CIMA Exam CIMAPRO19-P02-1 Topic 3 Question 90 Discussion

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

Question #: 90
Topic #: 3

A company has three divisions, each of which is an investment centre. The divisional managers' performance is assessed using return on investment (ROI). A higher ROI will result in a higher bonus for the divisional manager.

The company's cost of capital is 15%.

For the forthcoming year each divisional manager has one investment opportunity available as follows:

The manager(s) of which division(s) will proceed with their respective investment opportunity?

ADivision 1 and Division 3

BDivision 2 and Division 3

CDivision 3 only

DDivision 1 only

Show Suggested Answer

Suggested Answer: A, B

by Chery at Jun 23, 2024, 10:02 AM

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Francene

1 days ago

I agree, Karan. And based on the information provided, it looks like Division 3's investment is the only one that meets that criteria.

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Karan

18 days ago

Okay, let me think this through. If the cost of capital is 15%, then any investment with an ROI higher than that should be pursued, right?

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Leota

10 hours ago

I agree, Division 1 and Division 3 have ROIs higher than the cost of capital.

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Leota

1 days ago

Yes, that's correct. Division 1 and Division 3 should proceed with their investment opportunities.

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Floyd

25 days ago

Hmm, this seems like a tricky one. The key is to focus on the ROI and the company's cost of capital.

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Jaime

2 days ago

Yes, Division 1 and Division 3 would be the best choices based on ROI and the company's cost of capital.

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Winfred

7 days ago

Division 1 and Division 3 have the highest ROI, so they should proceed.

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Van

28 days ago

I disagree. Division 2 and Division 3 have higher ROI than Division 1. They should proceed with their investment opportunity.

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Maryann

1 months ago

I agree with Mollie. Division 1 and Division 3 have the highest ROI, so they should proceed.

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Mollie

1 months ago

I think Division 1 and Division 3 will proceed with their investment opportunity.

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