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CIMA Exam CIMAPRO19-P02-1 Topic 9 Question 114 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 114
Topic #: 9
[All CIMAPRO19-P02-1 Questions]

In an inflationary environment which is the correct way of calculating net present value (NPV)?

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Suggested Answer: A

by Vi at Jul 14, 2025, 08:18 PM

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Leeann
8 days ago
Honestly, this question is giving me a headache. Can we just go with the answer that has the most jargon? That's usually the right one, right?
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Johna
9 days ago
Option B makes the most sense to me. Inflation can have a significant impact on cash flows, so we need to account for that in the calculation. Plus, using a real discount rate will give us a more accurate NPV.
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Lillian
20 days ago
I see your point, but I still think B is the best approach.
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Joana
20 days ago
Hmm, I'm not sure about that. Wouldn't it be easier to just use the nominal cash flows and a nominal discount rate? That way, we don't have to worry about forecasting inflation.
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Jacob
21 days ago
I think D makes more sense, excluding the effect of inflation.
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Lezlie
25 days ago
I think option B is the correct way to calculate NPV in an inflationary environment. Forecasting the cash flows with the effect of inflation and using a real discount rate seems like the most logical approach.
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Barney
1 months ago
But doesn't using real cash flows and a nominal discount rate account for inflation?
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Lillian
1 months ago
I disagree, I believe it's C.
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Barney
1 months ago
I think the correct way is B.
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