CIMAPRO19-P02-1 Exam - Topic 9 Question 19 Discussion

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

Question #: 19
Topic #: 9

An organization is considering purchasing a new machine which will cost $600,000. The new machine will generate cost savings of $200,000 each year for five years. The cost of capital is 12%.

The profitability index (PI) for the investment in the new machine is:

Give your answer to one decimal place.

A1.2, 0.2

Show Suggested Answer

Suggested Answer: A

by Teddy at May 06, 2022, 04:34 PM

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Regenia

4 months ago

I'm not sure about those numbers, seems too good to be true.

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Daniela

4 months ago

PI calculation shows it's 1.2, right?

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Latricia

4 months ago

Wait, how does the cost of capital affect this?

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Nieves

4 months ago

Totally agree, that's a solid return!

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Tegan

5 months ago

The cost savings are $200,000 per year.

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Beula

5 months ago

Running the tests right after a build makes a lot of sense to me. It's the best way to get fast feedback on the code changes and ensure they haven't introduced any regressions.

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Ruthann

5 months ago

Okay, let's see. I'm pretty sure the scripts are in the domain's bin directory, but I'm not sure which subdirectory specifically.

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I've got a good handle on MoV, so I think I can tackle this question. The key is understanding that MoV should be used to clarify information and guide decision-making, not just measure value at the end. I'm confident option C is the correct answer.

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CIMAPRO19-P02-1 Exam - Topic 9 Question 19 Discussion

Contribute your Thoughts:

Regenia

Daniela

Latricia

Nieves

Tegan

Beula

Ruthann

Yuonne