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IMANET Exam CMA Topic 6 Question 105 Discussion

Actual exam question for IMANET's CMA exam
Question #: 105
Topic #: 6
[All CMA Questions]

A project requires an initial cash investment at its inception of $10,000, and no other cash outflows are necessary. Cash inflows from the project over its 3-year life are $6,000 at the end of the first year, $5,000 at the end of the second year, and $2,000 at the end of the third year. The future value interest factors for an amount of $1 at the firm's desired rate of return of 8% are

The present value interest factors for an amount of $1 for three periods are as follows:

The modified IRR (MIRR)for the project is closest to

Show Suggested Answer Hide Answer
Suggested Answer: D

Once an old piece of equipment has been disposed of, its histoncal cost no longer has an impact on a firms cash flows.


Contribute your Thoughts:

Mariann
15 days ago
I'm feeling confident about this one. It's like a math puzzle, and I love solving those!
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Nicolette
22 days ago
Wait, what's the MIRR again? I should probably brush up on my financial formulas before the exam.
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Therese
26 days ago
This question is perfect for the exam. It's challenging, but the information provided is clear and concise.
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Tawny
1 months ago
Hmm, the MIRR calculation seems tricky. I'd better double-check my work to make sure I get the right answer.
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Larae
3 days ago
So, which answer option do you think is closest to the MIRR for this project?
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Janae
13 days ago
Yes, that's correct. The MIRR takes into account the cost of capital and reinvestment rate. It provides a more accurate picture of the project's profitability.
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Cecil
16 days ago
That's correct. It's a more accurate measure of profitability compared to IRR.
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Alesia
22 days ago
I think the MIRR formula takes into account both the cost of the project and the reinvestment rate.
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Francis
27 days ago
I think the MIRR calculation involves adjusting for the cost of financing. It's not just a simple IRR calculation.
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Alesia
1 months ago
Okay, let's see... The given information includes the initial cash investment, cash inflows over the project's 3-year life, and the future value interest factors. I think I can work this out.
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Valentin
2 months ago
That's a good point, the timing of cash inflows does affect the MIRR calculation.
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Marnie
2 months ago
I disagree, I believe it's closer to 9% because of the cash inflows in the later years.
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Valentin
2 months ago
I think the MIRR for the project is closest to 10%.
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