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AAFM Exam CWM_LEVEL_2 Topic 5 Question 75 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 75
Topic #: 5

[All CWM_LEVEL_2 Questions]

Section C (4 Mark)

Read the senario and answer to the question.

Saxena is considering an attractive investment proposal in which he is being offered two different cash flow choices at the same initial investment of Rs. 2,00,000. According to you which one should he opt for assuming Risk Free Interest Rate is the required rate of return?

APlan A should be opted since it has a higher Future Value.

BPlan B should be opted since it has a lower Present Value.

CPlan B should be opted since it has a higher Present Value.

DPlan B should be opted since it has a lower Future Value.

Show Suggested Answer

Suggested Answer: C

by Clorinda at Apr 20, 2024, 12:54 AM

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Maia

8 months ago

I think Plan B is the safer option because it has a lower Present Value.

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Lyndia

8 months ago

But isn't the Future Value more important in this case?

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Gail

8 months ago

I disagree, Plan B should be opted since it has a higher Present Value.

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Marva

9 months ago

I agree with Plan A seems like the better choice.

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Lyndia

10 months ago

I think Saxena should opt for Plan A because it has a higher Future Value.

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Renato

10 months ago

Because Plan B has a higher Present Value.

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Rolland

10 months ago

Why do you think so?

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Renato

10 months ago

I think Saxena should opt for Plan B.

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