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CIMAPRO19-P02-1 Exam - Topic 4 Question 112 Discussion

The discount rate at which the net present value (NPV) is zero is known as the
C) internal rate of return
A) accounting rate of return
B) risk adjusted discount rate
D) breakeven point

CIMAPRO19-P02-1 Exam - Topic 4 Question 112 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 112
Topic #: 4
[All CIMAPRO19-P02-1 Questions]

The discount rate at which the net present value (NPV) is zero is known as the

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Suggested Answer: C

by Marica at Jun 14, 2025, 06:13 PM

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Dahlia
9 months ago
I can see why people might confuse it with B, but it's C for sure.
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Nikita
9 months ago
Wait, is it really C? I thought it was something else.
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Lonny
9 months ago
Totally agree, C is the right answer!
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Samira
9 months ago
Nope, definitely not A or D!
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Jaime
10 months ago
It's called the internal rate of return (C).
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Eliseo
10 months ago
I thought the breakeven point was related to costs, not NPV. So I’m leaning towards C as well.
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Sommer
10 months ago
I'm torn between C and B. I feel like I've seen both terms used in different contexts.
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Yong
10 months ago
I remember practicing a similar question, and I think the internal rate of return is definitely the term we're looking for here.
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Cassi
10 months ago
I think the answer might be C, internal rate of return, but I'm not completely sure.
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Sylvia
11 months ago
I'm a bit confused on the difference between the internal rate of return and the risk-adjusted discount rate. I'll have to review my notes on capital budgeting to make sure I understand this properly before answering.
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Alonso
11 months ago
Okay, let me think this through step-by-step. The NPV formula includes the discount rate, and when NPV is zero, that means the discount rate is the one that makes the NPV equal to zero. I believe that's the definition of the internal rate of return, so I'll select C.
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Hannah
11 months ago
Hmm, I'm a bit unsure on this one. I know the internal rate of return is related to NPV, but I can't quite remember the exact definition. I'll have to think this through carefully.
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Alyce
11 months ago
This one looks straightforward - the discount rate where NPV is zero is the internal rate of return, so I'll go with option C.
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Ashanti
1 year ago
B) risk adjusted discount rate. Gotta love those finance terms, am I right? 'Risk adjusted'? Sounds like something straight out of a textbook. I bet the person who wrote this question is a real stickler for that kind of thing.
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Eladia
1 year ago
C) internal rate of return, all the way! It's the discount rate that makes the NPV zero, which is exactly what the question is asking for. Easy peasy!
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Lashanda
1 year ago
I'm going with C) internal rate of return. It's the only one that really makes sense in the context of NPV. Although, to be honest, I'm a little worried about the question - it feels like a trick question or something.
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Isabelle
1 year ago
I agree, the internal rate of return is crucial for determining the discount rate at which the project breaks even.
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Laurel
1 year ago
I think C) internal rate of return is the correct answer too. It's all about finding that zero NPV point.
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Darnell
1 year ago
D) breakeven point? Really? I mean, that's not even close to the right answer. What kind of joker would pick that?
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Roxane
1 year ago
B) risk adjusted discount rate
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Danica
1 year ago
C) internal rate of return
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Raelene
1 year ago
A) accounting rate of return
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Yaeko
1 year ago
I'm not sure, but I think it's D) breakeven point because that's when costs equal revenue.
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Leah
1 year ago
B) risk adjusted discount rate makes the most sense to me. Gotta account for that risk, you know?
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Lyla
1 year ago
Accounting rate of return is also important to consider in financial analysis.
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Melda
1 year ago
The breakeven point is crucial for determining profitability.
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Dorathy
1 year ago
I think the internal rate of return is also a key factor in determining the discount rate.
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Bev
1 year ago
I agree, the risk adjusted discount rate is important to consider.
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Meaghan
1 year ago
I agree with Lyda. The internal rate of return is the discount rate at which NPV is zero.
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Lyda
1 year ago
I think the answer is C) internal rate of return.
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Jacki
1 year ago
C) internal rate of return seems like the obvious choice here. That's the discount rate that makes the NPV zero, right?
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Lawanda
1 year ago
Definitely, C) internal rate of return is the correct answer. It's a key metric in investment analysis.
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Gary
1 year ago
I think it's C) internal rate of return too. It's the rate at which the project breaks even.
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Vicky
1 year ago
Yes, you're correct! The internal rate of return is the discount rate that makes the NPV zero.
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