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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Henriette

3 days 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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Adelina

5 days 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

5 days 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

6 days ago

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

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Eugene

8 days 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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Reta

17 days ago

I think the answer is A) 3155

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