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

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam

Question #: 91
Topic #: 1

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: $

A3155, 3150, 3159, 3157, 3153, 3152, 3158, 3160, 3156, 3154, 3151

B3155, 3150, 3159, 3158, 3153, 3152, 3158, 3160, 3156, 3154, 3151

C3155, 3150, 3159, 3157, 3153, 3150, 3158, 3160, 3156, 3154, 3151

D3153, 3150, 3159, 3157, 3153, 3152, 3158, 3160, 3156, 3154, 3151

Show Suggested Answer

Suggested Answer: B

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

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Leontine

1 months 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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Margurite

9 days ago

A) 3155

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Lura

1 months 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

4 days ago

D) 3153

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Truman

27 days ago

C) 3150

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Anglea

28 days ago

B) 3158

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Kristel

30 days ago

A) 3155

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Estrella

1 months 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

2 months 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

21 days ago

B) 3158

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Tina

1 months ago

A) 3155

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Adelina

2 months 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

2 months 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

2 months ago

I agree with Reta, the NPV calculation seems to match option A)

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Eugene

2 months 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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Ressie

1 months ago

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Reta

2 months ago

I think the answer is A) 3155

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