CIMA Exam CIMAPRO19-P02-1 Topic 1 Question 72 Discussion

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

Question #: 72
Topic #: 1

[All CIMAPRO19-P02-1 Questions]

An investment centre is appraising a potential project that is expected to yield a Return on Investment (ROI) of 12%.

Without the project the investment centre expects to earn an ROI of 14%. The cost of capital is 10%.

What would be the impact on the investment centre's performance measures if the project is accepted?

AResidual Income would decrease and ROI would increase.

BResidual Income would decrease and ROI would decrease.

CResidual Income would increase and ROI would increase.

DResidual Income would increase and ROI would decrease.

Show Suggested Answer

Suggested Answer: D

by Eden at Jul 31, 2023, 01:32 AM

Limited Time Offer

25%

Off

Contribute your Thoughts:

Submit Cancel

7 hours ago

But wouldn't the ROI increase in that case?

upvoted 0 times

...

3 days ago

I think if the project is accepted, the Residual Income would decrease.

upvoted 0 times

...