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CIMAPRA19-E03-1 Exam - Topic 5 Question 69 Discussion

BBB operates a national mobile phone (cell phone) network in one country. It is considering investing in upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to theInternet.The investment will cost $29 millionwhich BBB's institutional investors have agreed to provide by subscribing to a rights issue. This is because management has informedinstitutional investorsthat a rival is already offering 4G and that this is taking customers away from BBB because BBB's network is now regarded as too slow. BBB's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.Whichof the following statements are correct?Select ALL that apply.
C) There is stakeholder approval for the investment.
A) BBB will gain a first mover advantage.
B) It provides a market development opportunity for BBB.
D) It is essential given the strategic threats to BBB.
E) There are sufficient investment funds available.

CIMAPRA19-E03-1 Exam - Topic 5 Question 69 Discussion

Actual exam question for CIMA's CIMAPRA19-E03-1 exam
Question #: 69
Topic #: 5
[All CIMAPRA19-E03-1 Questions]

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

The investment will cost $29 millionwhich BBB's institutional investors have agreed to provide by subscribing to a rights issue. This is because management has informedinstitutional investorsthat a rival is already offering 4G and that this is taking customers away from BBB because BBB's network is now regarded as too slow. BBB's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.

Whichof the following statements are correct?

Select ALL that apply.

Show Suggested Answer Hide Answer
Suggested Answer: C

by Kate at May 27, 2023, 07:46 PM

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Jesusa
8 months ago
Not sure if this investment will pay off in the long run.
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Ryan
9 months ago
Totally agree, this upgrade is essential for BBB's future.
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Arlie
9 months ago
Wait, are they really getting $29 million just like that?
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Dana
9 months ago
I think they should have upgraded sooner!
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Viva
9 months ago
BBB is definitely losing customers to the rival's 4G.
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Alayna
9 months ago
The investment funds are confirmed since the institutional investors are providing the money, so I feel confident about that statement being correct.
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King
9 months ago
I think stakeholder approval is implied since the investors are on board, but I wonder if all stakeholders are really in agreement.
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Precious
9 months ago
I remember a practice question about market development opportunities, and it seems like upgrading to 4G definitely opens up new markets for BBB.
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Andree
9 months ago
I'm not entirely sure about the first mover advantage; I think it only applies if they launch before the rival, but they might just be catching up.
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Mattie
10 months ago
This is a tricky one. I'll need to think through the project management process carefully to determine when Directing a Project begins.
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Ivette
10 months ago
I feel pretty good about this. Based on the information provided, I think the portfolio management plan's guidance on stakeholder engagement would be the most relevant section to review.
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Izetta
1 year ago
Alright, let's see here. Looks like there's stakeholder approval, strategic necessity, and sufficient funds, so I'm going with C, D, and E as the correct answers. Can't wait to see what kind of 4G speeds these customers are willing to pay extra for!
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Dyan
1 year ago
It's exciting to see how the investment in 4G will improve customer experience and attract more customers.
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Sherell
1 year ago
I think BBB will definitely gain a first mover advantage by upgrading to 4G.
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Grover
1 year ago
Having enough funds is definitely a good sign for BBB's future success.
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Howard
1 year ago
I think the strategic threats are real, so upgrading to 4G is necessary.
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Titus
1 year ago
I agree, stakeholder approval is crucial for such a big investment.
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Latrice
1 year ago
I agree, stakeholder approval, strategic necessity, and sufficient funds are all important factors to consider.
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Buddy
1 year ago
Haha, I bet the rival's 4G network is powered by a hamster on a wheel. BBB should just throw some extra wheels in there and call it a day!
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Celeste
1 year ago
Haha, that would be a funny sight to see!
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Gearldine
1 year ago
There is stakeholder approval for the investment.
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Carla
1 year ago
It provides a market development opportunity for BBB.
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Nancey
1 year ago
BBB will gain a first mover advantage.
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Daniel
1 year ago
There is stakeholder approval for the investment.
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Serina
1 year ago
Haha, that would be a funny sight to see!
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Eveline
1 year ago
It provides a market development opportunity for BBB.
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Cruz
1 year ago
BBB will gain a first mover advantage.
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Noel
1 year ago
I'm not so sure. While the investment seems to have a positive net present value, I'm curious about the specifics of the market development opportunity. Is this really a sure thing, or could it backfire if the rival's 4G network is more advanced?
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Elenore
1 year ago
I also think option D is correct. Upgrading to 4G is essential to stay competitive in the market.
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Odette
1 year ago
I agree with Ammie. Option A makes sense as being the first to offer 4G can attract new customers.
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Ammie
1 year ago
I think option A is correct because BBB will gain a first mover advantage.
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Nobuko
1 year ago
Wow, this is a no-brainer! BBB is totally making the right move by upgrading to 4G. They'll get that first mover advantage and keep their customers happy. Plus, the funds are already secured, so what's the hold-up?
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Malika
1 year ago
I agree, it's a smart move to stay ahead in the market.
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Gerri
1 year ago
Definitely! Upgrading to 4G will give BBB an edge over their competitors.
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Francine
1 year ago
I believe B is also correct. It opens up a new market for BBB.
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Delmy
1 year ago
I agree with you, Edna. A first mover advantage and addressing strategic threats are important.
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Edna
1 year ago
I think A and D are correct.
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