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CIMA Exam CIMAPRO19-P02-1 Topic 7 Question 87 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 87
Topic #: 7
[All CIMAPRO19-P02-1 Questions]

You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have

underestimated the discount rate.

Correcting the underestimation will have the following effect, relative to your original deductions:

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Suggested Answer: A

Contribute your Thoughts:

21 days ago
You mean, NPV will reduce and IRR will not change? Why?
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26 days ago
Yeah, it was tricky. I think it's option A.
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27 days ago
Did you see the question about correcting the underestimation of the discount rate?
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