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CIMAPRO19-P01-1 Exam - Topic 2 Question 29 Discussion

A company's management is considering investing in a project with an expected life of 4 years. It has a positive net present value of $180,000 when cash flows are discounted at 8% per annum. The project's cash flows include a cash outflow of $100,000 for each of the four years. No tax is payable on projects of this type.The percentage increase in the annual cash outflow that would cause the company's management to reject the project from a financial perspective is, to the nearest 0.1%:
A) 54.3%
B) 45.0%
C) 55,6%
D) 184.0%

CIMAPRO19-P01-1 Exam - Topic 2 Question 29 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 29
Topic #: 2
[All CIMAPRO19-P01-1 Questions]

A company's management is considering investing in a project with an expected life of 4 years. It has a positive net present value of $180,000 when cash flows are discounted at 8% per annum. The project's cash flows include a cash outflow of $100,000 for each of the four years. No tax is payable on projects of this type.

The percentage increase in the annual cash outflow that would cause the company's management to reject the project from a financial perspective is, to the nearest 0.1%:

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Suggested Answer: A

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by Sharika at May 08, 2022, 02:47 AM

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Gwen
9 months ago
Definitely rejecting it if the outflow goes up by 55.6%.
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Lizbeth
9 months ago
Wait, 184%? That seems way too high!
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Mariann
9 months ago
54.3% increase sounds about right to me.
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Jamal
9 months ago
I think it’s crazy how much they can increase the outflow and still consider it!
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Rocco
10 months ago
The cash outflow is $100,000 per year for 4 years.
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Alyce
10 months ago
Okay, let me think this through. The command is adding a forward server, so it's likely related to the outputs configuration. I'll have to double-check that, though.
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Donte
10 months ago
Okay, I think I know the answer to this. The key benefit of open-source is that the development tools and operating system are free, as long as you comply with the license. That's a pretty big advantage over proprietary options.
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Luke
10 months ago
I'm a bit confused on the differences between USED, REFER, and AVAIL in this context. I'll need to review my ZFS concepts to make sure I'm interpreting the question correctly.
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Annice
10 months ago
Watch out for tricky wording! The question asks about committee types. I'll focus on the precise language about how these committees function.
upvoted 0 times
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