CIMA Exam CIMAPRO19-P02-1 Topic 1 Question 28 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 28
Topic #: 1

A project is viable because it has a positive net present value (NPV).

Details of four of the input variables, together with the sensitivity of the viability of the project to a change in each one in isolation, are given below.

Which of the following statements is correct?

AA 1% change in the initial investment will result in a change of 3% in the NPV.

BThe resale value at the end of the project is the most sensitive of the four variables.

CIf the incremental annual cash contributions reduce by more than 8% then the project will no longer be viable.

DIf the rate of taxation on profits increases to 40% then the project will no longer be viable.

Show Suggested Answer

Suggested Answer: C

by Delmy at May 09, 2022, 02:49 AM

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