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CIMAPRO19-P02-1 Exam - Topic 1 Question 28 Discussion

A project is viable because it has a positive net present value (NPV).Details of four of the input variables, together with the sensitivity of the viability of the project to a change in each one in isolation, are given below.Which of the following statements is correct?
C) If the incremental annual cash contributions reduce by more than 8% then the project will no longer be viable.
A) A 1% change in the initial investment will result in a change of 3% in the NPV.
B) The resale value at the end of the project is the most sensitive of the four variables.
D) If the rate of taxation on profits increases to 40% then the project will no longer be viable.

CIMAPRO19-P02-1 Exam - Topic 1 Question 28 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 28
Topic #: 1
[All CIMAPRO19-P02-1 Questions]

A project is viable because it has a positive net present value (NPV).

Details of four of the input variables, together with the sensitivity of the viability of the project to a change in each one in isolation, are given below.

Which of the following statements is correct?

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Suggested Answer: C

by Delmy at May 09, 2022, 02:49 AM

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Alease
7 months ago
Just to clarify, is the sensitivity analysis based on historical data?
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Maurine
7 months ago
Totally agree, if cash contributions drop over 8%, it's game over for the project.
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Merri
8 months ago
Really? A 40% tax rate makes it unviable? That seems extreme.
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Carry
8 months ago
I think the resale value is actually the most sensitive factor here.
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Lashanda
8 months ago
A 1% change in investment affecting NPV by 3% sounds significant!
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Jose
8 months ago
I'll start by mapping out the valid state transitions, then eliminate the options that don't follow the rules.
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Tammara
8 months ago
I'm pretty confident that the workload per participant on a standard dashboard would be the best choice. That gives us a clear view of how much each individual is handling, which is a key driver of overall efficiency.
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Carmela
8 months ago
This question seems straightforward, but I want to make sure I understand the key details about partnership dissolution under the Revised Uniform Partnership Act.
upvoted 0 times
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Anisha
8 months ago
I'm pretty sure Layer 3 switches handle broadcast traffic differently than Layer 2. It might be about VLANs, but I'm not entirely confident.
upvoted 0 times
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