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AAFM GLO_CWM_LVL_1 Exam - Topic 9 Question 49 Discussion

Michael estimates opportunity cost of investment to be 10.5% compounded annually. Which of the following is the best proposal?
C) Receive Rs. 45,000/- today
A) Receive Rs. 5,500/- at beginning of each year for 15 years
B) Receive Rs. 5,500/- at the end of each year for 19 years
D) Receive Rs. 1,20,000/- at the end of 10 years

AAFM GLO_CWM_LVL_1 Exam - Topic 9 Question 49 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 49
Topic #: 9
[All GLO_CWM_LVL_1 Questions]

Michael estimates opportunity cost of investment to be 10.5% compounded annually. Which of the following is the best proposal?

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Suggested Answer: C

by Denise at Aug 24, 2022, 06:04 PM

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Janet
7 months ago
I’m surprised people aren’t picking C more! Instant cash is king!
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Berry
7 months ago
Wait, how does D compare? Seems like a long wait for that amount.
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Gennie
8 months ago
A looks solid too, but those payments over 15 years...
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Bernardo
8 months ago
I think B might actually give more in the long run.
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Alexis
8 months ago
Option C is the best choice for immediate cash!
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Davida
8 months ago
I vaguely recall that the longer you wait for cash flows, the less valuable they become due to discounting. So, I think I should be cautious about option D, but I need to run the numbers to be sure.
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Monte
8 months ago
I practiced a similar question where we had to evaluate different cash flow scenarios. I feel like option C might be appealing since it’s a lump sum today, but I’m not sure how it stacks up against the others.
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Stephaine
8 months ago
I'm a bit unsure about the timing of the cash flows. I think receiving money at the beginning of the year might be more beneficial, but I need to double-check the formulas.
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Han
8 months ago
I remember we discussed how to calculate the present value of annuities, especially for options A and B. I think I need to compare those values to see which is better.
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Sunshine
8 months ago
This looks like a tricky one. I'll need to think through the Kubernetes object hierarchy carefully to get this right.
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Roosevelt
9 months ago
This looks like a straightforward PCA problem. I'll need to calculate the total variance and then determine which factors to include to explain 80% of it.
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