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CIMAPRA19-F02-1 Exam - Topic 1 Question 44 Discussion

FG has a weighted average cost of capital of 12% based on its existing:* level of gearing of 30% (measured as debt/(debt + equity)); and* business operations.This would be used as an appropriatediscount factor to assess which of the following significant projects?
D) A project to extend FG's existing operations, funded 30% with debt and 70% with equity.
A) A project in an industry in which FG does not currently operate, funded wholly by equity.
B) A project to extend FG's existing operations, funded wholly by debt.
C) A project in an industry in which FG does not currently operate, funded 30% with debt and 70% with equity.

CIMAPRA19-F02-1 Exam - Topic 1 Question 44 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 44
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

FG has a weighted average cost of capital of 12% based on its existing:

* level of gearing of 30% (measured as debt/(debt + equity)); and

* business operations.

This would be used as an appropriatediscount factor to assess which of the following significant projects?

Show Suggested Answer Hide Answer
Suggested Answer: D

by Markus at May 03, 2022, 03:21 PM

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Valentine
10 months ago
Totally agree, D makes the most sense here!
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Pedro
10 months ago
Wait, can we really use 12% for a totally new industry?
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Thea
11 months ago
I think D is the best choice, aligns with existing operations.
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Maurine
11 months ago
Definitely not A, that doesn't fit the current operations.
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Anabel
11 months ago
FG's WACC is 12% with 30% gearing.
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Lindy
11 months ago
The `debug()` method sounds like it could be the right answer, but I'm not 100% confident. I'll try to remember the different methods we learned and see if I can eliminate some of the options.
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Trina
11 months ago
Okay, I think I've got this. The Wait for window action and the Focus window action seem like the most likely solutions to try before the Send keys action. I'll give those a shot.
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Shasta
11 months ago
This is a tricky one. I'm not entirely sure what the $group stage is doing, but I think the $match stage is just calculating the number of posts with likes in that range, so I'll go with option C.
upvoted 0 times
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