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CIMAPRA17-BA1-1 Exam - Topic 1 Question 91 Discussion

A business is contemplating investing in a new project with a lifespan of three years and a capital cost of $100,000. The expected net cash flows from the project are as follows:Year 1 $35,000Year 2 $50,000Year 3 $40,000The cost of capital to the business is 10%The net present value of the project is: $
B) 3155, 3150, 3159, 3158, 3153, 3152, 3158, 3160, 3156, 3154, 3151
A) 3155, 3150, 3159, 3157, 3153, 3152, 3158, 3160, 3156, 3154, 3151
C) 3155, 3150, 3159, 3157, 3153, 3150, 3158, 3160, 3156, 3154, 3151
D) 3153, 3150, 3159, 3157, 3153, 3152, 3158, 3160, 3156, 3154, 3151

CIMAPRA17-BA1-1 Exam - Topic 1 Question 91 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 91
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

A business is contemplating investing in a new project with a lifespan of three years and a capital cost of $100,000. The expected net cash flows from the project are as follows:

Year 1 $35,000

Year 2 $50,000

Year 3 $40,000

The cost of capital to the business is 10%

The net present value of the project is: $

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Suggested Answer: B

by Elsa at Jul 03, 2024, 03:49 AM

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Hollis
8 months ago
I’m leaning towards option B for the NPV.
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Pamella
8 months ago
10% cost of capital is pretty standard, right?
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Isreal
8 months ago
Wait, are we sure about those cash flow estimates?
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Daniela
8 months ago
I think the NPV will be positive, definitely worth it.
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Nieves
9 months ago
The cash flows look solid for a 3-year project!
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Kris
9 months ago
I think the answer might be around 3155, but I’m not completely confident. I wish I had reviewed the NPV calculations more thoroughly.
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Tyisha
9 months ago
I’m a bit confused about how to apply the cost of capital here. Did we use it directly in the calculations or was it just for comparison?
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Jennifer
9 months ago
This question seems similar to one we practiced last week. I think the cash flows need to be discounted at 10% to find the NPV.
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Candida
9 months ago
I remember we calculated NPV in class, but I’m not sure if I got the formula right for this one.
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Eric
9 months ago
This seems pretty straightforward. I'll just plug the numbers into the NPV formula and see what I get. As long as I don't make any silly mistakes in the calculations, I should be able to arrive at the correct answer.
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Asha
9 months ago
Okay, I've got this. First, I'll calculate the present value of each cash flow using the discount rate of 10%. Then I'll add up the present values and subtract the initial investment to get the NPV. Should be straightforward if I work through it step-by-step.
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Celestina
9 months ago
Hmm, I'm a bit unsure about how to approach this. I know NPV has something to do with the time value of money, but I'm not confident in my ability to do the calculations correctly. Maybe I should review my notes on this topic before attempting the problem.
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Kindra
9 months ago
This looks like a standard net present value (NPV) calculation problem. I'll need to discount the future cash flows back to the present using the given 10% cost of capital.
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Malcom
10 months ago
I'm pretty confident I know the answer to this. If the team member hierarchy type is changed, the existing targets would turn to draft status, so option C is the correct answer.
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Karol
10 months ago
The T Server and Media Server don't seem to be the right answers here. I'm leaning towards the SIP Server and Network SIP Server, but I'll review my notes to make sure I'm not missing anything.
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Mila
10 months ago
I remember we practiced questions about DUR, and I believe that prospective ones deal with current and future treatments, not past data.
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Martina
10 months ago
Training seems like a logical final step to me, since you'd want to make sure everyone knows how to execute the contingency plan properly.
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Leontine
1 year ago
NPV? More like NPC (Net Present Confusion), am I right? Let's see if I can figure this out without a calculator the size of a small country.
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Sherrell
1 year ago
C) 3157
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Joni
1 year ago
B) 3158
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Margurite
1 year ago
A) 3155
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Lura
1 year ago
Wait, they're asking us to calculate the net present value of a project? I thought this was a baking exam!
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Abraham
1 year ago
D) 3153
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Truman
1 year ago
C) 3150
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Anglea
1 year ago
B) 3158
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Kristel
1 year ago
A) 3155
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Estrella
1 year ago
Oh boy, time to crunch some numbers. As long as I don't accidentally divide by zero, I think I'll be good to go.
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Henriette
1 year ago
NPV, huh? Time to put my financial wizardry to the test. I bet I can nail this in my sleep.
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Louann
1 year ago
B) 3158
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Tina
1 year ago
A) 3155
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Adelina
1 year ago
I'm not sure, but I think the cost of capital is a key factor in determining the net present value
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Ardella
1 year ago
Ah, the dreaded time value of money question. As long as I remember the formula, I should be able to get this right.
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Therese
1 year ago
I agree with Reta, the NPV calculation seems to match option A)
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Eugene
1 year ago
This seems like a straightforward NPV calculation. I'll need to be careful not to make any mistakes in the discounting and summation.
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Robt
1 year ago
D
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Lauryn
1 year ago
C
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Benton
1 year ago
B
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Ressie
1 year ago
A
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Reta
1 year ago
I think the answer is A) 3155
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