Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

CIMAPRO19-P02-1 Exam - Topic 2 Question 116 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 116
Topic #: 2
[All CIMAPRO19-P02-1 Questions]

There is a 60% probability of a project yielding a positive net present value (NPV) of $280,000 and a 30% probability of it yielding a positive NPV of $140,000.

The only other possible outcome is that the project will yield a negative NPV of $160,000.

What is the expected value of the project's NPV?

Show Suggested Answer Hide Answer
Suggested Answer: A

by Justine at Aug 12, 2025, 04:36 PM

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Haley
3 months ago
Wait, how do we know the probabilities are accurate?
upvoted 0 times
...
Lashawn
3 months ago
I think it's around $194,000, seems right!
upvoted 0 times
...
Marcelle
4 months ago
I calculated it too, and I got $210,000. What gives?
upvoted 0 times
...
Elvis
4 months ago
Definitely not $280,000, that's way too high!
upvoted 0 times
...
Andra
4 months ago
The expected value is calculated using probabilities and outcomes.
upvoted 0 times
...
Kizzy
4 months ago
I feel like the answer might be around $210,000, but I’m not completely confident in my calculations.
upvoted 0 times
...
Whitney
4 months ago
I think the expected value should be a weighted average, but I can't recall how to handle the negative NPV in this case.
upvoted 0 times
...
Aleta
5 months ago
This question feels similar to one we did in class about project evaluations. I think I need to multiply the NPVs by their probabilities first.
upvoted 0 times
...
Margarita
5 months ago
I remember we practiced calculating expected values, but I'm not sure if I got the probabilities right for each outcome.
upvoted 0 times
...
France
5 months ago
No problem, I've got this. I'll multiply each outcome by its probability, then add them all together. The expected value should be the answer.
upvoted 0 times
...
Luke
5 months ago
Wait, I'm a little confused. How do I know which outcome to use for the expected value calculation? Do I just add up all the possible outcomes?
upvoted 0 times
...
Cherrie
5 months ago
Hmm, this seems straightforward enough. I just need to remember the formula for expected value and plug in the numbers. I think I can handle this.
upvoted 0 times
...
Lonny
6 months ago
Okay, let's think this through step-by-step. We have three possible outcomes with their respective probabilities. To find the expected value, we need to multiply each outcome by its probability and then add them up.
upvoted 0 times
...

Save Cancel