CIMAPRO19-P02-1 Exam - Topic 1 Question 115 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 115
Topic #: 1

[All CIMAPRO19-P02-1 Questions]

A project with a 6 year life generates a positive net present value of $1,100. The discount rate is 8%.

To the nearest $, the equivalent annual benefit is:

A$5,085

B$238

C$177

D$693

Show Suggested Answer

Suggested Answer: B

by Stephane at Aug 03, 2025, 05:48 PM

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Mendy

3 months ago

Is it really that low? I expected higher!

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Katlyn

4 months ago

Totally agree, B is the right choice!

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Yun

4 months ago

Wait, how did they get $1,100 NPV with an 8% rate?

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Arletta

4 months ago

I think it’s definitely option B!

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Yvonne

4 months ago

The equivalent annual benefit is around $238.

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Lennie

5 months ago

I vaguely remember that we need to use the annuity formula for this. I think the answer might be option A, but I need to double-check my calculations.

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Veda

5 months ago

I’m a bit confused about the discount rate's impact on the equivalent annual benefit. I hope I can remember the steps to calculate it properly.

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Lonny

6 months ago

I think we practiced a similar question in class where we had to find the annual equivalent. I feel like the answer is around $5000, but I can't recall the exact calculation.

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Tess

6 months ago

I remember something about converting NPV to an equivalent annual benefit, but I'm not sure how to apply the formula correctly.

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Bettyann

6 months ago

Alright, let me think this through step-by-step. I need to use the formula for equivalent annual benefit, which involves the net present value, discount rate, and project life. I've got this!

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Shizue

6 months ago

Wait, how do I convert the net present value to an equivalent annual benefit? I'm not sure I fully understand this concept.

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Gabriele

6 months ago

This looks straightforward. I just need to remember the formula and do the math carefully. I'm confident I can get the right answer.

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Pete

7 months ago

Hmm, I'm a bit confused. I know we need to find the equivalent annual benefit, but I'm not sure how to calculate that from the net present value and discount rate.

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