CIMA Exam CIMAPRO19-P02-1 Topic 7 Question 53 Discussion

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

Question #: 53
Topic #: 7

You have just assessed an investment proposal, involving an immediate cash outflow followed by a series of cash inflows over the next 7years, by deducing the NPV and the IRR. You have now discovered that you have

underestimated the discount rate.

Correcting the underestimation will have the following effect, relative to your original deductions:

ANPV will reduce, IRR will not change

BNPV and IRR will not change

CNPV will increase, IRR will reduce

DNPV and IRR will both increase

ENot enough information given for an answer

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Suggested Answer: A

by Taryn at Jun 18, 2022, 09:40 AM

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