CIMAPRO19-P02-1 Exam - Topic 1 Question 72 Discussion

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

Question #: 72
Topic #: 1

[All CIMAPRO19-P02-1 Questions]

An investment centre is appraising a potential project that is expected to yield a Return on Investment (ROI) of 12%.

Without the project the investment centre expects to earn an ROI of 14%. The cost of capital is 10%.

What would be the impact on the investment centre's performance measures if the project is accepted?

AResidual Income would decrease and ROI would increase.

BResidual Income would decrease and ROI would decrease.

CResidual Income would increase and ROI would increase.

DResidual Income would increase and ROI would decrease.

Show Suggested Answer

Suggested Answer: D

by Eden at Jul 31, 2023, 01:32 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Bulah

6 months ago

Surprised that the project has a lower ROI than the current one!

upvoted 0 times

...

Leigha

6 months ago

Wait, how can ROI increase if the project ROI is lower?

upvoted 0 times

...

Kasandra

7 months ago

I disagree, I think ROI will actually increase!

upvoted 0 times

...

Chauncey

7 months ago

Definitely think Residual Income will decrease.

upvoted 0 times

...

Meaghan

7 months ago

ROI is lower than expected without the project.

upvoted 0 times

...

Mertie

7 months ago

I recall that accepting a project with a lower ROI than the current one could actually decrease overall performance measures, but I can't remember if it affects ROI directly.

upvoted 0 times

...

Eun

8 months ago

I'm a bit unsure, but I feel like if the project has a lower ROI than the investment centre's current ROI, it could lead to a decrease in residual income.

upvoted 0 times

...

Cherry

8 months ago

I think I practiced a similar question where the ROI was compared to the cost of capital. If the project ROI is lower than the existing ROI, it might not be a good move.

upvoted 0 times

...

Walton

8 months ago

I remember that if the ROI from the project is lower than the current ROI, it could negatively impact the residual income.

upvoted 0 times

...

Ashleigh

8 months ago

Hmm, I'm a little confused on whether the Joint Commission only requires clinical staff involvement. I'll need to review that part carefully.

upvoted 0 times

...

The way I see it, the consistent time and location helps establish a predictable routine for the Daily Scrum, which makes it easier for the team to attend and participate. Option B seems like the most relevant answer to me.

upvoted 0 times

...

Daisy

8 months ago

I think AlertDialog is more about showing important messages rather than being just a small interface at the bottom.

upvoted 0 times

...

Lindsey

1 year ago

Oooh, this one's a brain-teaser! I'm leaning towards B, but I'm also wondering if the investment center has a secret stash of magic beans that could make the numbers work out differently.

upvoted 0 times

Hildred

11 months ago

D) Residual Income would increase and ROI would decrease.

upvoted 0 times

...

Effie

11 months ago

C) Residual Income would increase and ROI would increase.

upvoted 0 times

...

Dyan

11 months ago

B) Residual Income would decrease and ROI would decrease.

upvoted 0 times

...

Mable

11 months ago

A) Residual Income would decrease and ROI would increase.

upvoted 0 times

...

Lashaunda

11 months ago

D) Residual Income would increase and ROI would decrease.

upvoted 0 times

...

Irma

11 months ago

C) Residual Income would increase and ROI would increase.

upvoted 0 times

...

Hollis

1 year ago

B) Residual Income would decrease and ROI would decrease.

upvoted 0 times

...

Maryann

1 year ago

A) Residual Income would decrease and ROI would increase.

upvoted 0 times

...

Rebecka

1 year ago

This is a classic case of 'the numbers don't lie, but the accountants do.' I'm betting on B. Residual Income and ROI both go down. Unless, of course, the investment center is run by magicians.

upvoted 0 times

...

Twana

1 year ago

I'm going to go with D. If the project's ROI is lower, that means Residual Income will increase, but ROI will decrease. It's like getting a participation trophy, but with less actual performance.

upvoted 0 times