Discuss CIMA CIMAPRO19-P03-1 Exam Topic 5 Question 3

CIMAPRO19-P03-1 Exam - Topic 5 Question 3 Discussion

Posted by Jess on May 09, 2022 at 05:45 AM

A UK based company is considering an investment of GB1,000,000 in a project in the US

AIt is anticipated that the following cash flows will arise from this project.
The cash flows will be either US$400,000 with a probability of 40% or US$700,000 with a probability of 60% for each of the next three years; remitted to the UK at the end of each year.
Currendy GB1.00 is worth US$1.30.
The expected inflation rates in the two countries over the next four years are 2% in the UK and 4% in the US.
Applying the Purchasing Power Parity Theory, which of the following represents the expected net present value of the project in GP (to the nearest whole pound)?

AGB287.639

BGB391,640

CGB(111,973)

DGB554,047

Suggested Answer: A, A

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8 comments · newest first

Aleisha 12 months ago

I’m leaning towards option D, it feels more realistic!

Patrick 1 year ago

GBP287,639 seems way too low for this investment.

Salley 1 year ago

Wait, how can we be sure about those probabilities?

Kimberlie 1 year ago

I think option B looks promising!

Jaleesa 1 year ago

The cash flows are US$400k and US$700k, right?

Socorro 1 year ago

This looks like a pretty straightforward load balancing question. I think the key is to find the two actions that would set up the 4:1 ratio between the links.

Jospeh 1 year ago

This question seems straightforward. I think the answer is B - Situations having more than one valuation dates. The question mentions the "alternative valuation date" as an example, which implies there are multiple dates to consider.

Isabella 1 year ago

Alright, I think I've got it. The routing table shows that the network prefix 10.0.2.0/24 is associated with the Ethernet 0/0/2 interface. Since the destination IP 10.0.2.2 falls within that network prefix, the packet should be sent from the Ethernet 0/0/2 interface.

Thread summary

● Consensus

Community pick: Yes strong agreement

Vote breakdown

A 98%

B 2%

C 1%

D 3%

Summary updated from 8 comments · last activity 12 months ago

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