CIMAPRA19-F03-1 Exam - Topic 7 Question 45 Discussion

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

Question #: 45
Topic #: 7

[All CIMAPRA19-F03-1 Questions]

Company P is a largeunlisted food-processing company.

Its currentprofitbefore interest and taxationis$4 million, which it expects to be maintainablein the future.

It has a $10 million long-termloan on which it pays interest of 10%.

Corporate tax ispaid at the rate of 20%.

The following information on P/E multiples is available:

Which of the following is the best indication of theequityvalue of Company P?

A$80 million

B$40 million

C$48 million

D$24 million

Show Suggested Answer

Suggested Answer: D

by Denise at May 09, 2022, 07:49 AM

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6 months ago

Company P has a profit of $4 million and a $10 million loan.

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Okay, for this type of question, I'd want to consider whether the coffee mug has a useful life beyond a short period and if it meets the criteria to be recorded as an asset. Since it's promotional, I'm leaning towards True.

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Sharee

6 months ago

Based on the details provided, I think option D is the way to go. Creating a hold code that the CSR can add and remove as needed seems like the most flexible and straightforward solution. I feel pretty confident about this choice.

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Maryln

6 months ago

I thought it was MST, but I can't recall if that was just a guess from a practice quiz.

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Broderick

7 months ago

I'm pretty confident that the answer is B. Managed care plans typically use financial incentives like low copays to steer employees towards preferred providers, which helps control costs.

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CIMAPRA19-F03-1 Exam - Topic 7 Question 45 Discussion

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