CIMA Exam CIMAPRA19-E03-1 Topic 1 Question 103 Discussion

Actual exam question for CIMA's CIMAPRA19-E03-1 exam

Question #: 103
Topic #: 1

YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.

This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering 4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.

Which of the following statements are correct? (Choose all that apply.)

AIt provides a market development opportunity for YZ.

BYZ will gain a first mover advantage.

CThere is stakeholder approval for the investment.

DIt is essential given the strategic threats to YZ.

EThere are sufficient investment funds available

Show Suggested Answer

Suggested Answer: C

by Ellen at Dec 05, 2024, 03:04 PM

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Jannette

3 months ago

Upgrade or go extinct - that's the 4G dilemma facing YZ. I hope their institutional investors have their charging cables ready!

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Daniel

2 months ago

D) It is essential given the strategic threats to YZ.

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Elsa

2 months ago

B) YZ will gain a first mover advantage.

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Amber

2 months ago

A) It provides a market development opportunity for YZ.

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Ellen

4 months ago

Ha! Good one. And option A - 'market development opportunity'? More like 'customer retention necessity' at this point.

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Leatha

2 months ago

Option E) There are sufficient investment funds available

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Scarlet

3 months ago

Option D) It is essential given the strategic threats to YZ.

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Noah

3 months ago

Option A) It provides a market development opportunity for YZ.

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Rosendo

3 months ago

Option E) There are sufficient investment funds available

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Tiffiny

3 months ago

Option D) It is essential given the strategic threats to YZ.

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Elliott

3 months ago

Option A) It provides a market development opportunity for YZ.

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Willie

4 months ago

I'm not sure about option B. First mover advantage? More like 'last mover disadvantage' if they don't act fast!

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Roy

3 months ago

I agree, if they wait too long, they could lose even more customers to their rival.

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Mira

3 months ago

Option B is correct. Being the first to offer 4G can attract new customers.

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Tien

4 months ago

Agreed. And option D seems valid too - the rival's 4G offering is a strategic threat that YZ needs to address.

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Mari

4 months ago

The question outlines a clear business case for the 4G upgrade. Options C and E are the obvious correct answers.

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Goldie

3 months ago

E) There are sufficient investment funds available

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Van

3 months ago

C) There is stakeholder approval for the investment.

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Francoise

4 months ago

A) It provides a market development opportunity for YZ.

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Wava

4 months ago

I also think option D is correct. YZ needs to upgrade to 4G to stay competitive in the market.

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Erinn

4 months ago

I agree with Carma. Option A is a good opportunity for YZ to grow its customer base.

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Carma

5 months ago

I think option A is correct because it will open up new markets for YZ.

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