YHJ is considering an investment in a project that will cost $20 million. Annual fixed costs will be $12 million per year, excluding depreciation. Annual sales are forecast at 5 million units, with a contribution per unit of $8. After five years the equipment will be worn out and YHJ will have to spend $50 million on disposal costs. The discount rate is 10%. Calculate the sensitivity of the net present value of this project to a 20% increase in the disposal costs.
Answer(s): A
B is a company with a strong risk appetite. Which of the following are benefits of using the certainty equivalent method of capital investment appraisal in B's case?
Answer(s): B,C
K has several subsidiary companies. The directors of K's subsidiaries are paid an annual bonus based upon their particular subsidiary's reported profits. The directors of one of K's subsidiaries are considering the choice between two models of a machine. Which of the following is most likely to explain the decision to choose model X over model Y?
Answer(s): C
There are many method for appraising capital projects.Select ALL correct statements.
Answer(s): A,C,D
Post your Comments and Discuss CIMA CIMAPRO19-P03-1 exam with other Community members:
Shehan Commented on February 07, 2025 Superb stuff Anonymous
Deans Commented on August 05, 2022 I passed my exam without stress using these after 3 fails using some so-called approved tuition providers.Allbraindumps is a real deal you definitely pass first time,i regret knowing them late. Anonymous
Deans Commented on July 25, 2022 Allbraindumps is the real deal providing good value for money,you have no stress on your next exam if you use their dumps!! Anonymous
Our website is free, but we have to fight against bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the CIMAPRO19-P03-1 content, but please register or login to continue.