CIMAPRA19-E03-1 Exam - 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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Lashon

3 months ago

Finally, I can get faster internet!

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Myra

3 months ago

Is it really essential though? Seems risky.

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Stefan

3 months ago

They definitely have the funds lined up for this.

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Jarod

4 months ago

I doubt they’ll gain a first mover advantage now.

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Alida

4 months ago

Sounds like a smart move for YZ to upgrade to 4G!

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Aleta

4 months ago

D feels essential given the competitive pressure, but I’m not completely confident about E; I hope they have enough funds lined up.

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Joseph

4 months ago

C seems correct since the institutional investors are on board, but I wonder if all stakeholders are really supportive.

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Benton

4 months ago

I'm not sure about B; I feel like YZ might be too late to gain a first mover advantage since the rival is already ahead.

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Francoise

5 months ago

I think option A makes sense because upgrading to 4G could attract new customers.

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Lon

5 months ago

This is a tricky one. I'm not sure if all the statements are correct, so I'll need to carefully analyze each one before selecting the right answers.

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Karl

5 months ago

I feel confident about this one. The question clearly outlines the benefits of the 4G upgrade, including the positive net present value and the willingness of customers to pay more for the improved service.

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Adolph

5 months ago

Okay, let's think this through step-by-step. We need to focus on the information provided and determine which statements are correct based on the given scenario.

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Yuette

5 months ago

Hmm, I'm a bit unsure about this one. There are a lot of factors to consider, like the potential impact on customer loyalty and the long-term financial implications.

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Kami

5 months ago

This seems like a straightforward investment decision. The key is to identify the correct statements that support the 4G network upgrade.

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Jannette

10 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

8 months ago

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

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Elsa

8 months ago

B) YZ will gain a first mover advantage.

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Amber

9 months ago

A) It provides a market development opportunity for YZ.

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Ellen

10 months ago

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

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Leatha

9 months ago

Option E) There are sufficient investment funds available

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Scarlet

9 months ago

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

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Noah

9 months ago

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

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Rosendo

9 months ago

Option E) There are sufficient investment funds available

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Tiffiny

9 months ago

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

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Elliott

10 months ago

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

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Willie

10 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

10 months ago

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

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Mira

10 months ago

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

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Tien

10 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

11 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

9 months ago

E) There are sufficient investment funds available

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Van

9 months ago

C) There is stakeholder approval for the investment.

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Francoise

10 months ago

A) It provides a market development opportunity for YZ.

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Wava

11 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

11 months ago

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

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Carma

11 months ago

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

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