AAFM CWM_LEVEL_2 Exam - Topic 5 Question 42 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 42
Topic #: 5

[All CWM_LEVEL_2 Questions]

Section C (4 Mark)

Read the senario and answer to the question.

Vinay has come across two projects, each with a 12% required rate of return and under given cash flows:

If the projects are independent, you being a CWM would advise Vinay to:

AReject both projects

BAccept Project A and Reject Project B

CReject Project A and Accept Project B

DAccept both projects

Show Suggested Answer

Suggested Answer: D

by Kris at May 28, 2022, 03:00 PM

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Peggie

4 months ago

I’d be careful with Project B, not convinced it’s worth it.

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Paris

4 months ago

Definitely accept both projects! Why not?

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Reita

5 months ago

Wait, are we sure about those cash flows? Seems off.

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Madelyn

5 months ago

I think Project A looks better overall.

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Sina

5 months ago

Both projects have the same return rate, but cash flows matter!

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Lamonica

5 months ago

I feel like I might confuse the acceptance criteria. Should I really accept both projects if they’re independent, or is there a specific threshold I should consider?

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Dean

5 months ago

I’m a bit unsure about the decision criteria. If both projects have the same required rate of return, does that mean I should just look at their NPVs?

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Nicholle

5 months ago

I remember we discussed how to evaluate projects based on their cash flows and IRR. I think I need to calculate the NPV for both projects to decide.

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Xuan

5 months ago

I practiced a similar question where we had to choose between two projects. I think if one has a higher NPV, we should accept that one.

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Arlene

5 months ago

Hmm, this looks like a tricky one. I'll need to carefully read through the options and think about the logical flow of the steps required.

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Chauncey

5 months ago

Ah, I've seen this kind of problem before. My money's on a mismatch in the RD values between the PE routers. That's usually the first thing I'd look at if I ran into this scenario.

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Kate

5 months ago

Hmm, this seems like a straightforward question about the Quick Access Toolbar in MS Access. I should be able to handle this one.

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