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CIMAPRO19-P02-1 Exam - Topic 7 Question 94 Discussion

The following forecast data relate to the first three years of a five year project.The project will require an initial investment of $30,000 in non-current assets.All revenue will be received in the year it is earned and all operating costs will be paid in the year they are incurred. Tax will be paid in the following year.Tax depreciation will be 25% per annum of the reducing balance.The taxation rate will be 30% of taxable profits.What is the forecast after tax cash flow for year 3 (to the nearest $10)?
C) $46,000
A) $45,890
B) $39,750
D) $38,500

CIMAPRO19-P02-1 Exam - Topic 7 Question 94 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 94
Topic #: 7
[All CIMAPRO19-P02-1 Questions]

The following forecast data relate to the first three years of a five year project.

The project will require an initial investment of $30,000 in non-current assets.

All revenue will be received in the year it is earned and all operating costs will be paid in the year they are incurred. Tax will be paid in the following year.

Tax depreciation will be 25% per annum of the reducing balance.

The taxation rate will be 30% of taxable profits.

What is the forecast after tax cash flow for year 3 (to the nearest $10)?

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Suggested Answer: C

by Lovetta at Aug 08, 2024, 03:22 AM

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Tamala
8 months ago
Definitely not option D, that seems too low!
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Terrilyn
8 months ago
Wait, how do we know the revenue for year 3?
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Carman
8 months ago
I'm leaning towards option A, seems right!
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Harris
8 months ago
I think the tax rate is 30%.
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Lauran
9 months ago
The initial investment is $30,000.
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Janna
9 months ago
I’m struggling to remember how to apply the tax rate correctly. I think we need to calculate taxable profits first, but I’m not sure if I got that right.
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Pamella
9 months ago
I feel like I’ve seen options like these before. I think the cash flow for year 3 should be around $46,000, but I’m not completely confident.
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Felicitas
9 months ago
This reminds me of a similar question we did in class where we had to account for tax depreciation. I think it’s 25% of the reducing balance, but I’m a bit confused about the timing of tax payments.
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Keneth
9 months ago
I remember we practiced calculating after-tax cash flows, but I’m not sure about the depreciation method for this question.
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Brendan
9 months ago
I'm a bit confused by the format of the data provided. Is the information in the table supposed to be used directly, or do I need to do some additional calculations? Better re-read the question carefully.
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Pamella
9 months ago
This seems like a classic discounted cash flow analysis problem. If I can nail down the key inputs and assumptions, I should be able to get the right answer.
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Dalene
9 months ago
Okay, I think I've got a plan - I'll start by calculating the revenue, operating costs, and tax depreciation for each year, then use those to determine the taxable profit and tax payable, and finally arrive at the after-tax cash flow for year 3.
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Dolores
9 months ago
Hmm, not sure I fully understand how the tax depreciation and taxation rate work in this case. Might need to review those concepts before attempting to solve this.
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Lonna
10 months ago
This question looks pretty straightforward, just need to calculate the after-tax cash flow for year 3 based on the given information.
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Nichelle
10 months ago
Okay, I think I've got this. Consensus methods are the most efficient way to record transactions in a database, because they get agreement from the whole network. That makes a lot of sense to me now.
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Sue
1 year ago
I heard the answer is actually a secret code to unlock the hidden treasure of the ancient accountants. Who needs after-tax cash flow when you've got gold, baby!
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Mollie
1 year ago
C) $46,000
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Stevie
1 year ago
I think the answer is A) $45,890. Let's unlock that hidden treasure!
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Jamal
1 year ago
A) $45,890
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Virgilio
1 year ago
This question is a real brain-teaser! I wish the exam would ask about something more exciting, like time travel or flying unicorns.
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Wai
1 year ago
I'm leaning towards D) $38,500.
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Maurine
1 year ago
I believe it's C) $46,000.
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Katie
1 year ago
I think the answer is B) $39,750.
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Yvette
1 year ago
D) $38,500 seems a bit too low, considering the initial investment and the tax depreciation. I'm leaning towards C) $46,000.
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Silva
1 year ago
I'm not sure about this one. I'll need to double-check the calculations to make sure I'm not missing anything.
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Sarah
1 year ago
Veda: That sounds about right. Let's verify the calculations to be sure.
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Susy
1 year ago
User 3: It should be around $45,890, according to the options provided.
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Veda
1 year ago
User 2: I'm not sure about this one. I'll need to double-check the calculations to make sure I'm not missing anything.
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Hillary
1 year ago
User 1: Have you checked the forecast after tax cash flow for year 3?
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Myra
1 year ago
User 3: It should be around $45,890.
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Fidelia
1 year ago
User 2: I'm not sure, I need to double-check the calculations.
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Serina
1 year ago
User 1: Have you checked the forecast after tax cash flow for year 3?
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Leanora
1 year ago
I think the correct answer is C) $46,000. The forecast data and the given information seem to align with this option.
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Fallon
1 year ago
User 2
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Hailey
1 year ago
User 1
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Candida
1 year ago
I believe the correct answer is $46,000 because of the tax depreciation and taxation rate.
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Tyisha
1 year ago
I disagree, I calculated it to be $39,750.
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Candida
1 year ago
I think the forecast after tax cash flow for year 3 is $45,890.
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