CIMA Exam CIMAPRO19-P02-1 Topic 8 Question 58 Discussion

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

Question #: 58
Topic #: 8

A company is deciding whether to invest in project A or project B. A decision tree has been prepared to illustrate the investment decision and its associated possible net present values (NPVs).

Which of the following statements is correct?

AA risk neutral decision maker would select project B because it shows less variation of outcomes.

BProject A is more likely to reduce shareholder wealth than to increase it.

CProject A will generate a positive net present value of $1.3m.

Ddecision maker who is risk seeking would select project A.

Show Suggested Answer

Suggested Answer: D

by Quentin at Sep 22, 2022, 02:31 AM

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