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CIMAPRO19-P02-1 Exam - Topic 6 Question 124 Discussion

Company TTM has the opportunity to invest $60,000 in a project. The project is anticipated to produce annual returns of $12,500 each year for 8 years. The cost of capital is 12%.What is the net present value of the project? Give your answer to the nearest whole number.
A) $2100

CIMAPRO19-P02-1 Exam - Topic 6 Question 124 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 124
Topic #: 6
[All CIMAPRO19-P02-1 Questions]

Company TTM has the opportunity to invest $60,000 in a project. The project is anticipated to produce annual returns of $12,500 each year for 8 years. The cost of capital is 12%.

What is the net present value of the project? Give your answer to the nearest whole number.

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Suggested Answer: A

by Cecil at Apr 08, 2026, 05:22 AM

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Frederick
7 hours ago
NPV calculation shows it's around $2,100.
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Celestina
5 days ago
Just did the math, and it checks out!
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Raul
11 days ago
Totally agree, looks like a good investment!
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Keva
16 days ago
Wait, how can it be positive with a 12% cost of capital?
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Leana
2 months ago
I think it's around $2100, right?
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Gail
2 months ago
NPV calculation is key here!
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Ula
3 months ago
I’m a bit confused about the cost of capital. Does that mean we just use 12% for the discount rate? I feel like I’ve seen this in practice questions before.
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Corazon
3 months ago
If I recall, we should subtract the initial investment from the total present value of the cash flows. I hope I remember the discounting part right!
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Tanesha
3 months ago
I remember doing a similar question where we had to discount cash flows. I think we use the formula for NPV, but I might mix up the steps.
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Ryan
3 months ago
I think we need to calculate the present value of the cash flows first, but I'm not entirely sure how to apply the formula correctly.
upvoted 0 times
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