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IMANET Exam CMA Topic 2 Question 89 Discussion

Actual exam question for IMANET's CMA exam
Question #: 89
Topic #: 2
[All CMA Questions]

Which of the following is not a category of relevant cash flows'?

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Suggested Answer: C

Relevant cash flows are a much more reliable guide when judging capital projects, since only they provide a true measure of a project's potential to affect shareholder value. The relevant cash flows can be divided into three categories. (1) net initial investment, (2) annual net cash flows, and (3) project termination cash flows. An incremental cash flow is the difference in cash received or disbursed resulting from selecting one option instead of another. It is not a category of relevant cash Bows.


by Stephaine at Jun 03, 2024, 02:20 AM

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Dalene
1 years ago
Wait, are we sure this isn't a 'which one doesn't belong' type of question? I'm feeling a little suspicious here.
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Jesusita
12 months ago
I agree, that seems like the odd one out.
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Crista
12 months ago
I think it's B) Project termination cash flows.
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Floyd
12 months ago
D) Net initial investment.
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Tresa
12 months ago
C) Incremental cash flows.
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Dottie
12 months ago
B) Project termination cash flows.
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Mi
12 months ago
A) Annual net cash flows
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Loren
1 years ago
Net initial investment? Seriously? That's clearly a relevant cash flow category. What is this, a trick question?
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Ressie
1 years ago
Yes, it is. The question must be trying to trick us.
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Novella
1 years ago
Net initial investment is actually a relevant cash flow category.
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Virgie
1 years ago
D) Net initial investment.
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Glendora
1 years ago
C) Incremental cash flows.
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Starr
1 years ago
B) Project termination cash flows.
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Queen
1 years ago
A) Annual net cash flows
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Lai
1 years ago
Incremental cash flows? That's the way to go. It's the only logical choice here.
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Leslie
1 years ago
C) Incremental cash flows.
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Lindsey
1 years ago
B) Project termination cash flows.
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Loise
1 years ago
A) Annual net cash flows
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Ludivina
1 years ago
I'm going with Project termination cash flows. Those are definitely relevant, right?
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Cherry
1 years ago
D) Net initial investment is another category of relevant cash flows to consider.
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Glory
1 years ago
C) Incremental cash flows are also considered relevant in cash flow analysis.
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Carmela
1 years ago
A) Annual net cash flows are definitely a category of relevant cash flows.
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Brendan
1 years ago
I agree with Hyman. Project termination cash flows are not relevant cash flows for decision making.
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Hyman
1 years ago
I think the answer is B) Project termination cash flows.
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Nana
1 years ago
Annual net cash flows? That's a no-brainer. It's definitely a relevant cash flow category.
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Marti
1 years ago
D) Net initial investment
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Ernestine
1 years ago
C) Incremental cash flows
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Beckie
1 years ago
A) Annual net cash flows
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Selene
1 years ago
C) Incremental cash flows
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Devon
1 years ago
A) Annual net cash flows
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Jaime
1 years ago
Annual net cash flows? That's a no-brainer. It's definitely a relevant cash flow category.
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Valentin
1 years ago
D) Net initial investment.
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Marjory
1 years ago
C) Incremental cash flows.
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Maurine
1 years ago
B) Project termination cash flows.
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Lou
1 years ago
A) Annual net cash flows
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