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