CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education Advanced Level
Paper 3 Multiple Choice
Additional Materials: Multiple Choice Answer Sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)
READ THESE INSTRUCTIONS FIRST
Write in soft pencil.
Do not use staples, paper clips, highlighters, glue or correction fluid.
Write your name, Centre number and candidate number on the answer sheet in the spaces
provided unless this has been done for you.
There are thirty questions on this paper. Answer all questions. For each question there are four possible
answers A, B, C, and D.
Choose the one you consider correct and record your choice in soft pencil on the separate answer sheet.
Read the instructions on the Answer Sheet very carefully.
Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
Any rough working should be done in this booklet.
Calculators may be used
This document consists of 11 printed pages and 1 blank page.
Information regarding a proposed investment in a project is given.
estimated life of project
cost of machine
estimated proceeds of disposal of machine
after 5 years
additional working capital required
throughout the project
additional annual revenue (net)
What will be the accounting rate of return on the project?
A 13.6 %
B 21.4 %
C 25 %
D 27.3 %
The table shows the capital and reserves of a company according to its last published accounts.
ordinary shares of $1.00 each
redeemable preference shares of $1.00 each
Profit and Loss Account
The redeemable preference shares were originally issued at par. They have now been redeemed
at a premium of 25 %.
A new issue of 50 000 ordinary shares of $1.00 was made at a premium of $0.15 per share to
finance the redemptions.
What will be the balance on the Share Premium account and Profit and Loss Account after the
Share Premium account