CIMA Exam CIMAPRO19-P01-1 Topic 3 Question 74 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 74
Topic #: 3

[All CIMAPRO19-P01-1 Questions]

A decision tree is being evaluated back to a decision point.

There are two alternatives at this point:

1. To abandon the project and generate a return of $435,000;

2. To continue with the project and generate the following possible returns:

What value should be included at the decision point?

A$435,000

B$451,000

C$443,000

D$720,000

Show Suggested Answer

Suggested Answer: A, D, E

References:

by Candida at Aug 28, 2023, 07:38 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Tiffiny

15 hours ago

Ah, the old decision tree dilemma. I'm feeling lucky, so I'm going with B. $451,000. After all, what's a few thousand dollars between friends? Let's roll the dice and see what happens!

upvoted 0 times

...

Dusti

6 days ago

I'm going with C. $443,000. It's the average of the two possible returns from continuing the project, and that seems like a safe bet to me. No need to get too fancy here.

upvoted 0 times

...

Carmen

8 days ago

Hmm, this one's tricky. I'm leaning towards D. $720,000, since that's the highest possible return if we continue the project. Who doesn't love a big payout, right?

upvoted 0 times

...

Michael

13 days ago

That's true, but the potential return of $720,000 is tempting. We should take the risk.

upvoted 0 times

...

I think the answer is B. $451,000. The expected value of continuing the project is calculated as (0.4 * $700,000) + (0.6 * $250,000) = $451,000. This is higher than the $435,000 return from abandoning the project.

upvoted 0 times

...

Vicky

18 days ago

But what if the returns are not as high as expected? Maybe it's safer to abandon the project.

upvoted 0 times

...

Michael

20 days ago

I think we should continue with the project for a chance to earn more.

upvoted 0 times

...

CIMA Exam CIMAPRO19-P01-1 Topic 3 Question 74 Discussion

Contribute your Thoughts:

Tiffiny

Dusti

Carmen

Michael

Annmarie

Vicky

Michael