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AAFM CWM_LEVEL_2 Exam - Topic 5 Question 73 Discussion

Section C (4 Mark)Read the senario and answer to the question.Saxena is considering an attractive investment proposal in which he is being offered two different cash flow choices at the same initial investment of Rs. 2,00,000. According to you which one should he opt for assuming Risk Free Interest Rate is the required rate of return?
C) Plan B should be opted since it has a higher Present Value.
A) Plan A should be opted since it has a higher Future Value.
B) Plan B should be opted since it has a lower Present Value.
D) Plan B should be opted since it has a lower Future Value.

AAFM CWM_LEVEL_2 Exam - Topic 5 Question 73 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam
Question #: 73
Topic #: 5
[All CWM_LEVEL_2 Questions]

Section C (4 Mark)

Read the senario and answer to the question.

Saxena is considering an attractive investment proposal in which he is being offered two different cash flow choices at the same initial investment of Rs. 2,00,000. According to you which one should he opt for assuming Risk Free Interest Rate is the required rate of return?

Show Suggested Answer Hide Answer
Suggested Answer: C

by Geoffrey at Mar 16, 2024, 03:27 PM

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King
9 months ago
Surprised that Future Value is the main focus here!
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Wenona
10 months ago
I think Plan B is the safer bet overall.
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Flo
10 months ago
Wait, isn't a higher Present Value usually the goal?
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Justine
10 months ago
I disagree, lower Present Value is better for cash flow.
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Terrilyn
10 months ago
Plan A has the higher Future Value, so it makes sense!
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Rosita
11 months ago
I’m confused about the relationship between present and future values. Does a lower present value mean it's a worse investment? I need to think this through.
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Dominga
11 months ago
I feel like I should choose Plan A because it has a higher future value, but I can't recall if that's always the best indicator.
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Alpha
11 months ago
I think we practiced a similar question where we had to choose based on present value. If Plan B has a higher present value, it might be the better option.
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Frank
11 months ago
I remember we discussed how to compare cash flows using present and future values, but I'm not sure which plan is better in this case.
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Leana
11 months ago
I'm a bit confused here. Should I be looking at the future value or the present value? The question mentions both, and I'm not sure which one is more important for this decision.
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Mattie
11 months ago
Okay, I think I understand the scenario. We need to compare the two cash flow options and choose the one that has the higher present value, since the required rate of return is the risk-free interest rate.
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Cristal
11 months ago
Hmm, this looks like a time value of money problem. I'll need to calculate the present value and future value of each plan to determine which one has the higher value.
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Yuonne
11 months ago
I've got this! The key is to focus on the present value of each plan, since the required rate of return is the risk-free interest rate. Plan B has the higher present value, so that's the one Saxena should choose.
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Jettie
11 months ago
I'm feeling pretty confident about this one. The requirement to maintain access to the application even with a load balancer failure points to needing redundancy, which means the load balancers should be in different areas.
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Leeann
11 months ago
This seems like a straightforward question. The "nature of work" section on a job description would typically include the duties and responsibilities of the role, so I'm going with C.
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Junita
11 months ago
I practiced similar questions, but I'm still stuck. Advance Level sounds off to me... I lean towards Company Level, but I'm not confident.
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Loren
12 months ago
I remember practicing with different seating arrangements, and I feel like herringbone was mentioned as a specific term.
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Cecilia
2 years ago
That's a good point, Lindsey. I think it depends on the required rate of return. Plan A may be better in certain scenarios.
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Lindsey
2 years ago
But what if the Risk Free Interest Rate is high? Wouldn't Plan A be more profitable in that case?
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Luisa
2 years ago
I agree with Mi. Plan B is the better choice because it has a higher Present Value.
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Mi
2 years ago
I disagree with you, Jenelle. I believe Plan B should be opted since it has a higher Present Value.
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Jenelle
2 years ago
I think Saxena should opt for Plan A because it has a higher Future Value.
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Tiera
2 years ago
I think Plan B should be opted since it has a higher Present Value, making it more attractive.
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Sylvie
2 years ago
I agree with Stevie, Plan A seems like the better option with a higher Future Value.
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Lourdes
2 years ago
I disagree, I believe Plan B should be chosen since it has a lower Present Value.
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Stevie
2 years ago
I think Saxena should opt for Plan A because it has a higher Future Value.
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