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?

AA project in an industry in which FG does not currently operate, funded wholly by equity.

BA project to extend FG's existing operations, funded wholly by debt.

CA project in an industry in which FG does not currently operate, funded 30% with debt and 70% with equity.

DA project to extend FG's existing operations, funded 30% with debt and 70% with equity.

Show Suggested Answer

Suggested Answer: D

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

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Valentine

4 months ago

Totally agree, D makes the most sense here!

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Pedro

4 months ago

Wait, can we really use 12% for a totally new industry?

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Thea

4 months ago

I think D is the best choice, aligns with existing operations.

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Maurine

4 months ago

Definitely not A, that doesn't fit the current operations.

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Anabel

5 months ago

FG's WACC is 12% with 30% gearing.

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Lindy

5 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

5 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

5 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.

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