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CIMAPRO19-P02-1 Exam - Topic 4 Question 92 Discussion

The following calculation of the net present value (NPV) of a project has been produced.By how much can the forecast revenue decrease before the project is not viable?
A) 7.2%
B) 35.6%
C) $20,000 per year
D) $21,380 in total

CIMAPRO19-P02-1 Exam - Topic 4 Question 92 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 92
Topic #: 4
[All CIMAPRO19-P02-1 Questions]

The following calculation of the net present value (NPV) of a project has been produced.

By how much can the forecast revenue decrease before the project is not viable?

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Suggested Answer: A

by Lorean at Jul 08, 2024, 07:32 AM

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Colette
9 months ago
Definitely not $20,000, that's way off!
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Fredric
10 months ago
How can we be sure about these numbers?
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Gwen
10 months ago
$21,380 seems too specific, doesn't it?
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Christiane
10 months ago
I think it's actually option A.
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King
10 months ago
Looks like option B is the right choice!
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Maryann
10 months ago
I think option B, 35.6%, sounds familiar from our case studies on project viability thresholds. It might be the right choice, but I need to double-check my notes.
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Svetlana
11 months ago
I feel like I should know this, but I can't recall the exact method for calculating how much revenue can drop before the NPV turns negative.
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Lorean
11 months ago
This question seems similar to one we practiced where we had to determine the break-even point for a project. I think it might be related to the percentage decrease in revenue.
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Corinne
11 months ago
I remember we discussed how to calculate the sensitivity of NPV to changes in revenue, but I'm not entirely sure how to apply that here.
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Deeanna
11 months ago
Whoa, this is a tricky one. I'm a bit lost on where to start. Maybe I'll try sketching out the cash flows first before jumping into the NPV formula.
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Kristian
11 months ago
Okay, I think I got this. If I can figure out the revenue threshold where the NPV hits zero, that should give me the answer. Time to crunch some numbers!
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Maddie
11 months ago
Hmm, not sure I fully understand this NPV stuff. Guess I'll have to read through the material again and try to break down the calculation step-by-step.
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Stanford
11 months ago
This looks like a straightforward NPV calculation problem. I'll need to review the formula and inputs to determine how much the revenue can decrease.
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Ernestine
11 months ago
This seems straightforward. Physical tampering prevention is a way to secure the physical aspects of banking controls, like preventing unauthorized access or damage. I'm going with True on this one.
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Erick
11 months ago
Okay, I've got this. Danner Bank is loaning money to CareWell, so they have a direct financial interest. And since Danner Bank is the lender, they would be considered an internal user, not an external one. The answer has to be A.
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Shawna
11 months ago
Wait, I'm a bit confused. Isn't 802.1ag about continuity check and connectivity monitoring? I'm not sure how end-to-end bit error rates would fit into that.
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Justine
1 year ago
I'm pretty sure the answer is B, but I'm also pretty sure my calculator is held together with duct tape and dreams. Fingers crossed!
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Stacey
1 year ago
B) 35.6% is the way to go. I mean, who doesn't love a good 35.6% revenue decrease? It's the spice of life!
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Cherry
1 year ago
D) $21,380 in total
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Zena
1 year ago
C) $20,000 per year
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Coletta
1 year ago
B) 35.6%
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Sheridan
1 year ago
A) 7.2%
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Mayra
1 year ago
Hmm, I'm torn between B and D. Guess I'll go with B, since a 35.6% decrease seems more realistic than a fixed dollar amount.
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Dorsey
1 year ago
Bobbye: Okay, I'll go with B) 35.6% as well.
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Carry
1 year ago
User 3: I agree with Carry, a percentage decrease seems more realistic.
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Bobbye
1 year ago
User 2: I'm not sure, I'm leaning towards B) 35.6% decrease.
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Candida
1 year ago
User 1: I think the answer is D) $21,380 in total.
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Marylou
1 year ago
I'm pretty sure the answer is B. It makes sense that the revenue can decrease by a significant amount before the project becomes unviable.
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Skye
1 year ago
But if the revenue decreases by $20,000 per year, the project may not be viable.
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Ozell
1 year ago
I disagree, I believe it can decrease by 7.2%.
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Sommer
1 year ago
The correct answer is B) 35.6%. This represents the maximum decrease in forecast revenue before the project becomes not viable, based on the given NPV calculation.
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Dominga
1 year ago
That's correct. The NPV calculation shows that a decrease of 35.6% in forecast revenue is the limit before the project becomes not viable.
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Kris
1 year ago
I think the forecast revenue can decrease by 35.6% before the project is not viable.
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Skye
1 year ago
I think the forecast revenue can decrease by $20,000 per year.
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