CIMAPRA19-F03-1 Exam - Topic 4 Question 6 Discussion

Actual exam question for CIMA's CIMAPRA19-F03-1 exam

Question #: 6
Topic #: 4

A large, listed company in the food and household goods industry needs to raise $50 million for a period of up to 6 months.

It has an excellent credit rating and there is almost no risk of the company defaulting on the borrowings. The company already has a commercial paper programme in place and has a good relationship with its bank.

Which of the following is likely to be the most cost effective method of borrowing the money?

ABank overdraft

B6 month term loan

CTreasury Bills

DCommercial paper

Show Suggested Answer

Suggested Answer: D

by Rhea at May 08, 2022, 09:18 PM

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Kaitlyn

6 months ago

Surprised they don’t just use the overdraft!

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Royal

6 months ago

A term loan would be more expensive, no doubt.

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Mayra

6 months ago

Really? I thought treasury bills were safer.

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Tamekia

6 months ago

I agree, low cost and quick access!

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Olga

6 months ago

Commercial paper seems like the best option here.

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Velda

7 months ago

Hmm, I'm not totally sure about this one. I'll have to think it through carefully.

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Artie

7 months ago

I remember that the resource-based view focuses on internal strengths, right? I think it's about leveraging unique assets for competitive advantage.

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Mitzie

7 months ago

I think the key here is the latency between the data centers. With 20ms of latency, that's going to introduce a lot of delay in streaming the vDisk, so option A seems like the most relevant reason.

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