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

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 44
Topic #: 1

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

Limited Time Offer

25%

Off

Contribute your Thoughts:

Submit Cancel

Currently there are no comments in this discussion, be the first to comment!