CIMA Exam CIMAPRO19-P02-1 Topic 8 Question 91 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 91
Topic #: 8

A company is investing $200,000 in a project which will generate a cash flow of $60,000 each year for five years starting immediately. The company's cost of capital is 7%.

The net present value of the investment to the nearest $100 is $

A63200

Show Suggested Answer

Suggested Answer: A, C, D

by Leatha at Jun 29, 2024, 07:19 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Anika

16 days ago

I wonder if the company is investing in a time machine to get those cash flows. That would be a real money-maker!

upvoted 0 times

...

Delsie

1 months ago

Wait, did they say 'to the nearest $100'? Guess I better double-check my work.

upvoted 0 times

Glenna

22 days ago

I got $63,200 as the net present value.

upvoted 0 times

...

Antonio

1 months ago

Alright, let's do this! I can already taste that sweet, sweet certification.

upvoted 0 times

...

Cherelle

1 months ago

Hmm, 7% cost of capital? That's a bit higher than I was expecting. I wonder if that's going to impact the final result.

upvoted 0 times

...

Brendan

2 months ago

This seems like a straightforward time value of money problem. I'll plug the numbers into the NPV formula and see what I get.

upvoted 0 times

Raelene

19 days ago

I got an NPV of $63,200. Looks like option A is the correct answer.

upvoted 0 times

...

Alline

21 days ago

Let's calculate the NPV using the formula.

upvoted 0 times

...

Leslee

2 months ago

I'm not sure about the answer. Can someone explain how the net present value is calculated in this case?

upvoted 0 times

...

Lavonna

2 months ago

I agree with Bok. The net present value calculation is based on the discounted cash flows using the cost of capital.

upvoted 0 times

...

Bok

2 months ago

I think the answer is A) 63200.

upvoted 0 times

...