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CIMAPRO19-P01-1 Exam - Topic 3 Question 74 Discussion

A decision tree is being evaluated back to a decision point.There are two alternatives at this point:1. To abandon the project and generate a return of $435,000;2. To continue with the project and generate the following possible returns:What value should be included at the decision point?
A) $435,000 and D) $720,000
B) $451,000
C) $443,000

CIMAPRO19-P01-1 Exam - Topic 3 Question 74 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 74
Topic #: 3
[All CIMAPRO19-P01-1 Questions]

A decision tree is being evaluated back to a decision point.

There are two alternatives at this point:

1. To abandon the project and generate a return of $435,000;

2. To continue with the project and generate the following possible returns:

What value should be included at the decision point?

Show Suggested Answer Hide Answer
Suggested Answer: A, D, E

References:


by Candida at Aug 28, 2023, 07:38 PM

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Victor
10 months ago
Totally agree, $435,000 is a safe bet!
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Leeann
10 months ago
Wait, how can the expected value be over $700k? Sounds off.
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Tonette
10 months ago
$443,000 seems reasonable based on the averages.
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Adelle
10 months ago
I think continuing could yield more, though!
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Lazaro
10 months ago
The guaranteed return is $435,000 if we abandon.
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Delbert
11 months ago
I’m leaning towards option B, $451,000, but I can't recall how we arrived at that number in our practice sessions.
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Salome
11 months ago
I feel like the expected value calculation might be tricky. Should we average the possible returns or do something else?
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Melda
11 months ago
I think we need to compare the $435,000 with the expected returns from continuing the project. There was a similar question on our practice exam.
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Isabella
11 months ago
I remember we discussed decision trees in class, but I'm not sure how to calculate the expected value here.
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Joni
11 months ago
This is straightforward. The expected value of continuing the project is the sum of the probability-weighted returns, which is $451,000. So the value that should be included at the decision point is $451,000.
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Elena
11 months ago
Okay, I think I've got this. I just need to compare the expected value of abandoning the project ($435,000) to the expected value of continuing the project, which is the probability-weighted average of the possible returns.
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Glendora
11 months ago
Hmm, I'm a bit confused by the probabilities and payoffs here. I'll need to double-check my calculations to make sure I'm understanding this correctly.
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Buck
11 months ago
This looks like a classic decision tree problem. I'll need to carefully evaluate the expected values of the two alternatives to determine the best option.
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Jestine
11 months ago
Easy peasy! The expected value of continuing the project is $451,000, so that's the value I should include at the decision point.
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Lelia
11 months ago
Okay, I think I've got this. I just need to calculate the expected value of continuing the project and compare it to the $435,000 return from abandoning it.
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Karan
11 months ago
Hmm, I'm a bit confused by the probabilities and payoffs in the decision tree. I'll need to double-check my understanding before answering.
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Ming
11 months ago
This looks like a classic decision tree problem. I'll need to carefully evaluate the expected values of the two alternatives to determine the best option.
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Viola
11 months ago
Okay, let me see... I think the key here is that the question is asking about enabling test generation, so the tag has to be related to that. I'm leaning towards C, "testgen", as the most likely answer.
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Maybelle
11 months ago
I'm a bit confused by the different options here. I'll need to review my notes on how to properly reference global Apex classes before I can confidently answer this.
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Lindsey
11 months ago
Okay, let me think this through. I know we should aim for cross-browser compatibility, but using multiple libraries doesn't sound like a good idea. I'll go with that as my answer.
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Casie
1 year ago
I'm picking option A. $435,000. It may not be the highest, but at least I know what I'm getting. No need to risk it all on the unknown, am I right? Slow and steady wins the race, as they say.
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Charlene
1 year ago
I see your point, but I would personally choose option D. $720,000 is a high return and worth the risk in my opinion.
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Stefany
1 year ago
I think I would go with option B, $451,000 is a tempting offer. Sometimes taking a risk pays off.
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Jackie
1 year ago
I agree with you, option A seems like the safe choice. $435,000 guaranteed is better than risking it all.
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Mitsue
1 year ago
Art: Exactly, no need to take unnecessary risks.
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Art
1 year ago
User 2: I think so too. It's better to go for the guaranteed return.
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Tonette
1 year ago
User 1: I agree with you, option A seems like the safer choice.
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Tiffiny
1 year ago
Ah, the old decision tree dilemma. I'm feeling lucky, so I'm going with B. $451,000. After all, what's a few thousand dollars between friends? Let's roll the dice and see what happens!
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Dusti
1 year ago
I'm going with C. $443,000. It's the average of the two possible returns from continuing the project, and that seems like a safe bet to me. No need to get too fancy here.
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Phil
1 year ago
I'm not sure, but I think I'll stick with A. $435,000. It's better to play it safe in this situation.
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Kandis
1 year ago
I agree with C. $443,000. It's a safe choice and the average of the two possible returns.
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Lorrie
1 year ago
I'm leaning towards D. $720,000. It's a bit riskier, but the potential return is higher.
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Selma
1 year ago
I think I'll go with B. $451,000. It seems like a good balance between the two options.
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Carmen
1 year ago
Hmm, this one's tricky. I'm leaning towards D. $720,000, since that's the highest possible return if we continue the project. Who doesn't love a big payout, right?
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Michael
1 year ago
That's true, but the potential return of $720,000 is tempting. We should take the risk.
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Annmarie
1 year ago
I think the answer is B. $451,000. The expected value of continuing the project is calculated as (0.4 * $700,000) + (0.6 * $250,000) = $451,000. This is higher than the $435,000 return from abandoning the project.
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Elouise
1 year ago
Yes, it seems like the better decision financially.
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Gaston
1 year ago
I think we should definitely continue with the project then.
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Rachael
1 year ago
That makes sense, the expected value calculation supports that.
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Geraldine
1 year ago
I agree with you, the answer is B. $451,000.
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Vicky
1 year ago
But what if the returns are not as high as expected? Maybe it's safer to abandon the project.
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Michael
1 year ago
I think we should continue with the project for a chance to earn more.
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