CIMA Exam CIMAPRO19-P02-1 Topic 7 Question 13 Discussion

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

Question #: 13
Topic #: 7

The net present value of the cost of operating a machine for the next 4 years is 6,340. The discount rate used is 10%.

What is the equivalent annual cost and the present value of the cost in perpetuity of operating this machine?

Use discount factors to 3 decimal places.

AEquivalent annual cost = 92,825
Present value of cost in perpetuity = 9,283

BEquivalent annual cost = 9,283
Present value of cost in perpetuity = 92,825

CEquivalent annual cost = 2,000
Present value of cost in perpetuity = 20,000

DEquivalent annual cost = 20,000
Present value of cost in perpetuity = 2,000

Show Suggested Answer

Suggested Answer: C

by Ruthann at May 05, 2022, 05:50 PM

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