regarding sample measures is INCORRECT? A B C D The arithmetic mean is always distorted by extreme values. The median will not be distorted by extreme values. The mode can be distorted by extreme values. The standard deviation can be distorted by extreme values.
$20,000 is invested at an interest rate of 4%, which is compounded annually. 1.21 After 10 years, the investment will have a value, to the nearest $, of A $23,798. B $25,408. C $27,398. D $29,605.
1.22 The investment will have approximately doubled after A 18 years. B 20 years. C 22 years. D 25 years.
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1.21
1.22
November 2003
1.23 An individual has taken out a mortgage of $150,000, at a fixed interest rate of 5% per annum over 20 years. Repayments will commence one year after the mortgage is taken out. The annual repayments will be closest to A $12,276. B $12,036. C $11,796. D $11,076.
1.24 If the annual rate of interest is 475%, the amount (to the nearest $) that should be invested now in order to receive $5,000 per annum in perpetuity, with receipts starting one year from now, is A $100,653. B $102,365. C $103,526. D $105,263.
TURN OVER
For office use only

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Total
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1.24
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1.25 An item of machinery that was purchased 5 years ago for $100,000 now has a value of $50,000. Assuming the reducing balance method of calculation, the annual rate of depreciation to the nearest whole percentage point will be A 17%. B 15%. C 13%. D 11%.
(Total for Question One= 50 Marks)
End of Section A
For office use only

Total
1.25
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November 2003
Section B starts on the next page
TURN OVER
November 2003 13 FBSM

IMPORTANT MARKS ARE AWARDED FOR COMPLETING THE SHADED BOXES WITH THE CORRECT ANSWER WHERE A MARK IS INDICATED IN THE RIGHT-HAND COLUMN. THERE ARE NO MARKS FOR COMPLETING THE MISSING FIGURES WHERE NO MARK IS INDICATED, BUT COMPLETING THESE WILL HELP YOU OBTAIN THE CORRECT ANSWERS. DO NOT WRITE IN THE MARGINS NOR IN THE COLUMNS FOR USE BY MARKERS.
Question Two
Because of an increasing population, the executive committee of a local community centre is planning to build an extension to its main building. In order to fund this building project, the centre will need to have $300,000 available at the beginning of January 2005. To achieve this, the centre intends to make 8 equal quarterly instalments of $X into a sinking fund which pays a quarterly compound interest rate of 1%. The first of the instalments was paid at the beginning of April 2003. Do not write in these columns below
Required:
Write your answers to (a) and (b) in the shaded boxes below
Marks available
(a) Calculate the annual effective interest rate. (b) Calculate the value of the quarterly instalments, $X.
Sub-total: Note:
2 4 6
The sum of the first n terms of a geometric series with first term A and common ratio R, is: Sn = Space for workings for question two A(R n 1) (R 1)
Question Two continues on the next page

FBSM 14 November 2003
Question Two continued

The executive committee has estimated that the project will take one year to complete, and will be ready for use in January 2006. The increased cash flows that will be generated by the centres extended facilities and fundraising activities during the construction period have been estimated to be $50,000 for each of the first five years, and then $30,000 for each of the next five years. Do not write in these columns below
Required:
Write your answers to parts (c) to (e) in the shaded boxes below
Marks available
(c) The following table shows the calculations necessary to evaluate the Net
Present Value (NPV) of the project, assuming a constant discount rate of 5% per year. Complete the table by replacing the letters with the appropriate numerical values: Cash flow Discount Present Year ($) factor value ($) 2005 = 0 1 2 3 4 5 6 7 8 9 10 (300,000) 50,000 50,000 50,000 50,000 50,000 30,000 30,000 30,000 30,000 30,000 B 2 A 2
NPV 18,290 (d) An alternative way of calculating the NPV would have been to use the following formula: NPV = -300,000 + (50,000 x C) + 30,000 x (D - C) The values that should be inserted for C and D are: C D 2 2
(e) Comment on the NPV of the project.
maximum of 20 words
(Total for Question Two = 16 Marks)
Question Three starts on the next page

TURN OVER
Question Three
Airport Catering Ltd provides catering services at airports throughout Europe. Each month, the Sales Manager is required to produce a statistical report that summarises the companys performance. The table below shows October's sales figures ($000) at 50 of its branches: Sales ($000) Less than 30 30 < 60 60 < 90 90 < 120 120 < 150 150 < 180 180 < 210 210 < 240 Total Frequency 3 5 7 9 11 8 5 2 50 Do not write in these columns below
Required:
Write your answers to part (a) in the shaded boxes below
Marks available
(a) The following table shows the workings leading to the calculation of
the mean and standard deviation of Octobers sales. Calculate the numerical values that would occupy the spaces in the table shown as A, B and C. Class MidSales Frequency f.x f.x2 point ($000) (f) (x) < 30 3 30 < 60 60 < 90 90 < 120 120 < 150 150 < 180 180 < 210 210 < 240 Total 5 7 9 11 8 5 2 50 5,970 859,050 2 2 Sub-total: 10 A B C 2 2 2
(b) For October, calculate

(i) The mean sales ($000) (ii) The standard deviation of the monthly sales ($000)
Question Three continues on the next page
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November 2003

For use by the first marker For use by the second marker
Required:
Write your answer to part (c) in the shaded box below
Marks available
(c) For September, the mean and standard deviation of the monthly
sales figures were $120,100 and $34,450 respectively. Compare the two months sales figures.
maximum of 30 words (d) Use the following axes to draw an ogive for Octobers sales figures:
AIRPORT CATERING Ltd

100 90 80 70 60 50 40 30 20 10 0
30
60
90
120
150
180
210
240
SALES($000)
3 sub-total: Space for workings to question three 5
Question Three continues on the next page

TURN OVER

Required:
Write your answer to part (e) in the shaded box below
Marks available
(e) The company operates a bonus scheme under which each one of the
10 branches with the highest sales is given a free flight, which can then be allocated to a member of staff at the branch managers discretion. Based on your ogive, estimate the monthly sales figure needed to qualify for the bonus in October. The estimated monthly figure is $ Space for workings to question three
(Total for Question Three = 17 marks)
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November 2003
Question Four
Each year, a large company, which manufactures domestic electrical appliances, pays its employees an annual bonus. The Company Accountant wishes to assess the effect of the previous years bonus on the companys output for the following year. Data relating to bonus paid (as a percentage of annual salary) and total output (tens of thousands of units sold) over an 8-year period are given in the following table: Previous years bonus (%) Following years output (0,000s) 0 3 1 6 2 14 3 15 4 20 5 18 6 24 7 25
Required: (a) Plot a scatter diagram of the above data on the axes provided:
Scatter Diagram
30
Marks available
Output (0,000 units)
25 20 15 10 5 0 0
Bonus (%) 2
(b) shaded box below.
Comment on the relationship shown by your scatter diagram in the
maximum of 20 words Sub-total:
2 4
Question Four continues on the next page
TURN OVER
November 2003
19
FBSM

Required:
Write your answers to parts (c) and (d) in the shaded boxes below
Marks available
(c) If Bonus (%) is represented by X, and Output (0,000s) is represented

by Y, the following totals have been calculated from the data given in the table on page 19: X = 28, Y = 125, X2 = 140, Y2 = 2391, X.Y = 568 Calculate the correlation coefficient between Bonus and Output, giving your answer correct to 2 decimal places. 4
(d) The least squares regression equation relating the previous year's annual bonus to the following years output is:
Output (0,000s) = 475 + 311 x Bonus (%) In the above equation, what does the value 475 represent?
maximum of 20 words Sub-total: Space for workings to question four
3 7
Question Four continues on the next page

FBSM 20 November 2003

Required:
Write your answers to parts (e) to (g) in the shaded boxes below
Marks available
(e) If the annual bonus paid last year was 10%, predict the output for the
current year. 2
(f) Comment on the reliability of the prediction that you made in part (e)
maximum of 20 words Another similar manufacturing company has found that the coefficient (g) of determination between Bonus and Output is 086. Explain what this means.
maximum of 20 words
(Total for Question Four = 17 Marks)
Space for workings to question four
End of Question Paper Maths Tables and Formulae are on pages 22 27
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3c
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Monday late afternoon
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November 2003

CIMA Business Mathematics Fundamentals Past Papers

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Foundation Level

The Chartered Institute of Management Accountants 2001

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SECTION A 50 MARKS ANSWER ALL TWENTY-FIVE SUB-QUESTIONS 2 MARKS EACH

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is used in stock control.

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This statement is false if X equals A 5 B 4 C 3 D 2

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SECTION B 50 MARKS ANSWER TWO QUESTIONS ONLY

(10 marks) (Total = 25 marks)

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S = sales units and T = time period in quarters

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(5 marks) (Total = 25 marks)

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The Chartered Institute of Management Accountants 2001

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SECTION A 50 MARKS ANSWER ALL TWENTY-FIVE SUB-QUESTIONS 2 MARKS EACH

The numbers of hours worked last week by a companys 11 employees were: P Q 35 36 R 36 S 36 T 40 U 38 V 40 W 37 X 35 Y 42 Z 43

The median number of hours worked last week was A 36 B 37 C 38 D 39

This type of sample is termed A biased. B multi-stage. C quota. D systematic.

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The following formula is used in loan calculations: R= 2PC B(N + 1)

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1998 100 180

1999 105 190

2000 110 200

2001 115 210

1.17 If aX + bX + c = 0, then X = If X 2X 24 = 0, then X equals A 2 10 2 B

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SECTION B 50 MARKS ANSWER TWO QUESTIONS ONLY

(2 marks) (b) (i)

(3 marks) (Total = 25 marks)

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(4 marks) (Total = 25 marks)

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[Formulae are provided on page 19.]

(3 marks) (Total = 25 marks)

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Examination Question and Answer Book

For office use only

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SECTION A 50 MARKS ANSWER ALL TWENTY-FIVE SUB-QUESTIONS 2 MARKS EACH

Space for workings to 1.1

For office use only

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Space for workings to 1.3

For office use only

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Space for workings to 1.7

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1.9 Sample 1: Sample 2: 2, 5, 5, 12 1, 3, 5, 8, 8

Space for workings to 1.9

Space for workings to 1.10